Strategy Page

AT: trade off DA

(McConaghy, Ryan, Deputy Director at the Schwartz Initiative on Economic Policy, and Kessler, Jim, Senior VP at Third Way, January 2011, “A National Infrastructure Bank”, Schwartz Initiative on Economic Policy) FS

Above all, Obama needs to spell out big, concrete initiatives that can inspire public confidence that his administration has properly diagnosed the economy’s structural ills and prescribed realistic remedies.

**MISCELLANEOUS**

AT: Econ Impact Turns the Case

National bank will boost infrastructure even during economic decline

Garrett-Peltier, 10 --- research fellow at the Political Economy Research Institute at the University of Massachusetts, Amherst (11/1/2010, Heidi, Dollars & Sense, “The case for a national infrastructure bank: a bank could be a recession-proof source of jobs,” Factiva, JMP)
In any case, a national infrastructure bank would make an important contribution to upgrading and expanding the country's infrastructure. It would boost the overall level of infrastructure spending. By leveraging private investment, it could continue to fund infrastructure projects even during recessions. Plus, it would make infrastructure spending more equitable since it would raise funds from a geographically distributed population, then target those funds toward the areas of greatest need.

NIB k/t rail

An AIFA streamlines High Speed Rail efforts and shields it from Republican backlash

Anand 11 MSNBC Staff Writer and Contributor (Anika, “Bank plan would help build bridges, boost jobs Bill gains traction, but foes fear another Fannie-Freddie disaster”, 7-6-2011, MSNBC, http://today.msnbc.msn.com/id/43606379/ns/today-today_news/t/bank-plan-would-help-build-bridges-boost-jobs/#.T-NaCrVYss9) RaPa

Advocates offer a laundry list of benefits for an “Ibank.” At the top of the list, they tout the bank’s political independence. The bank would be an independent government entity but would have strong congressional oversight. Bank board members and the CEO would be appointed by the president and confirmed by the Senate. Kerry says this structure would help eliminate pork-barrel earmark projects. If, for example, private investors wanted to invest in a project, under the BUILD Act they could partner with regional governments and present a proposal to the bank. The bank would assess the worthiness of the project based on factors like the public’s demand and support, and the project's ability to generate enough revenue to pay back public and private investors. The bank could offer a loan for up to 50 percent of the project’s cost, with the project sponsors funding the rest. The bank would also help draft a contract for the public-private partnership and ensure the government would be repaid over a fixed amount of time. If the Ibank funded something like the high-speed rail project, it would become another investor alongside a state government, a private equity firm or another bank. The project sponsors' loans would be repaid by generating revenue from sources such as passenger tickets, freight shipments, state dedicated taxes. Relies on loans Under previous proposals, which never have gained much momentum, an infrastructure bank would have offered grants, which would be more costly to taxpayers. The BUILD Act relies on loans instead, and project borrowers would be required to put up a reserve against potential bad debt. The bank would make money by charging borrowers upfront fees as well as interest rate premiums. The bill’s supporters say this type of public-private partnership model has been successfully applied to the Export-Import Bank of the United States, which has generated $3.4 billion for the Treasury over the past five years. The Export-Import bank finances and insures foreign purchases. It’s important to note that the infrastructure bank is only meant to jump-start infrastructure investment, not fund every project, said Michael Likosky, a senior fellow at NYU's Institute for Public Knowledge and a long-time proponent of a national infrastructure bank. Supporters hope the bank also would jump-start the job market. Former President Bill Clinton endorses the idea of an Ibank, although he has not necessarily thrown his weight behind the BUILD Act. “I think there are enormous jobs there,” he said in an interview last week on CNBC. “Every manufacturing job you create tends to create more than two other jobs in other sectors of the economy and it makes America more competitive, more productive.” According to the Department of Transportation's 2008 numbers, every $1 billion invested in transportation infrastructure creates between 27,800 and 34,800 jobs. And they tend to be well-paying, middle-class jobs construction jobs that cannot be outsourced offshore, said Scott Thomasson with the Progressive Policy Institute. Likosky said the support the BUILD Act has garnered so far has surprised almost everyone involved. “This infrastructure bank is the first thing on the table where we can start to talk about growing the economic pie, an approach toward moving toward prosperity," he said. Advocates say a national infrastructure bank could be the way to take on major projects, such as upgrading America’s power grid, repairing damaged roads and bridges and building high-speed rail lines, an idea that has been discussed for more than 40 years. High-speed rail High-speed rail has become something of a lightning rod issue. President Barack Obama has proposed spending $53 billion over six years to build high-speed rail lines in busy corridors across the country, an idea endorsed as recently as two weeks ago by the United States Conference of Mayors. House Republicans have criticized the plan, saying private investment, not government spending, should be used to build the rail systems, Reuters reported. America is one of the last industrialized countries in the world without high-speed rail and will only get it built through public-private partnerships such as those encouraged by a national infrastructure bank, said Andy Kunz, the president of the US High-Speed Rail Association. The group has been pushing for a 17,000-mile national high-speed rail network run on electricity to be completed by 2030. “Nearly every country in the world has come to us and said they have money to invest in our high-speed rail system in the U.S.,” he said. Kunz said a national infrastructure bank would simplify the process of building a rail network because it would simplify the steps and the number of people needed to approve it. "The bank would focus on the project as the number one issue, rather than constituents and politics as the number one focus," he said.

