Senators Introduce BUILD Act for Infrastructure FinancingMar 17th, 2011 | By Roy Rasmussen | Category: Business and Finance
Tuesday Senators John Kerry (D-MA), Mark Warner (D-VA), and Kay Bailey Hutchison (R-TX) introduced the BUILD Act to create a national bank for financing infrastructure funding. The Senators proposed to launch the bank with initial government seed money, in order to attract funding from private investors to support continued operations.
The proposed institution would be called the American Infrastructure Financing Authority (AIFA). It would provide loans and loan guarantees to fund federal, state, and local priority projects.
Modeled on the the Export-Import Bank model, AIFA would receive initial government seed funding and then would be required to become at least 50 percent sustained by private investment. The Senators proposed $10 billion government seed money to launch AIFA. The White House had originally sought a $30 billion infrastructure bank that would include grants. The proposal was toned down to $10 billion with private support to make it more likely to receive bipartisan support.
The White House’s original conception had located the bank inside of the Department of Transportation. The new proposal would make the bank an independent entity.
The AIFA proposal won over some opponents of previous incarnations of the proposal. The proposal was supported by Senator Barbara Boxer (D-CA). Boxer had previously said she’d prefer strengthening the Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program to creating a new institution like Fannie Mae and Freddie Mac.
The Senators’ BUILD Act proposal received support from US Chamber of Commerce President and CEO Thomas J. Donohue and from the AFL-CIO.
The Senators and business experts anticipate AIFA attracting hundreds of billions in private infrastructure funding over the next several years.