The plan described here calls for a partnership between federal, state, and local governments. At least four circumstances warrant such a partnership. The infrastructure deficit has become a critical national problem. Federal mandates for a range of activities, from limiting pollution to caring for the poor, frequently strain the budgets of state and local governments and of their taxpayers. The provision of roads, schools, and much other public capital benefits all Americans.
State governments play a similar role within their own boundaries.
The principal of the loans would be repaid in annual installments. No mortgage would be for a period of more than 30 years, and the period of repayment would depend on the type of project. To protect the taxpayers' investment in these projects, the loans would have covenants requiring regular, effective maintenance. A payback period as short as 10 years would be inappropriate if most of the investments were in new bridges, highways, and other long-lived assets. However, Congress might well decide that the program should begin with the rehabilitation of existing infrastructure.