Politics & Policy

Marginal Impacts

High-speed rail symbolizes a stunning descent for federal transportation policy.

High-speed rail has emerged as the Obama administration’s signature transportation initiative. While advocates hail the project as a long-overdue commitment to the nation’s passenger-rail infrastructure, in reality it reflects a remarkable marginalization of the U.S. Department of Transportation (DOT) at a time when bold federal leadership is crucial. The administration has chosen to elevate an expensive program targeted at an extraordinarily narrow segment of the traveling public over programs that could provide meaningful relief to tens of millions of travelers on a daily basis.

The last twelve months have shown convincingly that transportation issues can’t compete with signature Obama initiatives such as health-care reform, climate-change measures, or economic-recovery plans, even as our annual infrastructure deficit balloons into the hundreds of billions of dollars. More than one year into the Obama administration’s tenure, federal transportation policy languishes, a stepchild to the American Recovery and Reinvestment Act and the victim of half-hearted attempts to promote mass transit as an alternative to the more nimble automobile.

Until January, the DOT served as little more than a spigot for federal dollars to fund a dubious jobs program. While the department justifiably bragged of its ability to get dollars out the door, many of these projects were low-priority — they had already been passed over by state transportation departments for higher-priority projects. No attempt was made to distinguish projects that might improve traffic speeds or reduce congestion from make-work curb replacements on local roads.

The administration’s high-speed-rail initiative is at least conceived as an actual transportation program with a goal of improving mobility between cities. But the plan’s stunningly narrow impact disqualifies it as a marquee program. Intercity rail currently accounts for less than 1 percent of all travel in the U.S. It will compete primarily with short-haul (less than 500 miles) air travel, but all air travel, including long-haul trips, accounts for just 10.8 percent of all travel in the U.S. Even if the project is a success, business travelers and well-heeled tourists will reap most of the benefits.

Meanwhile, despite the recession, the far more pervasive and economically debilitating problem of urban traffic congestion continues largely unabated. After brief retrenchment in 2008, congestion began to creep up again in the top 100 metropolitan areas in 2009. By 2030, the Reason Foundation estimates, 42 percent of the U.S. population will live in urban areas with severe congestion problems. Yet congestion barely registers on the national-policy radar screen, a holdover from the more aggressive leadership under former DOT secretaries Mary Peters and Norm Mineta.

Even if the DOT shifted gears to dramatically bolster urban mass transit, its chances of making a meaningful dent in traffic congestion outside of New York City and certain corridors in Chicago would be small. Mass transit accounts for just 1 percent of travel overall, and about 5 percent of commuting.

The Obama administration’s focus on narrowly targeted programs with a veneer of glitz and glam deflects policy discussion from trenchant challenges and game-changing reforms that could determine the course of the nation’s economic competitiveness. This is a potentially devastating outcome for the U.S. economy.

For example, the focus on intercity travel ignores festering problems that add significant costs to American businesses. Freight bottlenecks in Chicago disrupt the distribution of goods and services nationwide. Nearly $350 billion worth of goods travel by rail to, in, and from the Chicago region each year. By some estimates this activity accounts for nearly $5 billion of economic activity and $1 billion in output annually nationwide. Moving goods from the Port of Los Angeles to Chicago can take two days, but moving through Chicago can tack on two more.

Perhaps even more troubling is the Obama administration’s apparent unwillingness to tackle seriously our dysfunctional approach to funding the nation’s deteriorating infrastructure. Our nation needs to spend $170 billion per year more than we currently do simply to maintain the existing transportation infrastructure, and nearly $30 billion more than that to improve it. The gas tax, our principal means of financing our roads and bridges, is increasingly untenable: The inflation-adjusted value of the gas tax has fallen by one third since 1993. As hybrid and non-gasoline-powered vehicles take the road, the gas tax will become even less reliable.

Thousands of earmarks and outdated funding formulas have bred inefficiency, and two national commissions have outlined strategic blueprints for managing our way out. The DOT, however, is nowhere to be found in this debate or discussion. Indeed, the White House forced a time out so it could decide what it wants to do on its own schedule. The result is a “hold” on critical initiatives.

For example, the National Surface Transportation Infrastructure Financing Commission argued that drivers should pay a fee based on the distance they drive rather than the gas they consume. This would tie revenues to road use while creating a framework for moving our funding system to a more transparent user-pays approach. The technology is not quite off the shelf, but a national system could be implemented by 2020.

Local businesses in Chicago have partnered to identify specific regional projects that would resolve the freight-bottleneck issues. Major regional transit and road projects capable of being financed with private funds through public-private partnerships, leveraging scarce public resources, are languishing from uncertainty over federal rules and priorities.

Shepherding these initiatives and reforms through the process won’t be easy, and they are not quick fixes. They require knowledgeable and bold leadership. But they are crucial for putting U.S. transportation policy back on track.

After wallowing in political Never Never Land for more than a year, it’s time for federal transportation policy to move forward. Unfortunately, this won’t happen as long as the Obama administration continues to marginalize the DOT with low-impact projects that sidestep the major transportation challenges of the day.

The White House should cut transportation policy loose and let the DOT work with state departments of transportation and others with a vested interest in the transportation system’s success to identify challenges, prioritize policy responses, and develop proactive policy solutions to our nation’s challenges.

We can’t afford to let the DOT sit on the sidelines as Congress and the White House play out a tug of war over higher-profile issues and policy priorities while our national infrastructure languishes.

– Samuel R. Staley is Robert W. Galvin Fellow and Director of Urban & Land Use Policy at the Reason Foundation.

Samuel R. Staley — Mr. Staley is director of urban-growth and land-use policy at the Reason Foundation and teaches urban and regional economics at the University of Dayton.

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