Transportation advocates told budget writers in the House yesterday that private capital is available and should be harnessed.
"There's a lot of pent-up demand to invest in U.S. infrastructure," Tyler Duvall, a consultant and former assistant secretary of transportation policy at the Department of Transportation, said during a House Budget Committee hearing.
Duvall said the federal government is "capable of unleashing capital" to finance transportation needs and should "not lose sight of the opportunity to use federal credit" and leverage federal dollars to generate more funding for transportation beyond what the government can directly provide. If the federal government doesn't reform transportation policy to allow more private investment, there will be a "bubbling up" of state and local initiatives to do so, he predicted.
Duvall and others touted the Transportation Infrastructure Finance and Innovation Act program that provides low-interest credit to public and private entities.
Robert D. Atkinson, chairman of the National Surface Transportation Infrastructure Financing Commission, proposed wrapping the TIFIA program into a national infrastructure bank, such as the one proposed by the Obama administration in its fiscal 2010 budget summary.
In addition, Duvall called for changing the federal tax code to encourage private investment, citing the alternative minimum tax that was applied to private-activity bonds - a tax temporarily suspended for two years for all but housing bonds by the economic recovery act. Housing bonds were exempted from the AMT last year.
There is "hostility in the current code to private investment," Duvall said. If the rules are amended, "you'll see an explosion of interest," he said.
Meanwhile, Senate Majority Leader Harry Reid, D-Nev., said yesterday that private investors would be key to providing renewable energy.
"We should be catalyzing the work of private-sector innovators who are carrying the green revolution on their shoulders," Reid said during a floor speech praising President Obama's budget proposal. "In Pennsylvania, renewable energy has sparked more than $1 billion in private investment."
