CG/LA Infrastructure's InfraBlog
Saturday, June 22, 2013 2:00 am
U.S. Rep. John Delaney deserves major credit for two things: for proposing financial legislation that has bipartisan support, and for crafting a bill that would help pay for a fast-deteriorating national transportation infrastructure without increasing the nation’s debt or raising taxes.
In a Congress that’s riven by partisanship and can’t seem to agree on even the simplest policy, both are respectable achievements — made all the more significant because Delaney isn’t even out of his freshman term yet.
Delaney has 14 Republicans and 14 Democrats sponsoring his Partnership to Rebuild America Act. The legislation would finance $750 billion worth of repairs to our national infrastructure, rebuilding and renovating transportation, energy, communications, water and education brick-and-mortar projects, according to information from the congressman’s office.
“We can’t compete in the global economy of the 21st century without a significant investment in our infrastructure,” Delaney said in a statement. “At no cost to the taxpayer, this legislation will finance a massive investment in U.S. infrastructure, get Americans back to work now, and position our businesses to grow for decades to come.”
At its core is a fund to which local and state governments could apply for loans or guarantees for qualified capital projects. That nonprofit fund — the American Infrastructure Fund — would be financed by selling $50 billion in bonds to American companies wishing to return some of their overseas earnings to the U.S. In return, a certain amount of those returned earnings would be tax-free. That $50 billion would be leveraged to $750 billion.
When you consider, for example, that Apple’s CEO recently testified before a Senate committee that the company avoided U.S. taxes on about $74 billion over four years by placing its intellectual property rights overseas in Irish subsidiaries, it’s clear some mechanism needs to be created to encourage reinvestment in the U.S. economy.
As things stand, those companies rely on federally supported American infrastructure for their success without having to pay for it. And that infrastructure is in dire need of an investment of $3.6 trillion by 2020, according to the American Society of Civil Engineers. “Our infrastructure systems are failing to keep pace with the current and expanding needs, and investment in infrastructure is faltering,” the society noted in its 2013 report card.
Delaney’s legislation, if enacted, would create an auction in which U.S. companies could bid for favorable rates to bring their money back into the U.S., based on a multiplier for every dollar they spend on infrastructure bonds. The example his office gives, assuming the auction results in a 1:4 ratio, is that a company that spends $1 would be able to repatriate $4 tax-free.
Another requirement of the legislation is that 25 percent of projects funded must be public-private partnerships.
Edward Luce, a columnist for the Financial Times, described Delaney’s proposal as “economically useful and politically sellable.” We’d agree, although we don’t doubt this bill will bog down at some point — this just seems to be the state of U.S. politics at this moment in history.
However, credit where credit is due: Delaney, a financier before becoming a politician, was sent to Washington promising some out-of-the-box thinking, and that’s what he’d delivered with this bill. It’s so sensible, both House Republicans and Democrats can get behind it. And we’re behind this, too.
Taken from The Frederick News-Post: http://www.fredericknewspost.com/news/economy_and_business/business_topics/building/article_24721fe8-f965-5be8-b7a4-336171f0d288.html