Future Infrastructure budget cuts are inevitable – We must locate other means of investment to rebuild and innovate

The bank would include roads, bridges, new rail lines, and bus systems

The Brookings Institution Obama’s Infrastructure Agenda: Understanding The Pillars Washington, D.C. Thursday, September 16, 2010, www.brookings.edu/events/2010/09/16-infrastructure

In looking at how to use that money, we looked at potentially putting it to fund some of our maintenance issues, putting it towards specific projects, but then we kind of hit on -- and the state infrastructure bank idea. And we are basically going to I think model the state infrastructure bank after the TIFIA Direct Loan Program, providing direct loans at lower than market interest rates to local governments, board of supervisors, private sector partners, and transportation infrastructure projects, et cetera, with the maturity of 20 to 30 years. Eligible projects would include pretty much anything from new roads to bridges to new rail lines, acquiring new buses for transit systems, pretty much the broad spectrum of transportation.

Incremental – Intercity rail, freight, air traffic

Everett Ehrlich 2010, Ehrlich served in the Clinton Administration as under secretary of commerce for economic affairs, president of ESC Company, a Washington, DC-based economics consulting firm. Senior vice president and research director for the Committee for Economic Development, and assistant director of the Congressional Budget Office, “A National Infrastructure Bank: A Road Guide to the Destination,” Progressive Policy Institute, October 2010

Looking Forward

I believe a Bank is the right step in the evolution of federal infrastructure programs. We should implement one now, focusing it on a handful of national projects to begin – perhaps rapid intercity rail, upgrading of the Chicago freight rail nexus, and modernization of the air traffic control system. We can then gradually expand the Bank – in part by imposing and gradually lowering the threshold of federal involvement that requires the Bank’s approval until the major projects of the modal programs have all been moved to the Bank’s selection process.

Adv: Roads

Highway trust fund is failing now, destroying its benefits

Creating a Nation infrastructure bank would allow HTF to work

Rendell 11( May 17, 2011 Rendell is the former governor of Pennsylvania. In a presentation before the senate for building Americas future http://www.finance.senate.gov/imo/media/doc/Testimony%20of%20Ed%20Rendell.pdf)

One other way that rural areas will benefit is if existing grant programs that fund large scale projects would concentrate on smaller projects. For example, the Highway Trust Fund has recently been under threat of depletion and insolvency. Transfers of funds from the general fund into the Highway Trust Fund have kept the program alive. I believe that if the National Infrastructure Bank stands up it could ease the current strain on the Highway Trust Fund by funding and financing the larger-scale projects through the Bank. Therefore, allowing more Highway Trust Fund dollars to remain available for smaller projects in rural ¶ areas. I think that is a benefit that must be studied and explored.

HTF is key to maintaining highways

Lewis 08 (John Lewis is the U.S. Representative for Georgia's 5th congressional district, serving since 1987 and is the dean of the Georgia congressional delegation. He was a leader in the American Civil Rights Movement and chairman of the Student Nonviolent Coordinating Committee. “Understanding the highway trust fund” http://johnlewis.house.gov/issue/transportation/understanding-highway-trust-fund)

On July 23, 2008, the House passed H.R.6532, a bill that restores the Highway Trust Fund balance by making an amendment to the IRS code. This legislation will help bring more construction jobs, connecting communities, cleaner air, and encouraging businesses to invest and grow in Atlanta and across the country. Few people realize that 97 percent of the nation’s roads and highways are owned by state and local governments, and most transit systems are owned and operated by public state and local agencies. Federal support for many, many major state and local highway and transit projects are funded through the Highway Trust Fund.

Ineffective Highways lead to econ decline

Little, 11 (Director, Keston Institute for Public Finance and Infrastructure Policy (4/5/2011, Richard, “Infrastructure Investment and U.S. Competitiveness,” http://www.cfr.org/united-states/infrastructure-investment-us-competitiveness/p24585, JMP)
The massive network of seaports, waterways, railroads, and highways we built in the nineteenth and twentieth centuries were designed to unlock the nation's natural resources, agriculture, and manufacturing strength and bring these products to market. Today, despite a dynamically changing economy, these sectors along with trade and transportation still account for more than a quarter of U.S. GDP or $3.5 trillion, but many transport linkages have become bottlenecks due to long-delayed repair and replacement. The entire U.S. economy, as well as consumers, would benefit from a more efficient and resilient supply chain. Unfortunately, for far too long, Americans have been lulled by their political leadership into a false sense of entitlement. Faced with the prospect of raising taxes or charging fees to cover the cost of maintaining these systems, they have chosen to do neither. As a result, our highways and bridges decline at alarming rates. Most of the other systems vital to our interests suffer the same fate. Fixing this is well within our control, the challenge will be to muster the will to do so. The first step in addressing this problem will be to ensure that adequate revenue streams are in place. Whether this revenue comes from the fuel tax, tolls, or other mechanisms is less important than having the funds to work with. Without a move to revenue-based models, necessary renewal of critical infrastructure will be long delayed, if provided at all. We can show that we value these systems by agreeing to pay for their upkeep or own both the responsibility for economic decline and its consequences.

