With debate about President Obama's American Jobs Act occurring all over Washington this week, the Progressive Policy Institute held a forum on infrastructure and jobs on Thursday. Leaders from the White House, Congress, private industry, labor, and the financial sector discussed the National Infrastructure Bank, a $10 billion component of the president's proposal.
Rep. Rosa DeLauro of Connecticut, an advocate of a federal infrastructure bank since 1994, explained, "The United States is one of the only leading nations without a national plan for public-private partnership for infrastructure projects or a national infrastructure bank to finance large-scale projects." The proposed bank, modeled after the European Investment Bank, would be a federally operated bank overseen by a board of directors whose focus would be to fund strategically important public works projects. State, local, or federal entities seeking funding for infrastructure programs from roads and railways to telecommunications and energy could come to the bank with proposals in need of federal assistance.
The call for a National Infrastructure Bank in the United States is directly linked with the sluggish pace of job creation. According to the U.S. Department of Transportation, every $1 billion invested in infrastructure supports nearly 35,000 American jobs. With a languid economy and unemployment stuck at 9.1 percent, proponents of an infrastructure bank view investment in building projects as an immediately necessary step toward long-term financial stability.
Director of the National Economic Council Gene Sperling voiced his support for the National Infrastructure Bank, saying, "There is nothing fiscally disciplined about deferred maintenance." Sperling explained that investing in infrastructure is not a quick fix for America's economic woes but the start of a continuing strategy to create jobs while improving the country and enticing new businesses to invest in America.
The emphasis on the long-term benefits of the National Infrastructure Bank permeated the discussion on Thursday. Investment in public works would put a considerable number of people to work in the coming years, but, as Sen. Mark Warner of Virginia warned, "This is not a silver bullet." Rather, supporters of the proposal view it as one of an array of options for how America can improve its dire economic climate.
Support for the National Infrastructure Bank from Democratic members of Congress and senior White House officials is unsurprising, but the Progressive Policy Institute's forum also featured leaders of multinational businesses. Dan DiMicco, the chairman and CEO of Nucor, North America's largest steel manufacturing company, explained, "What's good for America is good for Nucor." DiMicco clarified by saying that his company is interested in changing the trend of sending domestically manufactured steel abroad for building projects. Ed Smith, CEO of Ullico Inc., a major provider of insurance and financial solutions for labor unions, described his company's idea of the "double bottom line" approach. The strategy involves looking for investments that produce both profits and jobs, a criteria that infrastructure investment fits well. Daryl Dulaney, president and CEO of Siemens, was open in his concern that doing business in the United States was getting too expensive. He explained that a Siemens operation that produces wind turbines in Fort Madison, Iowa, had to rebuild railways in the area to transport its product. "How many companies are going to do that?" he asked the panel.
Large businesses with overseas cash like the ones represented at the forum are possible targets for capitalization of the National Infrastructure Bank. While the idea is not explicitly spelled out in the president's bill, Warner noted that one of the ideas making the rounds in Washington is to allow big corporations to repatriate funds from overseas tax-free with the caveat that a set percentage of the cash must be used to fund the infrastructure bank.
While the panel seemed to be unanimous that a federally regulated infrastructure bank is a good idea, Washington Post columnist Steven Pearlstein raised the question of whether or not people should be optimistic about this component of the American Jobs Act when so much of the bill is currently undergoing bipartisan disagreement. Sperling encapsulated the tenor of the forum during his conversation with Pearlstein, saying, "What do you want us to do? Fold our cards, or go out and make the case?" That case seems to sit well with Democrats and business leaders interested in investing in large-scale American building projects, but the National Infrastructure Bank will be a much harder sell for those already wary of government influence in matters of money.