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Okay then. Senator Dodd answered my curious questions about the reality of the Homeland Security Infrastructure Reinvestment Bank via Reuters UK:
WASHINGTON, Feb 9 (Reuters) – The United States Senate could pass a bill to found a national infrastructure bank in the next 12 months, said Democrat Chris Dodd, who chairs the Banking Committee, on Monday.
"President Obama co-sponsored our infrastructure bank legislation as a senator and endorsed the idea during his campaign. So, I’m hopeful to see action on the bill this year," Dodd said.
For more than a year bills to create a bank that would fund roads and capital works projects with a combination of seed money from the federal government and bond financing have sat in both houses of the U.S. Congress.
The idea has recently fallen to the shadows as Americans turn their attention to boosting infrastructure in the economic recovery bill the Senate will likely vote on Tuesday. But the Connecticut Senator said the bank, which would have an independent board to decide which projects receive backing, was still a viable idea.”
Even the investors are buzzing about it and starting to buy up related stocks. An investment consulting firm here in the US, CG/LA, had words of wisdom for the infrastructure investor.
“In the US, CG/LA foresees that the US will carry out about $190 billion in infrastructure spending. It also predicts that President-Elect Obama’s proposed infrastructure bank will be created. Anderson believes that it would have to be at least $300 million in size in order to make a meaningful impact on US infrastructure. This would be five times larger than the $60 million infrastructure bank plan unveiled by Senator Chris Dodd (D-CT) in August 2007.”
And finally, the Independent, in the UK , had their understanding on the President’s infrastructure plan way before US MSM has even tried to find out. On January 25, 2009:
“The President’s transition team has met at least one City figure close to the EIB to discuss how to set up a bank dedicated to rebuilding America’s creaking transportation infrastructure. It is estimated that the backlog of road repairs is close to $5 trillion.
A spokesman for the Federal Highway Administration said on Friday:"There are no plans currently in place, as the US Secretary of Transportation was only sworn in yesterday. [But] I can tell you that state infrastructure banks are being considered."
President Barack Obama’s administration is looking to establish a $60bn (£43.5bn) infrastructure bank based on the European Investment Bank (EIB), which is bailing out small UK businesses hit by the financial crisis.
The source added:
‘Obama’s new government is talking about a $50bn-to-60bn infrastructure bank. The EIB is going to lend more than that this year, so the US is now looking at how the bank operates.’
“
And, as I have been writing about all of this in diaries since Friday, February 6, 2009, Chris Dodd has been on the road talking the Infrastructure Bank up, this week.
On February 9-10,2009, Senator Dodd shared at a regional development conference for the Institute For Emerging Issues:
“A national infrastructure bank would ensure that important projects receive funding — creating a new funding stream and competitive process for wastewater systems or any other project that offers the greatest economic and environmental benefits that no community can afford to rebuild on its own," Dodd said in a speech at North Carolina State University.
Further reporting on the conference:
“Sen. Chris Dodd, D-Conn., at the N.C. State Emerging Issues Forum , made cogent arguments for not just aiming for "shovel-ready" projects but "future ready" projects. He also pointed out (as if you hadn’t heard) that the nation’s infrastructure got graded mostly a D by the American Society of Civil Engineers. Where’s the leadership for transformative projects, he asked, akin to the Erie Canal or the first transcontinental railroad, rural electrification or the interstate highway system?
He pitched a major rail initiative – connecting the nation’s major urban areas with high- or higher-speed rail – and let Detroit build the rail cars and buses the nation will need to refocus its transportation system to a more inclusive one – i.e., not just highways.
He pitched a National Infrastructure Bank, to create a new funding stream and competitive process. As it is, transportation in America is basically carried out by 50 states with 50 different plans.”
(My bold)
Finally, on January 7, 2009, Norman Anderson of the Journal Of Energy Efficiency And Reliability made 5 global infrastructure projections and guess what was #1…You guessed it. Obama creating an infrastructure bank.
