Stop the National Infrastructure Development Bank: Reason Unreasonable?

Wednesday, May 27, 2009

Reason Unreasonable?

A noted libertarian think tank, The Reason Foundation (based in Los Angeles), has apparently not read the texts of S. 1926 or H.R. 3431. Robert Poole, who is director of transportation policy and the Searle Freedom Trust Transportation Fellow at the Reason Foundation (a free market think tank he founded), published an essay on the reason.org website on Feb 3, 2009. You can read the entire essay here.
Mr. Poole wrote:

One of the hottest ideas in infrastructure politics these days is the proposal now in Congress for a National Infrastructure Bank. Presidential candidate Barack Obama, New York City Mayor Michael Bloomberg, and many other big-city mayors have all endorsed the idea, as have a number of trade associations favoring increased infrastructure investment. The leading vehicle is S. 1926, introduced last summer by Sen. Chris Dodd (D, CT) and Chuck Hagel (R, NE).
In short, I'm persuaded that there is a niche that an NIB could fill, to help this country take advantage of the huge pool of investment funds seeking to invest in U.S. infrastructure. {emphasis added}

To Mr. Poole's credit he does recommend some significant modifications to the structure proposed in S. 1926. This blogger doubts these modifications would overcome the constitutional objections.

I hope that Mr. Poole and the Reason Foundation come to their senses.

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Suggested Text for Your Email to Your Senator

Dear Senator __________:

I wish to bring to your attention a bill currently working its way through the United States Senate. At issue is SB 1926 titled the "National Infrastructure Reinvestment Bank" introduced by Senator Chris Dodd (D - Connecticut) and co-sponsored by 12 other Senators including President Obama during the 110th Congress. A version of the bill as recently been reintroduced in the House as H.R. 2521. Given Senator Dodd's position on the Senate Banking Committee, the new Democratic majority, and President Obama's endorsement of this bill, it stands a good chance of earning a vote in the Senate.

It is my view that this bill must be defeated. The bill creates a new government agency that would have the power to 1) "accept for funding any infrastructure project with a Federal price tag of $75 million or more," 2) "unilateral authority to determine the appropriate Federal share of spending for every project accepted," 3) to issue general purpose infrastructure bonds, and 4) "to issue project-based infrastructure bonds for the financing of specific qualified infrastructure projects." The bill provides an initial ceiling of $60 billion with 1% of the proceeds used to fund the new agency's operation.

This bill is objectionable because it short circuits our republican form of democracy. The responsibility of reviewing funding priorities and determining whether and how much tax revenue will be allocated to specific priorities is the responsibility of the United States Congress and I believe that Congress does not have the constitutional authority to delegate this responsibility to an appointed committee tasked with administering a federal agency. As written in Article 1, Section 9: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."

I hope that you will take the time to review SB 1926, determine for yourself whether this bill comports with the tradition of American representative democracy and the Constitution of the United States. If you agree with me, I hope you will take whatever steps are within your power to help defeat this bill including a filibuster if necessary.

Very Respectfully,

Suggested Text for Your Email to Your Representative

Dear Representative ________;

I wish to bring to your attention a bill currently working its way through the United States Congress. At issue is HR 2521 titled the "National Infrastructure Development Bank" introduced by Rep. Rosa DeLauro (D - CT) and co-sponsored by 26 other Congressman. A Similar bill introduced in the last congress was H.R. 3401. A bill identical t0 H.R. 3401 in the Senate, S.1926, was introduced by Senator Dodd, Chair of the Senate Banking Committee, and had as a co-sponsor President (then Senator) Obama. It seems to me it stands a good chance of earning a vote given this backing.
It is my view that this bill must be defeated. The bill creates a new government agency that would have the power to (A) make senior and subordinated loans and purchase senior and subordinated debt securities ... the proceeds of which are to be used to finance or refinance the development of one or more infrastructure projects. (B) To issue and sell debt securities of the Bank ... (C) To issue public benefit bonds and to provide direct subsidies to infrastructure projects from amounts made available from the issuance of such bonds. ... (F) To borrow on the global capital market and lend to regional, State, and local entities, and commercial banks for the purpose of funding infrastructure projects.
This bill is objectionable because it short circuits our republican form of democracy. The responsibility of reviewing funding priorities and determining whether and how much tax revenue will be allocated to specific priorities is the responsibility of the United States Congress. I believe that Congress does not have the constitutional authority to delegate this responsibility to an appointed committee tasked with administering a federal agency. As written in Article 1, Section 9: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."
I hope that you will take the time to review H.R. 2521 and H.R 3401, determine for yourself whether these bills comport with the tradition of American representative democracy and the Constitution of the United States. If you agree with me, I hope you will take whatever steps are within your power to help defeat this bill.

Very Respectfully,

Stop the National Infrastructure Development Bank

Wednesday, May 27, 2009

Reason Unreasonable?

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