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New Infrastructure Funding Bills: The Serious, and the Laughable

May 22, 2017 (EIRNS)—While New York Metropolitan Area residents were watching their transportation infrastructure break down around them, and President Trump was being sold a bill of goods about "Saudi investments," Members of the House and Senate introduced two new bills dedicated to infrastructure investments.

The first of the two—if it has actually gotten from press release to introduction—is derisory. The Hill wrote that Senators Mark Warner (D-Va.) and Roy Blunt (R-Mo.) said

"The so-called Bridge Act would use $10 billion worth of federal dollars to spur about $300 billion worth of total project investment from the private sector ... through a newly created investment bank."

The Senators might want to call their new investment bank "Lehman Brothers"; it had about that leverage ratio of 30:1 borrowed capital for its last four years.

Actually the CNBC-TV network had warned for the second time May 13 that private investment should not be counted on for sewer, water management, power, and rail infrastructure.

"Experts warn that for a variety of reasons, most infrastructure projects lack the revenue stream and return on equity needed to attract [Wall Street or pension fund—ed.] private investors,"

CNBC reported, while noting the most important public-private partnerships in infrastructure had failed, gone bankrupt.

All of the more important such projects have the function of adding new productivity to the economy and labor, not sucking revenue streams from them.

A new House bill, H.R. 2329 by Rep. Brian Higgins (D-N.Y.), is serious, however. That may be why, in the current Washington atmosphere, Higgins has no co-sponsors for it—so far.

The "Nation Building Here at Home Act of 2017" would give Transportation Secretary Elaine Chow a maximum of nine months to "establish a transformational infrastructure competitive [matching] grant program" like the Highway Trust Fund, and authorize the Treasury to fund it with new Treasury security issues of $300 billion. The grants would go to state and local governments, transit and port agencies, which would provide some additional funding. "Projects" would be either highways and bridges, public transportation projects, long-haul passenger or freight rail, port infrastructure investments including "land-side" connections to other infrastructure; aviation infrastructure projects; or water infrastructure projects.

Nor is the immediate $300 billion Federal bond issuance all; Higgins’ bill actually authorizes $1.263 trillion from Fiscal Years 2018-22. HR 2329 mandates prevailing-wage standards on its Federally-funded infrastructure projects; and calls for the iron, steel and manufactured goods to be made in America. This is a page out of President Trump’s campaign book, although Higgins’ bill specifies reasonable exceptions to that rule.

President Trump had better exit the gold vaults of Riyadh—where the City of London Crown Prince is actually canceling infrastructure projects like power plants—and get back and deal with the infrastructure collapse of his home city.