“Here are my 5 infrastructure projections for 2009:
1. National Infrastructure Bank. In the US, the Obama government will create a National Infrastructure Bank, — this will be a sustained game changer for the US infrastructure industry, doubling market size to $300 billion and, more importantly, creating new markets, and new ways of thinking about mobility, inter-modality and productivity…”
I found Mr. Anderson’s note of interest due to the tag at the end of his predictions:
“Please send me your projections by January 16th and I will share these with the nearly 100,000 infrastructure professionals in CG/LA’s global data base on January 20th, 2009.”
Dodd’s Bill, S 1926, had some type of update on January 15th, 2009.
So follow the money to your favorite stocks because one investor wrote:
"The credit crunch has taken an enormous toll on spending. Without money floating between lenders and borrowers, many projects are put on the back burner. The new bank is expected to open up with $60 billion in its reserves and plans to spend aggressively. You can count on private borrowers lining up to start new projects with that cash.
The arrangement of this bank also depoliticizes infrastructure. Since most projects are necessary expenditures, politicians shouldn’t be involved. Unfortunately, infrastructure spending is political. Congressmen fight tooth and nail about which projects are funded until Congress adjourns and nothing is agreed upon. This new bank will fix that problem.The National Infrastructure Reinvestment Bank will be a separate entity from the government. It will be made up of a five-member Board of Directors, modeled after the Federal Deposit Insurance Corp. (FDIC). This Board will make decisions on where to spend the trust money… not politicians.
Obama co-sponsored the bill when it was first drafted, and because the wheels fell off it in committee, he plans to reintroduce it as part of his “first priority” energy plan. This new bank will help kick start the hundreds of thousands of projects that were delayed or scrapped because of funding…
This small cap has a minimum upside of 205%, but we expect somewhere between 261% and 711% gains.
(My bold)
Wow. How did the ad go? Oh Yeah…
"When money talks, people listen."
Guess it is about time we talk about the National Infrastructure Reinvestment Bank.
12 Comments
S 1926, Dodd’s bill from the 110th, has been showing up on state and large municipal legislative matrix lists for 2009 legislation under the federal legislative matrix heading. And appears to be at or near the top of these lists.
I assume it’s coming soon and is not quietly slipped into the stimulus package. However, an expansion of the federal pilot program, SIB, state infrastructure banks, I think is in the stimulus package and I will explain that in another diary soon.
It appears there will be a “layered” approach to infrastructure reinvestment and it is an approach which will cut pork effectively since decisions will be made on a coordinated priority by an independent national engineering board, as opposed to legislators filing there “pork”. What does not get selected on the federal level gets referred back to the state SIB. The NIB would only handle interstate infrastructure and varied intrastate infrastructure.
This is a new way to think about infrastructure spending/reinvestment and seems more organized and efficient in terms of coordinating interstate infrastructure versus intrastate infrastructure.
What on earth are our legislators going to do with all that free time on their hands not seeking election handouts from contractors in exchange for pork.
And this is a dream for us, the tax payer…not to mention the investor.
This is also an interesting document to read: Policy Recommendations for the 44th President and 111th Congress Executive Summary by the Federal Economic Development Agenda
S 1926 is mentioned on pages 11 and 12. It’s a great doc to read.
It seems to be cross-cutting and converging as a legislative theme since S 1926 keeps appearing in different Legislative alerts for the 111th and the 44th.
Here yet another.
For more background on S 1926, try this article.
The road to hell is paved with good intentions: Thanks for giving us the heads up on this whopper of a new “initiative”. Locally, we here are opposed to new natural gas drilling using hydraulic fracturing techniques which have proven to be quite polluting out West. Pickens will want to advance this along with a grid of natural gas pipelines and wells.
In addition, another Federal initiative wants to run a powerline through the Southern Tier of NY and we have been fighting that and working for alternative energy and trying to hold them off.
This new bank could end run around us by over-riding local opposition to new fossil fuel based infrastructure. Since it is Federally (blessed)based, how will we local people have input, to insure that transmission lines go in for solar and wind power, but not for cheap dirty coal power?
Corporate money needs to be constrained by principled and informed federal legislation as to what kinds of infrastructure gets funded. I am skeptical of anything that substitutes government bonds and legislation for privately held bonds and corporate boardrooms.
