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A National American Infrastructure Reinvestment Bank—An Idea Whose Time Has Come?

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Stephen R. Rolandi
June 17, 2021

The topic of infrastructure is very much in the news these days, especially if you have been following the negotiations on President Biden’s proposed infrastructure bill with Congressional Republicans on Capitol Hill (the President wants to see a bill passed by summer, before Congress takes its scheduled August recess. Recently, the President scaled back his initial $2.35 trillion proposal to $1.7 trillion; Senator Mitt Romney and a working bi-partisan group of moderate Senators have advanced a new $1.25 trillion proposal that the full Senate would now need to consider before it would go to the President for his consideration.

For readers of ASPA’s PA Times Online looking for some background information on infrastructure, I would refer you to Dr. Roger L. Kemp’s informative article that appeared in last month’s PA Times (May 23, 2021–“America’s Public Infrastructure: A 2021 National Report Card”).

The main points of contention between the latest Senate counter-proposal and President Biden’s revised infrastructure proposal are the amount of spending proposed for various infrastructure projects, and how the projects would be financed.

In this article, I will look at a financing vehicle that the federal government may wish to consider in lieu of corporate income tax rate increases and/or imposition of a gasoline consumption tax.

Such a financing vehicle is a national infrastructure reinvestment bank (NIRB)—NIRBs have as their central policy goal increased investment in infrastructure, which is recognized as central to increasing a nation’s rate of economic growth.

Conceptually, an infrastructure bank is a government-established entity that provides credit assistance to sponsors of infrastructure projects. An NIRB can take many forms, such as: an independent federal agency; federal corporation; government-sponsored enterprise or as a private sector, not-for-profit corporation.

An NIRB is different from a commercial bank or private sector infrastructure fund as it is established by government. A public sector type NIRB would be administered in much the same way as the Federal Deposit Insurance Corporation (FDIC) is run.

NIRBs actually are not new—some examples include: The European Investment Bank (EIB) created by the European Union; the U.S. Export-Import Bank and similar banks found in nations such as the United Kingdom and Canada. Many states and local government also have similar infrastructure investment banks.

In recent years, legislation to create a federal NIRB was proposed in Congress by then Senators Christopher Dodd (D-CT.) and Chuck Hagel (R-NEB.) in 2007. This legislation was supported by President Obama. Similar bills were also proposed in Congress in 2019 and 2020 (there is also a pending proposal to charter an Infrastructure Bank for America, which would be privately owned, managed and funded).

NIRB proponents argue that such a bank has three main advantages over more traditional methods of federal support for infrastructure:

  • NIRBs could increase the total amount of reinvestment in infrastructure by leveraging state, local and private resources (I note that states are now reporting higher levels of tax revenues due to the rebounding post-COVID 19 economy—see New York Times of 5/25/2021);
  • NIRBs could accelerate construction of projects that may be slowed by the current need to await annual budgetary allocation of federal funds;
  • NIRBs could promote the distribution of federal spending on the basis of anticipated returns to investment (ROI); rather than using traditional allocation methods such as funding formulae, discretionary programs and earmarking.

Some administrative issues that would have to be resolved for an NIRB would be: structure; governance; project selection; duplication of existing programs; as well as insuring that such a bank would be financially self-sustaining and accelerate investment. Advocates point out that an adequately sized and funded NIRB could provide the $5 trillion needed over a 10 year period without new federal taxes or deficits. NIRBS are seen as filling policy gaps in the President’s proposals.

The concept of a federal NIRB is supported by the Coalition for a National Infrastructure Bank; the American Sustainable Business Council, 30 state and local legislatures as well as numerous labor organizations and citizen groups.

Improving the current infrastructure network in the United States is now long overdue. And when one considers various infrastructure programs in American history, one can point to infrastructure programs not only in Democratic administrations (FDR; LBJ; Obama; and now President Biden), but also Republican administrations such as Abraham Lincoln (Morrill Act); Theodore Roosevelt (conservation programs and system of national parks): Dwight Eisenhower (Interstate Highway System); and even Henry Clay, although not a Republican but a member of the Whig Party (forerunner of the Republican Party), who advocated the, “American System,” of internal improvements in 1832.

Financing infrastructure improvements is, and should be, a bi-partisan cause that both Democrats and Republicans need to come together on. The voters—and future generations—will benefit in the long run.

My hope is that the NIRB will be considered as Congress and the White House move forward on a new infrastructure plan.

Author: Stephen R. Rolandi retired in 2015 after serving with the State and City of New York. He holds BA and MPA degrees from New York University, and studied law at Brooklyn Law School. He teaches public finance and management as an Adjunct Professor of Public Administration at John Jay College of Criminal Justice (CUNY) and Pace University. Professor Rolandi is a Trustee of NECoPA; President-emeritus of ASPA’s New York Metropolitan Chapter and past Senior National Council Representative. He has also served (and continues to serve) on many other association boards and committees in New York State and Washington, DC. You can reach him at:

 [email protected] or [email protected] or 914.536.5942 or 212.237.8000.

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