PHILADELPHIA — Former President Bill Clinton strongly urged Washington Tuesday to pass a national infrastructure bank bill and encouraged state and local governments to embrace more public-private partnerships.

"I think every state and every city of any size in the country needs a public-private strategy to invest in infrastructure, Clinton said here at forum sponsored by the State Budget Crisis Task Force at the National Constitution Center. "We know what the benefits are."

Clinton was the keynote speaker at a forum that focused on challenges state and local governments face. He touched on four topics: Medicaid, infrastructure, pensions and Federalism. Other speakers at the event included Philadelphia Mayor Michael Nutter, former Lt. Governor of New York Richard Ravitch and Paul Volcker, former chairman of the board of governors of the Federal Reserve.

Last year the State Budget Crisis Task Force published a report citing major threats states face including underfunded pension plans and eroding tax bases.

The only way the U.S. economy can continue to modernize is to allow private investors to earn an acceptable rate of return and it can be lower if it's tax exempt, Clinton said.

"Without further action on the federal front, if they don't complicate things, we could revolutionize America if we could organize ourselves in every state or with every big city or with state and local partnerships to do this," Clinton said. "I do not believe there is any alternative to it."

Specifically, Clinton said the U.S. needs to do more to modernize transmission systems and the grid. He said there was "enormous opportunity" to make the electrical systems, especially in the Northeast and Midwest, more efficient.

"There are a multiplicity of usages for these infrastructure projects that combine public and private funds," Clinton said.

On pensions, Clinton said states have overdone the necessity of going to defined contribution as opposed to defined benefit plans and underemphasized the importance of just setting aside the money to fund it.

"If you want to economize, delay the age at which people can draw full benefits because of the increased life expectancy of people," he said.

Clinton said that states and local governments can't blame the federal government or other outside forces for underfunded pension plans. "Your numbers either add up or they don't," he said.

Several times throughout his speech Clinton said that when he was president he tried to maintain a constructive relationship with state and local governments. He said there needs to be a wave of bipartisan discussions about real types of reform at the state and local level.

Clinton urged the task force to recommend that every state review its budget system and adopt responsible policies that will "enable them to deal with the next crisis better."

"This is a time when we need creative cooperation," Clinton said. "We live in a time when the politics of constant conflict seem to be rewarded. It may be good politics, but it's a dead loser when it comes to getting things done."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.