The US Needs an Infrastructure Bank

[Commentary] Our nation's investment in its physical infrastructure is far below what is necessary to meet its needs. Infrastructure spending in real dollars is about the same now as it was in 1968 when the economy was a third smaller. No wonder the American Society of Civil Engineer gave America's infrastructure a failing grade of D in its 2009 report.

The writing is on the wall: Our aging infrastructure will eventually constrain economic growth. This is why the president's Economic Recovery Advisory Board, an independent bipartisan group of business, academic and labor leaders of which we are members, recommends the establishment of a National Infrastructure Bank (NIB). The purpose of the bank is to invest in merit-based projects of national significance that span both traditional and technological infrastructure—roads, airports, bridges, high-speed rails, smart grid and broadband—by leveraging private capital.

Infrastructure banks have proven successful elsewhere in the world, most notably in the European Union. It's time we accept that government alone can no longer finance all of the nation's infrastructure requirements. A national infrastructure bank could fill the gap.

We believe that the NIB should be structured as a wholly owned government entity to keep borrowing costs low, align its interests with the public's, and avoid the conflicting incentives of quasi-government agencies. We also recommend that the NIB be run by a government-appointed board of professionals with the requisite expertise to evaluate complex projects based on objective cost-benefit analysis.