Rep. John Delaney (D-Md) has introduced H.R. 2084: Partnership to Build America Act of 2013 to fund infrastructure improvements. The house version of this bill has wide bipartisan support, and the Senate version was just introduced by Michael Bennet of Colorado and Republican Roy Blunt of Missouri.
In lauding the bill, the Frederick News-Post actually called attention to my concerns.
“U.S. Rep. John Delaney deserves major credit for two things: for proposing financial legislation that has bipartisan support, and for crafting a bill that would help pay for a fast-deteriorating national transportation infrastructure without increasing the nation’s debt or raising taxes.”
The substance of the bill deals with the financial aspects of paying for the improvements, but offers a paucity of information as to what improvements are to be done. Rep Delaney is
soliciting opinions about what should be done, but they are all broad-brush suggestions that
everyone ought to agree with. I wanted to tell him that my infrastructure priority is a high voltage DC energy grid but he doesn't seem interested in specifics.
Slightly troubling is the nature of the financing. This bill would establish the American Infrastructure Fund, or AIF, which would
provide bond guarantees and make loans to States, local governments, and non-profit infrastructure providers for investments in certain infrastructure projects, and to provide equity investments in such projects, and for other purposes
The reason why Republicans are on board is because the bond offering provides private funding for the infrastructure projects. It seems that it's designed to front load the money that states and municipalities would have otherwise had pay over the next 50 years for these projects, and let them slowly pay that money back from their tax revenues. It's also assumed that inflation will outpace the 1% bond yield and save the borrowers money over that 50 year timespan.
It says the AIF will make loans to non-profit infrastructure projects, and for other purposes. That last bit of wiggle room smacks of privatization to me, especially given the fact that it creates an AIF board of directors who are then compensated.
Though it doesn't say so, the borrowers must not be getting those loans at zero percent, because the compensation to the board of directors must come from somewhere.
And so here we have the classic private vs. public dilemma. Instead of "burdening" existing government employees with the oversight of these projects (i.e. Departments of education, transportation, public works, etc.), it creates a new entity, with 11 new people to be compensated.
I can't say at this point whether H.R. 2084 and the AIF is a good idea or a bad idea, other than it revisits the well-trodden argument as to whether privatization can do things cheaper and more efficiently than the government can. But most troubling to me is the focus on the money first, with no plan for how it is to be spent. To me, that's a recipe for corruption. What I do know is that during his freshman term, Rep. Delaney has not been on the side of progressives, notably voting "yea" on H.R. 2374, The Retail Investor Protection Act. He is the 6th wealthiest member of congress, whose background is in taking two companies public. I'm reluctant to slam this bill out of the gate, but Rep. Delaney appears to be more of a friend to the banks than he is to us.