Bond: Federal funds for state could ease economic woes

U.S. Sen. Kit Bond wants the federal government to set up a $50 billion fund to purchase bonds from state and local governments finding it difficult to borrow money.

In a visit with the Southeast Missourian that covered topics from the wars in Iraq and Afghanistan to education and the economy, Missouri's senior senator said making sure local and state governments have the money for construction can blunt the impact of an economic recession.

"You have got to put cash in the hands of cities and states that want to build things, because as soon as you do they are going to start building these projects," Bond said. "That is going to be a very badly needed stimulus to this economy where nobody can get credit."

Local governments and states have traditionally floated their bonds with major banking underwriters. Most pay interest that is tax-free to investors, making them attractive to purchasers and keeping interest rates lower for public entities than those charged to private businesses.

Bond said his discussions with Missouri state and local officials show that in many instances, the market for their debt has dried up or the interest rates are too high, forcing delays in projects. He pointed to sewer projects in Kansas City, bridge projects for the state and infrastructure projects in Columbia.

"I don't know what the infrastructure needs are in Cape, but I know the cities of Southeast Missouri have plans," Bond said.

Stimulus didn't work

While he defended his vote in favor of the $700 billion financial markets rescue plan, commonly referred to as the Wall Street bailout bill, he said another proposal to send checks out to taxpayers such as the $150 billion plan enacted early this year wouldn't have any lasting effect.

"We threw -- what was it, $150 billion? -- in stimulus that was paid out in one swell foop this spring. What did it do long term for the economy? Zero, zip, nada," Bond said.

He urged that federal investigations of potential wrongdoing in the financial markets be pressed. "My own personal view is there ought to be criminal prosecutions," Bond said.

On foreign policy, Bond said he is pleased that the U.S. and Iraq have worked out a tentative deal on keeping U.S. troops in Iraq beyond the end of the year when the United Nations mandate for the Iraq war expires.

He said the scene of major combat in the war on terror has shifted to Afghanistan, but in both instances it is the work to rebuild the countries, not just the combat efforts, that are helping bring stability.

The calming of relations between the Shia majority and the Sunni minority has been helped by demonstrations of respect by U.S. troops, such as aid in rebuilding the Blue Mosque, a major Sunni shrine, and crackdowns on Shia militias by Nouri Al-Maliki, the prime minister of Iraq and a Shia.

"Iraq is nowhere near a democracy but it has made a whole lot more progress than we have ever seen," Bond said.

Missouri Guardsmen

Missouri National Guardsmen have played a role in helping to rebuild the economy of Afghanistan, Bond said. The guardsmen, assigned to the country as military police, were part of a team that helped demonstrate modern agricultural techniques and reforestation in Nangarhar province.

"We know we've got a lot of farm boys in there, so the 25 guardsmen who were protecting were also farm experts," he said. "They were helping with meat handling, agronomy and forestry to re-establish the pomegranates to replace the poppy fields."

The U.S. cannot dictate the direction or the personnel of the governments in Iraq or Afghanistan, Bond said. A realistic policy must be followed but the line should be drawn at accepting high-level corruption, he added.

rkeller@semissourian.com

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