Economic decline heightens the risk of global conflict—multiple scenarios.

Burrows and Harris 9 Mathew J. Burrows, counselor in the National Intelligence Council, member of the CIA, holds a Ph.D. from Cambridge University, and Jennifer Harris, Member of the Long Range Analysis Unit at the National Intelligence Council, holds an M.Phil. in International Relations from Oxford University, 2009 “Revisiting the Future: Geopolitical Effects of the Financial Crisis,” The Washington Quarterly, Volume 32, Issue 2, April, Available http://www.twq.com/09april/docs/09apr_Burrows.pdf, Accessed 08-22-2011, p. 35-37

Of course, the report encompasses more than economics and indeed believes the future is likely to be the result of a number of intersecting and interlocking forces. With so many possible permutations of outcomes, each with ample [end page 35] opportunity for unintended consequences, there is a growing sense of insecurity. Even so, history may be more instructive than ever. While we continue to believe that the Great Depression is not likely to be repeated, the lessons to be drawn from that period include the harmful effects on fledgling democracies and multiethnic societies (think Central Europe in 1920s and 1930s) and on the sustainability of multilateral institutions (think League of Nations in the same period). There is no reason to think that this would not be true in the twenty-first as much as in the twentieth century. For that reason, the ways in which the potential for greater conflict could grow would seem to be even more apt in a constantly volatile economic environment as they would be if change would be steadier. In surveying those risks, the report stressed the likelihood that terrorism and nonproliferation will remain priorities even as resource issues move up on the international agenda. Terrorism’s appeal will decline if economic growth continues in the Middle East and youth unemployment is reduced. For those terrorist groups that remain active in 2025, however, the diffusion of technologies and scientific knowledge will place some of the world’s most dangerous capabilities within their reach. Terrorist groups in 2025 will likely be a combination of descendants of long established groups—inheriting organizational structures, command and control processes, and training procedures necessary to conduct sophisticated attacks—and newly emergent collections of the angry and disenfranchised that become self-radicalized, particularly in the absence of economic outlets that would become narrower in an economic downturn.

The most dangerous casualty of any economically-induced drawdown of U.S. military presence would almost certainly be the Middle East. Although Iran’s acquisition of nuclear weapons is not inevitable, worries about a nuclear-armed Iran could lead states in the region to develop new security arrangements with external powers, acquire additional weapons, and consider pursuing their own nuclear ambitions. It is not clear that the type of stable deterrent relationship that existed between the great powers for most of the Cold War would emerge naturally in the Middle East with a nuclear Iran. Episodes of low intensity conflict and terrorism taking place under a nuclear umbrella could lead to an unintended escalation and broader conflict if clear red lines between those states involved are not well established. The close proximity of potential nuclear rivals combined with underdeveloped surveillance capabilities and mobile dual-capable Iranian missile systems also will produce inherent difficulties in achieving reliable indications and warning of an impending nuclear attack. The lack of strategic depth in neighboring states like Israel, short warning and missile flight times, and uncertainty of Iranian intentions may place more focus on preemption rather than defense, potentially leading to escalating crises. [end page 36] Types of conflict that the world continues to experience, such as over resources, could reemerge, particularly if protectionism grows and there is a resort to neo-mercantilist practices. Perceptions of renewed energy scarcity will drive countries to take actions to assure their future access to energy supplies. In the worst case, this could result in interstate conflicts if government leaders deem assured access to energy resources, for example, to be essential for maintaining domestic stability and the survival of their regime. Even actions short of war, however, will have important geopolitical implications. Maritime security concerns are providing a rationale for naval buildups and modernization efforts, such as China’s and India’s development of blue water naval capabilities. If the fiscal stimulus focus for these countries indeed turns inward, one of the most obvious funding targets may be military. Buildup of regional naval capabilities could lead to increased tensions, rivalries, and counterbalancing moves, but it also will create opportunities for multinational cooperation in protecting critical sea lanes. With water also becoming scarcer in Asia and the Middle East, cooperation to manage changing water resources is likely to be increasingly difficult both within and between states in a more dog-eat-dog world.

