Remember Alaska’s infamous “bridge to nowhere,” the poster project for wasteful government spending? Well it might finally be headed into construction since most of the approval criteria for a federal loan program was eliminated as part of the transportation bill signed into law by President Obama last month.
The Transportation Department rejected a request last year for a $300 million loan to help pay for the Knik Arm Bridge in Anchorage, one of two projects in the northernmost state that were notoriously tagged almost seven years ago as the nation’s most egregious examples of pork barrel spending.
But with the new rules in place, backers are confident they will receive financing to get the causeway built. “The process is becoming more objective,” said Shannon McCarthy, spokeswoman for the Knik Arm Bridge and Toll Authority. “There’s a stronger focus on project readiness.”
With this new transportation bill, lobbyists and transit advocates say the Obama administration ceded much of its control over the rapidly expanding credit loan program—officially known as TIFIA or the Transportation Infrastructure Finance and Innovation Act—that has become central for restoring the country’s stressed network of roads, rails and bridges.
A project’s potential economic benefits are no longer among the standards for awarding loans and loan guarantees, which will now be decided primarily by creditworthiness. And applicants must now be considered on a first-come, first-served basis, instead of competing against each other for a pool of money that Congress has increased tenfold to $1.7 billion for the next two years.
The infrastructure loans approved under TIFIA will now be decided on a first-come, first-served basis with the sole criteria largely being the ability to repay the debt used to build the project. That component was previously carried a 12.5 percent weight in assessing projects.
|National and regional significance: livability, economic benefits, improved safety, and enhancing U.S. competitiveness||20%|
|Fosters a public-private partnership||20%|
|Protects the environment||20%|
|Share of TIFIA funding||5%|
|Minimizes the use of federal grants||5%|
Those changes elevate hopes that the bridge—which supporters say will enable more residential, commercial and industrial development—can clear a significant funding hurdle in Washington. The program was expanded as investing in infrastructure has become a crucial and contentious avenue for creating jobs.
Obama has highlighted infrastructure investment on the campaign trail as a way that government spending enables economic growth—sometimes to his own detriment as his comments have become fodder for negative ads and Republican talking points. “If you were successful, somebody along the line gave you some help,” Obama said last month. “Somebody helped to create this unbelievable system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen.”
The “you didn’t build that” line may have referred to the infrastructure needed for companies to thrive, but it quickly reverberated around the country as an assault on private enterprise that groups such as Karl Rove’s Super PAC American Crossroads have used to blast Obama.
Presumptive Republican presidential nominee Mitt Romney has criticized the 2009 stimulus package as worsening the deficit by paying for wasteful infrastructure projects—including the $150,000 restoration of a 19th Century “bridge to nowhere” in New Hampshire.
“He went out and borrowed $787 billion and said that if we're allowing him as Congress allowed him to borrow that kind of money, that he would hold unemployment below 8 percent, and it hasn't been below 8 percent since," Romney said while standing in front of the unused crossing in May. “That’s your stimulus dollars at work — a bridge that goes nowhere. And so I hope that the president comes here, and takes a look at some of the stimulus program, there’s a long list by the way.”