Is There Hope for an Infrastructure Bank?

The White House’s release of its fiscal 2012 budget proposal this week kicks off the discussion about the administration’s priorities, and infrastructure is at the top of the list. The administration has been honing the idea of an infrastructure “bank” or “fund” since President Obama took office. The fund would be designed to vet and provide cash for large projects that use multiple modes of transportation and take several years to complete. It’s a safe bet that we’ll hear more about this idea in the weeks to come as Transportation Department officials trot up to Capitol Hill to brief lawmakers on their ideas.

Obama sees infrastructure investment as the key to job growth and economic competitiveness. The infrastructure bank would ensure success on large transportation projects because the administration would select only the best ideas for federal funding, in the White House view. Skeptics in Congress have balked at an infrastructure bank, worrying that it would face the same problems as the politically unpopular Fannie Mae and Freddie Mac. House Republicans are unlikely to give the Transportation Department the funding to make an infrastructure bank work as Obama would like.

Is an infrastructure bank an idea ahead of its time? What are the best arguments to convince naysayers that it could work? Could it be established initially as a pilot program that could grow in later years? How much money would be needed to allow the administration to effectively select and encourage projects that otherwise might not get off the ground? How important is buy-in from states, local governments, and the private sector?