National Infrastructure Bank Fills the Gap of the Biden Plan

 by Alphecca Muttardy, March 31, 2021

On March 31, President Joe Biden unveiled a bold $2.25 trillion plan – named the American Jobs Plan – to repair U.S. infrastructure, address climate change, and accelerate growth in great paying jobs. Spending would take place over ten years (see right-hand column in box below), and would rely on a hike to the corporate tax rate to 28 percent, and better world-wide corporate tax enforcement, to pay for the plan over 15 years.

The American Jobs Plan (AJP) makes a great start at rebuilding crumbling infrastructure, and re-authorizing infrastructure spending through the Federal Budget. However, even larger sums will be needed to cover ALL of our nation’s needs, which the American Society of Civil Engineers (ASCE) estimates will cost $6.1 trillion over ten years in seventeen infrastructure categories. After $3.5 trillion in committed Federal spending through the AJP, and state and local financing become available, a funding gap of $2.6 trillion will still remain. Of that gap, over one trillion is needed just for new water infrastructure, including $286 billion to replace 11 million water service lines that contain lead. If expansive affordable housing, high speed rail, and other mega projects are added, then an extra $5 trillion over 10 years would ultimately be required.

An adequately sized National Infrastructure Bank (NIB), meanwhile, could provide the $5 trillion to top up financing for public infrastructure without new Federal taxes or deficits. As set out in House Bill HR 6422, the NIB would be capitalized by private investors contributing their Treasury holdings in exchange for preferred stock, and would give out loans just like any commercial deposit-taking bank. The added $5 trillion investment would create up to 25 million new great-paying jobs, supercharge economic growth, and vastly improve state and local tax receipts, providing the funding for loans to be repaid.

The Coalition for a National Infrastructure Bank, the American Sustainable Business Council, 30 state and local legislatures, and numerous labor organizations and concerned citizens have expressed their support for this funding solution to bolster the American Jobs Plan. We ask the Biden Administration infrastructure and jobs teams to consider HR 6422 in their policy mix as well.