President Obama used ASCE’s 2013 Report Card for America’s Infrastructure several weeks ago at the Port of Miami to make a renewed push for increased infrastructure investment. The President has been pushing for a more complete set of infrastructure proposals for years and even included the message in his State of the Union this past January.
The Obama Administration’s latest proposal includes:
- A $10 billion infrastructure bank focused on national and regional significance, headed by an independent, bipartisan board.
- America Fast Forward bonds, which would build off the success of Build America Bonds. The bonds would be structured to benefit investors, including pension funds that do not benefit from traditional tax-exempt debt, but the administration says its proposal is close to being revenue-neutral.
- An increase in the cap on certain private activity bonds. In particular, no cap on the amount issued for water projects and a $4 billion increase up to $19 billion for highway and freight facilities. The bonds could also be used for privately owned airports, port facilities, and mass-transit commuting facilities.
- A plan to make foreign pension plans tax exempt for infrastructure and other real property assets. Gains on those investments are now taxable at a 35 percent rate, while domestic pension funds are exempt from such taxes. As a result, big pension funds are not investing in the United States according to the administration.
- An additional $4 billion injection into TIGER grants and the TIFIA (Transportation Infrastructure Finance and Innovation Act) program in FY 2014. Transportation Investment Generating Economic Recovery (TIGER) grant funds were already expanded by MAP-21.
While ASCE supports President Obama’s continued message of increased investments for infrastructure, his plan does not state how the federal government would pay for the proposal. Without a funding package plan in place the proposal will prove challenging to pass through the current Congress.