President Obama has launched a program that aims to find ways to tap more private-sector dollars to help finance a wide range of U.S. infrastructure projects, but the plan doesn’t include any new federal spending.
The Build America Investment Initiative, which Obama kicked off in a July 17 memorandum to agency heads, consists of several modest, incremental actions, including what he called a new “one-stop shop” at the U.S. Dept. of Transportation to identify barriers to greater use of private transportation infrastructure investment and find ways to surmount them.
Obama, in a speech in Wilmington, Del., said, “There are lots of investors who want to back infrastructure projects because when it’s done right, they get a steady, long-term investment.”
He added, “And lots of states and local governments would welcome more private investment, but they need a partner in the federal government to help do some matchmaking and work through some of the complexities of private financing of infrastructure.”
Jeff Zients, director of the White House National Economic Council, said in a conference call with reporters that the executive action aims to “turbocharge private investment in our roads, rails, highways and bridges.”
Zients said, “Our global competitiveness is directly linked to the strength of our infrastructure.” But he noted that U.S. spending on surface-transportation infrastructure as a share of GDP has dropped about 50% in the last 50 years. “Clearly, if we don’t act, we could lose our competitive edge in infrastructure,” he added
Along with establishing DOT’s Build America Transportation Investment Center, the Obama memo also includes a new interagency working group, chaired by Treasury Secretary Jack Lew and DOT Secretary Anthony Foxx, to focus on speeding up financing and completing major national projects, especially those that involve more than one state.
Foxx said that interagency group will look at areas outside of transportation, including water and energy infrastructure.
In addition, Treasury will host an infrastructure finance summit on Sept. 9 that aims to bring together public officials and private sector developers and investors to discuss innovative financing.
Foxx noted that the private financing shouldn’t be viewed as a replacement for government infrastructure funds, but can help play a role.
The new plan doesn't include any new federal funding. Obama in late February did propose a $302-billion, four-year transportation bill but it has made little headway on Capitol Hill.
Terry O’Sullivan, Laborers’ International Union of North America general president, said in a statement, “Any private-sector resources that can be put to bear on our nation’s infrastructure are welcome; however, these approaches remain a supplement for public investment, not a substitute.”
Matt Girard, chief operating officer of Plenary Concessions, Denver, said of the White House initiative, “It’s definitely a movement in the right direction.” He said in an interview, “It’s getting more dialogue going on a very serious problem with our infrastructure.”
Girard, who also is the new president of the American Road & Transportation Builders Association public-private partnerships (P3) division, said, “Anything that removes hurdles to allow for P3s to be more prevalent—to be another tool in the toolbox for state agencies—is obviously a good thing.”
But he added, “To even have a P3 to be a tool in the toolshed, there’s still got to be other sources of funding to help pay for it.”
Former DOT Secretary Ray LaHood said in a statement that the new program “is the sort of long-term initiative that our economic future requires.” LaHood now is co-chair of advocacy group Building America’s Future.
The launch of the finance inititative comes as Congress is working on legislation to keep the Highway Trust Fund from dipping into a deficit. DOT has said that without new revenue, the trust fund would fall into the red by about late August.