AT: federalism DA

The plan doesn’t increase federal power--- empowers states

Thomasson 11 (Scott economic and domestic policy director of the progress policy institute “Hearing before the subcommittee on Highways and transit “National Infrastructure Bank: More Bureaucracy and Red Tape”” http://www.scribd.com/doc/92300621/Congressional-Testimony-National-Infrastructure-Bank-Separating-Myths-from-Realities)
Myth #4: A national infrastructure bank would shift more decision making to Washington and out of the hands of states. Reality: A properly structured national infrastructure bank would not be a monolithic central-planning authority that would tie states’ hands and impose its judgment on state funding priorities. To the contrary, a well designed bank would empower states by giving them a new option to pursue low-cost financing of projects of their own choosing, and it would provide them the opportunity to benefit from large-scale projects that cross state borders or that may be too expensive or unwieldy for states to execute alone. In this way, a national bank could complement state infrastructure banks and Highway Trust Fund allocations, and it could also avoid the kind of frustration states have now over the failure of Congress to pass long-term reauthorization bills.

NIB key to unions

The bill is a unique joining of labor and business motivations – Donohue and Trumka prove

US Chamber of Commerce 11 (“U.S. Chamber, AFL-CIO Urge Infrastructure Bank”, 3-16-2011, http://www.uschamber.com/press/releases/2011/march/us-chamber-afl-cio-urge-infrastructure-bank)RaPa

WASHINGTON, D.C. – At a press conference today, Senators John Kerry (D-Mass.), Chairman of the Foreign Relations Committee, Kay Bailey Hutchison (R-Texas), Ranking Member of the Commerce, Science, and Transportation Committee, and Mark R. Warner (D-Va.), Member of the Banking, Housing and Urban Affairs Committee, announced legislation to create an infrastructure bank that would help close America’s widening infrastructure funding gap, create millions of American jobs in the next decade, and make the United States more competitive in the 21st century. U.S. Chamber of Commerce President and CEO Thomas J. Donohue and AFL-CIO President Richard Trumka, who also attended the event, underscored the unique coalition of business and labor uniting around this initiative. “This is a bi-partisan moment to make a once bi-partisan issue bi-partisan once again,” said Sen. Kerry. “Democrats and Republicans, business and labor, are now united to create an American infrastructure bank to leverage private investment, make America the world’s builders once again, and close the deficit in our infrastructure investments. The BUILD Act will create good jobs, strengthen our competitiveness, and do more with less. Most of all, this bill breaks a partisan stalemate to get America back in the game. When you’ve got a Massachusetts Democrat, a Texas Republican, the Chamber of Commerce and the AFL-CIO preaching from the same hymnal, you’ll find a sweet spot that can translate into a major legislative step forward.”
The bill EXPLICITLY includes a clause protecting organized labor rights

Rockefeller 11 (American Infrastructure Investment Fund Act of 2011, 112th CONGRESS, 1st Session, S. 936, http://www.gpo.gov/fdsys/pkg/BILLS-112s936is/xml/BILLS-112s936is.xml) RaPa




“(B) LABOR STANDARDS.—Labor standards under chapter 53 of this title and title 23 shall be applicable to projects described in subparagraph (A), including—

“(i) applicable employee protective arrangement under section 5333(b);

“(ii) the requirement that all laborers and mechanics employed by contractors or subcontractors on construction work performed on the projects be paid wages at rates not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor under subchapter IV of chapter 31 of title 40, United States Code (except for section 3145).
American transportation infrastructure helps organized labor – gives unions leverage over highly demanded materials

