Congress Plans a Transportation Overhaul

June 19, 2009

In the past several months, we’ve seen two different national commissions, advocates, think tanks, and civic leaders from metropolitan areas across the country call for a major overhaul of our nations transportation law. After all, America’s transportation policy has long been adrift with no clear goals, and no good tools to meet its myriad challenges. Individual states generally just receive a check from Congress (funded largely by gas-tax revenue), with no performance standards or accountability for how those billions are spent.

But at last, yesterday, the House Transportation and Infrastructure committee announced its plans to preserve, modernize, and expand the nation’s highway and transit systems—plans that begin the long process of reform. Jim Oberstar, who heads the transportation committee, has long promised to overhaul the way Washington invests in highway, safety, and transit funds. And, while a lot of legislative details have yet to be released, his proposal is a big step in the right direction.

Among other measures, Oberstar’s $450-billion proposal would restore federal leadership by consolidating or terminating 75 redundant or outdated programs (such as Seat Belt Incentive grants and the Pavement Marking Systems Demonstration Program). Another long-overdue change would be to better coordinate highway, transit, and railroad administrations through an “intermodal” office. At the moment, the United States is the only industrialized country that has not taken an integrated approach to transportation policy, linking up these different networks.

The proposal also recognizes the primacy of metropolitan areas and plans to focus investments in those places through a merit-based discretionary program, rather than just thinly spreading state-formula dollars around. It would also establish a “livability” office that would highlight the connections between transportation and issues like housing, climate change, and energy independence.

The big question will be how to fund this major overhaul. U.S. gas consumption has dropped to historically low levels, which means less gas-tax revenue, causing the federal checking account to run dry. There aren’t even enough funds to finance the existing $286-billion transportation program through the summer. A gas-tax increase of a few cents per gallon would be necessary to sustain current spending obligations.

That’s why the announcement made earlier this week by Transportation Secretary Ray LaHood was so intriguing. The administration is essentially seeking an 18-month authorization that will be paid for by an infusion of money from general revenues, rather than seeking a gas-tax increase. Details are still forthcoming, but the administration’s main goal appears to be to plug the immediate hole in the Highway Trust Fund, while providing some space to test out critical policy concepts, like using cost-benefit analysis “to make better investment decisions.”

The federal government can also use that time to assess two discretionary programs funded by the stimulus bill: the $8 billion in high-speed-rail grants and the $1.5 billion in capital investment grants. Both will rely heavily on a rigorous examination of the benefits and costs of proposed projects, with a focus on delivering results such as stimulating the economy, promoting environmental sustainability, and strengthening communities. That’s a far cry from how the federal program operates today.

Oberstar should be lauded for the notable improvements and advances in transparency and benchmarking and for this bold and aggressive plan. He and the committee’s ranking Republican, John Mica, are right to call for action and to eschew the kind of delay that has characterized every federal transportation law of the last 30 years. But at this time of fiscal uncertainty the nation needs a program that guarantees the highest returns on investment, measures what counts, and gets us what we pay for.