Our nation’s real economy has been in decline since the post-JFK era. This has been punctuated by a series of crises, including the Great Recession of 2009, and now the covid-driven near depression. All along, our underlying infrastructure has decayed. Our spending on infrastructure has fallen to its lowest level in 70 years, to 2.5% of our nation’s GDP. That is half the comparable level in Europe, and one-third the level in China. As a result, we are losing our world-wide competitive edge. Over our 240-year history, infrastructure spending has largely accelerated only when a National Infrastructure Bank has been in place (there have been four major ones in the past, starting with the First Bank of the United States created in 1791 by Treasury Secretary Alexander Hamilton, and ending with FDR’s Reconstruction Finance Corporation (RFC).) Similarly, infrastructure spending has fallen when the charters for these four banks – all of them successful – were permitted by Congress to lapse.

The NIB will be financed by the deposit of $500 Billion in US Treasuries and will lend out $4-5 Trillion. The NIB will operate like a commercial bank, except that it will be a public bank, operating in the public interest. The bank will issue loans for approved infrastructure projects, and lending rates will be kept low. These loans will be made on the Federal, state, regional and local levels, largely to public, but also private interests. The bank will hold deposits.  The bank will sell preferred stock to start up, but the shareholders will have no control over the bank. (Further details about how the bank is initially established and elaboration of all these answers can be found here.)

The bank will create 25 million high paying jobs. Job creation will be encouraged by the “Buy American” provisions of the NIB, and the jobs will be created by using Project-Labor Agreements (PLA’s). These jobs are largely in the construction trades, and will pay Davis-Bacon wages, with full benefits. While some jobs will last throughout the construction of a particular project, new projects will continue to be financed by the bank, and therefore, most jobs will be ongoing. 

There is an urgent need to recruit younger workers and train them in the required trades to build infrastructure in the US. The NIB will engage all available apprentice programs, such as those run by major labor organizations, and will coordinate with technical schools, community colleges, and more. Unlike service economy jobs which are filled today by younger workers, the jobs created by the NIB will enable workers to support a family based on a single income. Those working in NIB created jobs, will have the satisfaction of having participated in the rebuilding of our nation.

The National Infrastructure Bank Act of 2020 was introduced in March of 2020 by Congressman Danny Davis (D-Il), and had three co-sponsors. The Coalition for the National Infrastructure Bank is actively recruiting support in the new Congress (117th), so that when the bill is reintroduced, the legislation will be bipartisan. To build support, the Coalition requests all legislative bodies to pass resolutions supporting creation of the NIB, including state, county, or local governments. All organizations concerned with rebuilding infrastructure, unemployment, or social inequity, are encouraged to pass resolutions for the NIB. Our current endorsements and a model resolution are available.

Most infrastructure (over 80%) is currently financed on the state and local level. The current funding approach for infrastructure has run into a brick wall: the coronavirus pandemic. Borrowing is maxed out, even as the requirements for infrastructure are rapidly rising, partly due to extreme weather. Federal spending has failed to provide the needed investment. Therefore, a new approach is needed:  The NIB.

Infrastructure is nonpartisan. All parties agree upon the urgent need for massive increases in investment; the disagreement is how to fund it. Once our political leadership understands the principle of the NIB and are pushed by a groundswell of support from the grassroots, Congress will “get it”. There is no other choice.

Vested interests oppose the NIB. That is, those who are vested in the broken-down system of infrastructure spending we have today. These include members of Congress who want to stick with the current appropriations system for infrastructure, and want to “go small”, not big. Also, some private interests who believe that they can make profits from infrastructure do not support the NIB.

The NIB will be all- inclusive, operating in all states and regions, including Native American reservations; it will not favor one area over another because of political clout.  (Note: The NIB does not replace ongoing successfully appropriated infrastructure but pays for what is unfunded.)

The NIB will effectively cost the taxpayers nothing; there will be no new taxes; there will be no deficit created and no new federal debt. The Bank expects that its loans will be repaid (except in special cases). Profits from the bank’s lending will cover the operating expenses of the bank, with initial startup costs of 50 million dollars over two years. The annual required $10 Billion Congressional allocation for the NIB, after the first year, will be returned in full by the Bank’s earnings' stream.

It is difficult to change how people think, including elected officials. In four major crises, the United States has created a National Infrastructure Bank, and then shut it down. 

This time let’s make the National Infrastructure Bank the "new normal”!