Haynes and Boone 09 International corporate law firm with offices in Texas, New York, California, Washington, D.C., Mexico City and Moscow. Haynes and Boone is ranked the 76th largest law firm in the nation by the National Law Journal. (“The ECONOMIC STIMULUS BILL: Opportunities and Risks”, Haynes and Boone LLC, http://www.haynesboone.com/files/Uploads/Documents/Haynes%20and%20Boone%20Stimulus%20Bill%20Memo.pdf) RaPa
The “Buy American” provisions increase organized labor’s leverage at the bargaining table. • Section 1605 of Division A of the Act requires contractors receiving funds under the Act to purchase and use American iron, steel and manufactured goods in the projects for which they are receiving funding, unless, as determined by the contracting department or agency: - Doing so would be inconsistent with the public interest; - There is insufficient iron, steel or manufactured goods of a satisfactory quality produced in the United States; or - Inclusion of such goods or products in the project will increase the cost of the project by more than twenty-five (25%) percent. • While this is good for American steel and iron producers and American manufacturers, since they can expect increased demand for their products, it will also increase organized labor’s leverage at the bargaining table. • The steel and iron producers and manufacturers will, understandably, want to take advantage of the expected increased demand by producing more of their products. Knowing this, organized labor will realize that such businesses will be less willing to weather strikes or other job actions, which would hinder their ability to participate in the increased market, to support their collective bargaining demands. • Thus, American steel and iron producers and American manufacturers should expect unions representing their workers to seek and demand more at the bargaining table. The Act and the February 6, 2009 Executive Order Mandating Project Labor Agreements on projects worth $25 million or more will strengthen the position of the Building Trades and other unions: • Much of the funding provided by the Act is earmarked for large-scale construction projects, including highway construction. For a host of historical reasons, workers in the heavy and highway construction industry have traditionally been more likely to be represented by organized labor. • While the enormous outlay of funds for projects presents a real opportunity for significant additional work for construction contractors that may be struggling in today’s economy and can be expected to create new, or enhance existing, employment opportunities for construction industry workers, these provisions are almost certain to also increase organized labor’s influence on America’s economy. • This is particularly true in light of a federal contracting executive order that President Obama signed on February 6, 2009. - Under the executive order, federal agencies contracting with private businesses for construction projects worth $25 million or more are encouraged to mandate project labor agreements (“PLA”) for the construction project. - Much of the funds provided for in the Act lend themselves to use in construction projects that would be subject to the executive order. - From an employer’s perspective, this can be both good and bad. - Generally speaking, a PLA is a labor agreement that is intended to apply to all phases of, and all contractors and employees working on, a single large construction project. 34 Haynes and Boone, LLP ƒ A typical PLA provides several potential benefits for contractors that become signatory to them, including strong no-strike pledges, expedited dispute resolution mechanisms, and promises not to oppose the contractors’ efforts to secure needed permits for the project, all of which can minimize delay and disruption to the project. ƒ Because all contractors are required to provide the wages and benefits contained in the PLA, each contractor is assured that it will not be at a competitive disadvantage on that basis. • One significant disadvantage of a PLA is that the costs for a project covered by one are typically higher, sometimes significantly so. - A contractor must pay its employees the wages and benefits set forth in the PLA, which are typically higher than those for a non-union project, and over which the contractor has little or no influence. - In addition, PLA’s almost universally require contractors to make contributions to various union benefit funds, such as health and welfare and retirement funds, on behalf of their employees working on the project, and also to deduct union dues from their paychecks. These deductions create additional administrative burdens and costs. - The restrictions contained in a typical PLA regarding management’s rights to make and implement business decisions, such as to whom work will be assigned, can also increase the costs involved in the project. - A typical PLA also requires the contractors to use union hiring halls. The Reach and Impact of Existing Labor and Employment Laws and Regulations is Broadened by Additional Funding Under the Act There are numerous existing labor and employment laws and regulations with which federal contractors already must comply. Although these existing laws and regulations are not even mentioned in the Act itself, the Act’s funding for construction projects will necessarily broaden the reach and impact of existing laws and regulations to new contractors, employees and/or projects. Additionally, it will also be required that all suppliers and subcontractors comply with these laws. These laws and regulations include, most notably, those administered by the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) – such as Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 – as well as the Davis-Bacon and Related Acts, which are administered by the Department of Labor’s Wage and Hour Division. Any contractor receiving funds under the Act will need to understand the requirements of these laws and regulations and take steps to ensure compliance.

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