Chris Dodd is not seeking reelection, but he is not through with us just yet. If President Obama has his way, the senator’s legacy will include an expensive new entry on Washington’s list of handouts to organized labor.
Mr. Obama’s newest election year sop to the unemployed is a $50 billion scheme to fund public works projects with an infrastructure bank. Dodd laid the groundwork with legislation he introduced in August 2007, before the recession had started. S. 1926 called for a federally-run infrastructure bank, with a board of directors chosen by the president.  A June 2010 bridge collapse in the senator’s home state provided an opportunity to resurrect the idea:
The Bank will provide an immediate boost to our nation’s sagging infrastructure systems and potentially create thousands of jobs for out-of-work Americans, helping continue our country’s recovery from the recent economic crisis. 
An infrastructure bank is not a new concept, but it is gaining momentum. Dodd has been joined by Representative Rosa DeLauro, also of Connecticut, in pushing the plan. DeLauro sponsored her own infrastructure bank bill in 2009.
The president is unjustifiably enthusiastic about infrastructure spending, and his campaign trail promises are flying thick:
And by making these investments across the country, we won’t just make our economy run better over the long haul — we will create good, middle-class jobs right now. 
The bad news for those out of work is that this new palliative tied for last place on a Congressional Budget Office list of stimulus policies and their “bang for our buck” effect on employment.  While jobs will be created eventually, they will most certainly not be created right now:
Also, many public infrastructure projects, which require coordination among different levels of government, take a long time to implement. Such projects can be cost-effective in terms of the number of jobs generated per dollar of budgetary cost because they involve direct purchase of goods and hiring of workers, but only a small share of the full effect is likely to be felt in the first two years after a proposal becomes law. [5, emphasis added]
The problems with relying on infrastructure projects to create jobs are well known (see: Want To Work? Work For A Union.). The stimulus package committed $60 billion to infrastructure, but we saw a drop in construction employment in the September 2010 jobs report. Projects of the scale the president describes can take years to develop. The pace of development is so slow that by the end of 2009, we had only spent 10% of the stimulus package funds allocated for infrastructure. Throwing more money at these types of projects may slow things down even further. 
The president suggests that the “paid for” method of spending be applied to the infrastructure bank:
This plan will be fully paid for. It will not add to our deficit over time. And we are going to work with Congress to see to that. 
“Work with Congress” portends bad things. In the real world everything has a cost. Any reduction in the amount the Federal Government contributes to an infrastructure bank will have to come from somewhere else: states, localities and their taxpayers, or the private sector. 
The Council of Economic Advisors discussed an infrastructure bank in a December 2009 report that included a reference to the Davis-Bacon Act, a 1931 law that requires we pay prevailing wage rates to workers on public works projects:
Some members of the Board insist that all projects supported in any manner by the NIB should be subject to the Davis-Bacon Act in the construction phase, and subject to responsible employment standards and contracting procedures in the operations phase. Other members feel that such a requirement would prohibit developers from undertaking important projects and recommend omitting the requirement from the NIB guidelines. 
Representative DeLauro’s May 2009 infrastructure bank legislation contained a provision to ensure that the act comply with Davis-Bacon. The bill had 59 cosponsors, and was a hit with labor unions:
We strongly support Representative Rosa DeLauro’s efforts in introducing the “National Infrastructure Development Act of 2009”. Our two unions have worked with her office for a number of years in developing this additional financing mechanism through which badly needed infrastructure projects in transportation, water, energy and telecommunications could be funded. Given the 20% unemployment rate in the construction industry, Representative DeLauro’s infrastructure development bill is timely, and we will aggressively support it through passage into law. 
This is an ominous sign, given Democratic Washington’s record of using taxpayer money to guarantee union workers’ incomes (see: No Money To Pay Teachers, Police, Firefighters, and Nurses? Fire Them. and Special Interests: Are Obama’s Bigger?). The infrastructure bank scheme is not intended to create jobs now. It is designed to ensure a cash store to fund organized labor in a jobless tomorrow this administration is making inevitable.
Next: How the Davis-Bacon Act gives away your money.
1...National Infrastructure Bank Act of 2007. Senator Christopher J. Dodd and Senator Chuck Hagel. p. 2.
2...Chris Dodd. United States Senator for Connecticut. Dodd Renews Calls for National Infrastructure Bank. June 17, 2010.
3...The White House. Office of the Press Secretary. Remarks by the President on Rebuilding America’s Infrastructure. October 11, 2010.
4...Congressional Budget Office. Testimony. Statement of Douglas W. Elmendorf. Director. The Economic Outlook and Fiscal Policy Choices. September 28, 2010. p. 4.
5...Congressional Budget Office. Policies for Increasing Economic Growth and Employment in 2010 and 2011. January 2010. pp. 12-13.
7...Remarks by the President on Rebuilding America’s Infrastructure. October 11, 2010.
8...Congressional Budget Office. Issues and Options in Infrastructure Investment. May 2008. p. 2.
9...The President’s Economic Recovery Advisory Board. Infrastructure Investment and the Creation of a National Infrastructure Bank. December 4, 2009. p. 6.
10..Congresswoman Rosa L. DeLauro. National Infrastructure Development Bank Act of 2009. Infrastructure Bank Legislation Garners Strong Support. Quoting Ray Poupore, Executive Vice President, National Construction Alliance II. May 20, 2009.