The Grownups Throw Cold Water On Another Silly Obama Scheme
[A] new report from the Congressional Budget Office seems skeptical of the idea in practice, at least as it concerns surface transportation projects: “At least initially, however, an infrastructure bank would probably generate neither significant new revenues for surface transportation nor significant new interest from private-sector investors, when considered as a share of current investment in surface transportation infrastructure.”
Among the problems, according to CBO: a) most current highway spending is for projects too small to meet the minimum size requirements commonly proposed for an infrastructure bank; and b) an NIB might merely shift projects from being funded by state governments to the federal government, resulting in no net increase in investment.
But the biggest drawback is that while NIB proponents like the Obama White House sell it as some kind of non-political, technocratic institution that would pick projects on merit, that goal probably wouldn’t survive the NIB’s first contact with political reality in Washington. The CBO:
Proponents of an infrastructure bank envision an independent federal entity that would select projects on the basis of technical rather than political factors. Although establishing an infrastructure bank outside of DOT might change some of the forces affecting its decisionmaking or its organizational efficacy, any entity created and funded by the Congress would be subject to similar political pressures and federal administrative procedures.A national infrastructure bank might turn into a crony capitalist’s delight and a pork barreler’s dream come true.