Obama Proposes a $50 Billion Infrastructure Bank

As the New York Times reports, President Obama yesterday proposed $50 billion in infrastructure investment to help spur job creation. The later-day Hoovers in the Republican Party will shout about more government spending, but the proposal makes economic sense. The investment, which would be managed by an infrastructure bank, would deploy some of the unused capacity that has been sitting idle for two years, and create long term assets like roads, runways and rail lines, which have useful lives measured in decades. These assets will still be in use long after the government has paid off the low interest debt used to finance their construction.

In a Labor Day speech, Obama pointed out that Republicans in Congress were not likely to help pass the infrastructure plan:

When it comes to just about everything we’ve done to strengthen our middle class, to rebuild our economy, almost every Republican in Congress says no. (Boos.) Even on things we usually agree on, they say no. If I said the sky was blue, they say no. (Laughter and applause.) If I said fish live in the sea, they’d say no. (Laughter.) They just think it’s better to score political points before an election than to solve problems. So they said no to help for small businesses, even when the small businesses said we desperately need this. This used to be their key constituency, they said. They said no. No to middle-class tax cuts. They say they’re for tax cuts; I say, okay, let’s give tax cuts to the middle class. No. (Laughter.) No to clean energy jobs. No to making college more affordable. No to reforming Wall Street. They’re saying right now, no to cutting more taxes for small business owners and helping them get financing.

Actually, some Republicans like the idea of an infrastructure bank:

Indeed, some leading proponents of such a bank — including Gov. Arnold Schwarzenegger, Republican of California; Gov. Ed Rendell, Democrat of Pennsylvania; and Michael R. Bloomberg, the independent mayor of New York — would like to see it finance a broader range of projects, including water and clean-energy projects. They say such a bank would spur innovation by allowing a panel of experts to approve projects on merit, rather than having lawmakers simply steer transportation money back home.