Politics & Policy

Rethinking American Transportation

U.S. transportation policy needs to be brought into the 21st century.

When surface-transportation policy was last significantly overhauled in the United States, in 1991, Americans who wanted to travel to an unfamiliar location used paper maps, usually purchased from a bookstore or gas station. If they were on a toll road, they stopped at the tollbooths and rolled down the window. They listened to an AM/FM radio, a cassette tape, or maybe, if they had a new car, a compact disc. The car of the future was equipped with a fax machine. The Internet, smart phones, and texting were essentially unknown. The Global Positioning System was incomplete, and its use was limited to the military.

Today, Americans use GPS apps that utilize crowdsourcing not only to help them navigate but also to alert them of hazards and reroute them to avoid congestion. They use radio transponders to pay as they drive through toll plazas without slowing down. And they might subscribe to satellite radio, use a predictive streaming service such as Pandora to listen to music, or subscribe to podcasts that cater to their specific tastes. Electric vehicles have moved from fringe to the forefront of automotive technology. There are even a few self-driving cars on the road.

And yet, despite all these innovations and advances, America’s transportation policy remains mired in the 20th century with road maps and cassettes. Every day, American travelers confront continuing traffic congestion, particularly in larger urban areas, and an aging infrastructure whose deterioration outpaces its repair. The causes of these problems, however, are not as obvious to drivers, including structural issues with transportation funding and financing (who pays and how much), the insufficient and outdated management system that oversees our patchwork road system, and the propagation of unnecessary transportation projects, including infamous bridges and roads to nowhere, which primarily serve special interests.

A central problem with American transportation policy is the federal government’s outsized role in matters of state and local transportation. Washington, D.C., should focus on ensuring safety, supporting research, preserving the intercity highway system, and supporting mobility for those with low incomes. To be effective and efficient, America’s transportation policy requires a new federalism that clearly defines the federal government’s necessary but limited functions and responsibilities. Further, our transportation policy should empower state and local governments to identify, address, and manage their own transportation needs.

One reform to pursue is to limit the federal government’s role in the 150,000-mile National Highway System, the network of long-distance arteries that allows travelers and freight to move between the states. Just as it was important to build the highway system, it is important to maintain and restore it so that it will be here for decades to come. Under current law, a substantial portion of the Highway Trust Fund goes to building new highways and transit systems, while the existing transportation links continue to deteriorate. Instead, federal policymakers should commit existing funding sources to maintaining the National Highway System.

Ensuring that the existing National Highway System remains functional offers a far greater return on investment than expanding it.

But why shouldn’t the federal government focus on expansion of the system? The short answer is it long ago picked the low-hanging fruit and built the best routes, around which we have built our existing communities. Ensuring that the existing National Highway System remains functional offers a far greater return on investment than expanding it with new routes serving land speculators or widening roads serving local traffic, at a time when new technologies such as self-driving cars are on the verge of significantly increasing roadway efficiency. Infrastructure maintenance is expensive, but it lasts for many years. It is important to make the wisest choices about where to spend scarce dollars.

In addition to narrowing the federal government’s role to preserving the existing network rather than expanding it, policymakers should empower localities to make their own choices about how to spend those maintenance dollars. Highway Block Grants would return funds collected in states and localities to those areas so they would have the freedom to make their own decisions about where to invest in the preservation and maintenance of the National Highway System. After all, policymakers in the states and localities better know the conditions and needs in their areas than do remote administrators in Washington.

Another strategy for bringing a new federalism to America’s transportation policy would be to empower individuals with choice. Policymakers should replace subsidies for the construction of expensive new mass-transit lines serving relatively few people with transportation vouchers for those who require aid most. Under such a system, lower-income Americans would receive accounts that they could spend on their daily transportation needs. By supporting low-income travelers directly, many of whom don’t actually use transit on a daily basis, this policy empowers them to spend on the type of travel that best serves their needs, be it paying for transit to get to work, renting a bike for a short trip, repairing a broken car to pick up the kids from Grandma’s, or riding in the occasional taxi for a job interview. Government cannot know what is in the best interest of each traveler every hour of every day.

States, localities, and the private sector would be allowed to invest as they saw fit in transit and highway projects that serve local, not national, needs without the distorting effects of federal transportation rules and requirements. To date, federal transit dollars have favored expensive, capital-intensive rail projects, while most transit passengers nationally continue to ride buses. States and localities would not have made the same distorted investment choices if there weren’t federal incentives paying for up to half the costs of transit lines and up to 90 percent of some new highways.

There are several proposals in Congress related to surface-transportation funding. Most of these call for essentially maintaining the status quo for the federal gas tax and general formulas for allocations of funds, while increasing spending with gimmicks and one-time revenue injections. This is what is currently on the table in the form of the Surface Transportation Reauthorization and Reform Act of 2015, and it is likely to pass. One disadvantage of this is that there is no certainty about how much money will be available when the next surface-transportation authorization comes up for funding, which makes longer-term decision-making more difficult for the states.

This method also further weakens the tie between users and the benefits they receive from roads. The daily shortage of road space, commonly referred to as congestion, arises because people perceive travel as costing less than its actual social cost. We do not pay for the delay we cause others; we all pay for the delay others cause us. Moving beyond this Soviet-style resource allocation is the most important thing we can do now to address congestion, far more than the few road-widening projects we could actually afford. Intelligently pricing roads, of course, is politically difficult.

Implementing a new federalism in transportation policy would improve transportation policy through innovation.

Senator Mike Lee (R., Utah) and Representative Tom Graves (R., Ga.) would largely phase out the federal gas tax in their Transportation Empowerment Act. While states already pay for most roads locally, and most travel is local, there remains an aspect of travel on the interstates that is truly an interstate matter. Accordingly, there are two risks from this legislation. First, states may underfund interstates, because out-of-state travelers don’t vote. Second, again because out-of-state travelers don’t vote, states may impose punitive tolls at their borders that are well in excess of the real costs of building, operating, and maintaining roads, as Delaware does on I-95. The national interest in preserving a national network of highways for both defense and commerce justifies keeping a federal user fee like the gas tax or some replacement for it and ensuring that, if there are user fees on interstate travel, they are neither too small, which would encourage excess travel, nor too large, which would discourage valuable interstate transit and trade.

In the 1990s, devolving power from the federal government to the states allowed them to serve as innovative incubators in social policy. Welfare reform is one such example, where federal policymakers empowered states with block grants. Instead of a one-size-fits-all federal policy, states were given greater flexibility to design their own programs.

Implementing a new federalism in transportation policy would improve transportation policy through innovation. To modernize our outdated system, policymakers should give states and localities the same flexibility they have in other successful decentralization efforts. In the laboratories of democracy, better transportation policies and investments may flourish.


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