Strange Bedfellows Unite for Infrastructure Investment, Financing Tools

From left: Chamber of Commerce President Tom Donohue, Mesa Mayor Scott Smith, Rep. John Mica, LA Mayor Antonio Villaraigosa, Sen. Barbara Boxer, AFL-CIO President Rich Trumka. Photo: Senate Photographic Studio

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.

  • Suzanne

    Are these trasportation projects something like BRT or high speed rail or are they more highways?

  • PaulCJr

    Come on, you know most of these people are going to push for more highway spending. Hopefully I’m wrong.

  • Harry_R

    Actually, if America Fast Forward is anything like the LA 30/10 initiative, the funding will greatly emphasize rail projects locally.

  • Harry_R

    I should also emphasize that the funding will be targeted towards whatever ballot initiative was passed by the local taxpayers. In LA’s case, voters approved Prop R, permitting a tax increase to fund a large number of transportation projects (majority rail). All America Fast Forward does is that it front-ends the distribution of the funding that would normally take 30 years to raise, thus allowing for projects to get built sooner.

  • In theory, this should be a perfect bipartisan idea. It lets locals make their own decisions and find their own funding. The Federal government’s only involvement is securing financing, and with treasure bonds trading at incredibly low interest rates, there is no problem selling more bonds at the moment. But I’m afraid this whole program will be falsely caught up in the current partisan craziness over the deficit, even though this would not add to the debt.

  • LAofAnaheim

    If Mayor V is able to pull this off….he deserves to have one of LA’s newest Metro rail stations to be named after him. Antonio has led the federal charge on this transformative policy. Any other LA mayor in history has done anything this precedented?

  • Jtuttle

    Transportation infrastructure is a fundamental element in our nation’s economy and American way of life. Young Americans are going to be particularly affected by decisions made today and their long term implications. The American High Speed Rail Alliance invites you to join our White House Young American Roundtable this April for a discussion on 21st Century transportation needs. For more information, please visit our facebook page at: http://on.fb.me/ibqVKk

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