Senators Ron Wyden (D-OR) and John Hoeven (R-ND) spoke at the Bipartisan Policy Center (BPC) last week about the ability of private investment to bridge the gap between infrastructure needs and existing funding.
In a bipartisan effort to catalyze investment in American infrastructure, Sens. Wyden and Hoeven have introduced the Move America Act of 2015. The bill creates new tools within the tax code to better incentivize private investment in public infrastructure through Public-Private Partnerships. The act aims to bring billions of dollars of investment to state and local governments to grow and repair their infrastructure by expanding tax-exempt private activity bonds and creating a new infrastructure tax credit.
The conversation took place under the looming expiration of the Highway Trust Fund and the federal government’s surface transportation programs. The current extension of the federal government’s surface transportation programs, the latest in a long series of short-term extensions, expires at the end of this month. While there is bipartisan agreement on the need for a long-term plan to fund America’s declining infrastructure, Congress has yet to establish a clear path on how this need will be met, which portions will be funded and which financed, and what role private investment can and will play in meeting these challenges.
When asked how optimistic he is about the Move America Act passing amidst the failure of Congress to produce a long-term infrastructure solution, Sen. Wyden said that “every once in a while in policy, you reach a time when people say, ‘Enough.’ We are approaching that in transportation.” He noted that according to the Joint Committee on Taxation, their legislation would result in an $8 billion taxpayer investment in infrastructure that would reap $226 billion worth of infrastructure investments, and added that “I don’t believe there is an approach out there today that has a stronger return on investment than the Move America Act.”
The Move America Act would encourage private investment by allowing for up to $180 billion in infrastructure-focused tax-exempt bonds and $45 billion in infrastructure tax credits. Sen. Hoeven emphasized that the act is “all about empowering states and the private sector to do what they need to get done.”
In response to a depiction of the short-term funding extensions as “a band-aid on a skull fracture,” Sen. Wyden noted that “you cannot have big league economic growth with little league infrastructure.” He further emphasized the benefits of private sector infrastructure investment, stating that the public sector needs to tap into the enormous sums of money on the sidelines ready to be invested in America’s infrastructure.
BPC recently established an Executive Council on Infrastructure to recommend ways to meet the challenge of bringing more of that private capital in from the sidelines to invest in American infrastructure. The council, a working group of CEOs and senior executives from a variety of corporate sectors, will identify and recommend private-sector solutions to the barriers to private investment in infrastructure that exist today. The council will be working to elevate this issue among their colleagues, just as Sens. Wyden and Hoeven are working together to advance this important discussion among their colleagues in Congress.