WASHINGTON—A bipartisan group of senators, joined by both business and labor leaders, on Tuesday backed the creation of a government-owned but independent infrastructure bank to help the nation deal with its daunting shortfall in spending on transportation, energy and water projects.
Sen. John Kerry, D-Mass., said the bank could generate as much as $640 billion in its first 10 years to "help bridge the infrastructure deficit that has been plaguing our nation for decades."
Appearing with Kerry at a news conference to promote the bank proposal were fellow Democrat Mark Warner of Virginia, Republican Kay Bailey Hutchison of Texas, U.S. Chamber of Commerce President Thomas Donohue and AFL-CIO President Richard Trumka.
The idea of creating an infrastructure bank is not new, but Kerry that his proposal was different, reflecting today's budgetary restraints and the urgency of the nation's infrastructure needs.
The bank, to be established with federal seed money of $10 billion, but would then become self-sustaining, relying on the private sector for investments while giving out loans and loan guarantees -- not grants -- for projects of national or regional significance and at least $100 million in size.
"We have a choice," Kerry said. "We can either build and compete and create jobs for our people, or we can fold up."
He noted that the nation would have to spend $250 billion a year over the next 50 years just to meet surface transportation needs, and that currently the United States spends only 2 percent of gross domestic product on infrastructure, compared to 5 percent for Europe and 9 percent for China.
Trumka said the country now spends less than 40 percent of what is required to meet infrastructure needs. "That's simply unacceptable and simply unsustainable."
The bank would only be involved in projects that generate revenues, from fees or tolls, and, Kerry said, it would be different from the ailing mortgage giants
Donohue said the private sector would be a willing partner with the bank in backing projects. "There is capital all over the world looking for things to get a mandatory return."