Strange Bedfellows Unite for Infrastructure Investment, Financing Tools
The “Tom and Rich Show” continued on Capitol Hill yesterday. Chamber of Commerce President Tom Donohue and AFL-CIO President Rich Trumka joined up for yet another event to show that business and labor, which don’t agree on anything, agree on a major infusion of federal investment for infrastructure.
They weren’t the only strange bedfellows there. Democratic Senator Barbara Boxer and Republican Congressman John Mica were practically holding hands through the entire press conference. Los Angeles Mayor Antonio Villaraigosa (a Democrat) found common cause with Mesa Mayor Scott Smith (a Republican).
“We have Democrats, Republicans, House, Senate, labor, business, lambs, lions, cats, dogs lying down together,” said Mayor Smith. “But there’s no apocalypse on the horizon. There’s a new dawn.”
In the past, even as other leaders in Boxer’s party have called for an infrastructure bank, she has hesitated to join them, expressing support for a strengthened and expanded TIFIA loan program instead. She’s said that rather than create a new federal bureaucracy, she’d rather stick with an existing program with a proven track record. But now she’s saying those approaches can each work in conjunction. “They’re definitely complementary,” she said yesterday. “I’m supporting the infrastructure bank, a strengthened TIFIA, and the Wyden approach [to renew the Build America Bonds program]. They’re all complementary. It’s all about leverage, leverage, leverage.”
Tom Donohue’s persistent, at times strident calls for strong federal infrastructure investment have been at odds with the calls from the fiscal conservatives the Chamber helped elect. While many in the House are bracing for a smaller reauthorization bill than hoped for – possibly even smaller than the last one, passed in 2005 – and calling for increased public-private partnerships to pick up the slack, Donohue knows that’s not going to cut it. He’s calling for a big bill, funded with a significant increase in the gas tax, which everyone in the transportation industry supports and everyone in Washington shuns.
Chamber spokesperson Janet Kavinoky explained why public-private partnerships can’t just replace adequate federal investment.
“You have to have revenue to do transportation projects,” she said. “So even if you’re doing public-private partnerships, even if you’re offering leveraging tools, you still have to have revenue to pay interest on debt and to pay returns on equity. That’s true if you take out a mortgage, it’s true if you have a credit card, it’s true if you do infrastructure. So we don’t want people to lose sight of the fact that public private partnerships, TIFIA, banks aren’t a magic solution for everything. We still gotta have the money.”
The unlikely allies came together yesterday to promote a new initiative they’re calling America Fast Forward, a new plan building on L.A.’s proposed 30/10 program to use targeted federal investments to leverage locally-raised money for transportation projects. They say it will create jobs, support business, and empower local communities without adding to the nation’s deficit.
As part of this, more than 100 mayors from around the country, including Smith and Villaraigosa, sent a letter last week to the chairs and ranking members of four of the main Congressional committees that will be crafting the transportation bill. The letter asks them to support an expanded TIFIA loan program to provide “credit assistance for surface transportation projects of national and regional significance” as well as Qualified Transportation Improvement Bonds, which the federal government subsidizes by paying most or all of the interest cost in the form of tax credits for investors.