That is a great question. From my few readings of S.1926, it appears the stage at which public voices could be heard would be in the grant writing/development stage, not sumission/review stage. The bill could use some reinforced language that parties must submit grant intentions X months prior to filing grant requests and that there needs to be access to a data base for citizens to research what may be happening in there areas, prior to the grant submission. The bill has language regarding a searchable public data base for approved grants. So, adding the language I suggest seems like a possible option.
Thanks for your comment. This is exactly why I wanted dialogue about the legislation. It’s going to happen, I’m pretty sure of that. But we need to be able fine tune it to make it a “win-win” legislative piece.
in there areas..
that should be “their” areas.
Need more coffee.
I put out a red alert on this to the environmental working group here in NY. They understand these things (as you obviously do) better than I do. My skepticism comes from ‘following the money’ and the influence it brings. I would not even know about this except through your diary and others. Thanks for your efforts on this!
The issue of the omnipotence and secrecy of public-private Boards of Governors has been raised recently regarding the Federal Reserve, which I have also learned is an international institution and not beholden to the US. The idea that a new controlling economic force would be created by this new bank entity, which would place ownership of resources and projects in private hands, would be a major power shift in favor of corporate and capitalist interests.
There has been a pilot program federally funded on the state level, SIB, which has been fairly successful in terms of efforts to work with local concerns while trying to address the need for updated infrastructure. The good news is the model removes the pork and related power plays that more often leave the environmental groups without any voice.
This is a delicate walk. We need to update infrastructure. Our economy needs it in terms of more energy efficiency and less oil dependency, more jobs are created…we remain competitive and more self-sufficient-sustainable.
I think Obama is interested in making this process open and there is a great deal of language in terms of greening technologies in regards to his infrastructure plan. But now is the time to get in on the dialogue to see “how” things will work and to make sure there are project review mechanisms for the public.
There are working models out there now with little to complain. But it is important to research and be a part of the legislative process to see if a “win-win” can be built.
I am grateful to you for bringing this issue forward. I respectfully disagree with you about what the the result will be if state and federal projects are funded by, built by and owned by private corporate, captitalist business-oriented entities. The Spanish model cited by your article’s references, is one of creating an expensive middle-man to avoid creating and floating government bonds (read debt). Only government with its mandate to serve its citizens can invest in forward looking, non profit, long term and delayed ‘rewards’ programs. Corporate entities including banks are profit-making, short-term rewards focused in nature and are there to serve their shareholders and owners and not our citizens.
Political conflicts and corruption are never a good enough reason to abandon the representation of the people in their government for the self-serving autocracy of private enterprise.
Here’s the full text of S.1926.
This is what I am referring to, in addition to the powers given to a Board composed of a few members:
from the article you cited at PennySleuth:
“
Anderson also predicts that, due to the global financial crisis, the US will begin to transition toward a more Spanish-style infrastructure financing model. In Spain, large engineering and construction firms with significant balance sheets, such as ACS and Ferrovial, originate, build, operate and take equity stakes in national infrastructure projects. “
The answer to problems in governance is not less democracy or a transfer of resources to Private Corporations.
I read the bill you noted. Thank You! You trust them more than I do. The Bill as written does not speak of ownership of the finished product by private corporations. If private investors are wanting bonds that do not expire in 30 years we can fix that with a pen at the Treasury. I suspect that they really want control, competitive interest rates, and guaranteed returns.
It’s not a matter that I “trust them more”. I am trying to get this information out early so that we can weigh on this and try to influence the legislation to be better and more constituency-friendly. We need vehicles for infrastructure development but not at the sacrifice of representation of the people or return benefit to taxpayers.
I work in mediation. My nature is to see both sides and try to negotiate a solution that is “win-win”, positive sum diplomacy. I am not a zero sum or negative sum negotiator. My posts have been to initiate a process and a public awareness of policy.
Trust me, it was not lost on me that one of the legislative letters of support on this bill was from Goldman Sachs. All the more reason to be informed and active on this legislation.