Uniqueness: HTF Fail

Highway Trust Fund will Fail in the Status Quo

Nichols and Honeywell 2011 (Nichols is a former city reporter for the Boston Globe and has written stories on business, education, health, arts and religion for numerous publications including the Los Angeles Times “Six Ideas for Fixing the Nation's Infrastructure Problems” http://www.governing.com/topics/transportation-infrastructure/six-ideas. Holeywell’s previous work has been published by the Washington Post and USA Today, and he has appeared on CNN and public radio to discuss his articles. Holeywell graduated from George Washington University in Washington, D.C.-for-fixing-the-nations-infrastructure-problems.html)

That’s a serious problem, according to virtually all transportation experts. The nation’s highways are primarily financed by the Highway Trust Fund, which gets most of its money from a gas tax of 18.4 cents per gallon. The tax has remained unchanged since 1993 and isn’t tied to the price of gas or inflation. As a result, it’s lost a third of its purchasing power over the past 18 years. That’s caused both short- and long-term consequences. In the short term, Congress has had to bail out the trust fund to the tune of $35 billion since 2008 -- the fund spends more money than it takes in. In the long term, the situation is even more problematic. As more and more Americans opt for hybrid and electric vehicles -- and as cars in general continue to become more fuel efficient -- the highway system faces a future in which it is perpetually underfunded. It’s a system, Schroer says today, that is “at best archaic.”

Public-Private partnerships on highways decrease time and money required for building- Studies prove

CBO 12 (Congressional Budget office 1/9/12,”Using public private partnerships to build highways” http://www.cbo.gov/publication/42685)

Assessments of whether public-private partnerships can provide highway infrastructure more efficiently than traditional methods are challenging, in large part because of limited data and research. Only a few studies have focused on the private provision of a highway project—that is, on design and construction as well as on operations and maintenance. That research found that the use of the design-build type of public-private partnership slightly reduced the cost of building highways relative to the cost under the traditional approach and slightly reduced the amount of time required to complete the projects. The studies typically estimated that the cost of building roads through design-build partnerships was a few percentage points lower than it would have been for comparable roads provided in the traditional way. (However, estimates of such savings are quite uncertain, and the effect on costs of using design-build arrangements in the future could differ significantly from what the estimates in those studies imply.) Moreover, under such partnerships, many of the roads were built more quickly. Studies found that for projects with contracts valued at more than $100 million, the total time required to design and build the road declined by as much as a year on some projects—in part because the public-private partnership bundled the design and construction contracts and so eliminated a second, separate bidding process for the additional tasks.

NIB will help eliminate earmarks and evaluate infrastructure decisions using Cost benefit analysis

Zakaria ’11 (6/13/11, Fareed Zakaria hosts CNN’s flagship foreign affairs show, is Editor-at-Large of TIME Magazine, a Washington Post columnist, and a New York Times bestselling author. CNNWorld. “US needs an infrastructure bank” http://globalpublicsquare.blogs.cnn.com/2011/06/13/zakaria-u-s-needs-an-infrastructure-bank/?iref=allsearch)

We need a national infrastructure bank to repair and rebuild America's crumbling infrastructure. The House Majority Leader, Eric Cantor, has played down this proposal as just more stimulus, but if Republicans set aside ideology, they would actually see that this is an opportunity to push for two of their favorite ideas - privatization and the elimination of earmarks. That's why Republicans like Kay Bailey Hutchison and Chuck Hagel are strongly in favor of such a bank.¶ The United States builds its infrastructure in a remarkably socialist manner. The government funds bills and operates almost all American infrastructure.¶ Now, in many countries in Europe and Asia the private sector plays a much larger role in financing and operating roads, highways, railroads, airports and other public resources. An infrastructure bank would create a mechanism by which you could have private sector participation.¶ Yes, there would be some public money involved, though mostly through issuing bonds. And with interest rates at historic lows, this is the time to use those low interest rates to borrow money and rebuild America's infrastructure. Such projects have huge long-term payoffs and can genuinely be thought of as investments, not expenditures. A national infrastructure bank would also address a legitimate complaint of the Tea Party - earmark spending. One of the reasons federal spending has been inefficient is that Congress wants to spread the money around in ways that might make political sense but are economic nonsense. An infrastructure bank would make those decisions using cost-benefit analysis in a meritocratic system rather than spreading the wealth around and basing these decisions on patronage, politics and whimsy. Let's face it, America's infrastructure is in a shambles. Just a decade ago, we ranked sixth in infrastructure in the world according to the World Economic Forum. Today we rank 23rd and dropping. We will not be able to compete with the nations of the world if we cannot fix this problem.
Mcconaghy and Kessler 11 (January, Ryan McConaghy is Deputy Director of the Third Way Economic Program, a think tank for new economic ideas.¶ . Jim Kessler is the Vice President for Policy at Third ¶ Way. Schwartz initiative on American Economic Policy “A National Infrastructure Bank” http://www.bernardlschwartz.com/political-initiatives/Third_Way_Idea_Brief_-_A_National_Infrastructure_Bank-1.pdf)

Financing the infrastructure upgrades needed to support America’s economy ¶ and meet its new challenges won’t be cheap, but there are billions in efficiencies ¶ that can be wrung out of the system with real structural changes, and the economic costs of inaction will be higher. By leveraging private resources, the NIB ¶ will ensure that future spending on infrastructure will get the utmost bang for the ¶ taxpayer buck. It will also cut down on waste by supporting only projects that ¶ serve demonstrated regional or national needs and satisfy goal-based criteria.

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