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Edge of the Road

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America's Transportation Bill is Still A Broken Road

October 19th 2009

Transportation Topics - Route66 500px

More than 50 years ago, President Dwight Eisenhower sought to build an interconnected national transportation network bigger than any region or state could possibly construct alone. Recognizing every legislator's desire to deliver funds to local projects, the Bureau of Public Roads shrewdly decided to bind scores of them together in a comprehensive illustrated guide to help sell Eisenhower's vision. Quickly, "The Yellow Book" found its way to the desks of the U.S. Congress, satisfying districts throughout the country while creating an interstate highway system that, according to President Bill Clinton, "did more to bring Americans together than any other law of this century."

Decades later, though, America's surface transportation system—like the funding and policy decisions behind it—desperately lacks any sort of national vision. More than a hundred disparate federal programs constitute a maze through which billions of dollars pass in and out of Washington each year, chaotically making their way back to America's cities and towns.

On its best days, the federal transportation system serves as the backbone of America's economy. On its worst days—and there have been plenty of those recently—the system pumps massive sums of money into disjointed, low-priority, and often ill-defined projects. But on October 1, 2009, the system ceased to do any of those things. Instead, it essentially went broke. Worse, the entire governing structure for the nation's transportation system expired. And rather than fix it, Congress is still fighting over how long to wait before acting.

What happens next is a mystery, even to seasoned pros on the Hill. But there is no shortage of opinions. In fact, there are at least 1,798 opinions. That's the number of transportation interests found in an examination of federal lobbying data. The special interests ranged from cities, counties, and planning agencies to universities, real estate companies, and construction firms. All told, they are spending tens of millions on at least 2,100 transportation lobbyists to help Congress make up its mind as it tries to craft a new transportation system and figure out how to pay for it. What emerges from Capitol Hill could be a more rational system. Or the cacophony could sharply worsen the ills already besetting America's aging transport infrastructure: more gridlock on major commutes, bridges and roads in greater disrepair, lack of mass transit, and more.

A Bit of History

Congress has tried repeatedly to modify transportation law since the 1956 Federal Highway Act established the interstate system. Here's how it works: to help manage the national transportation network—which gets funding at every level of government from Washington to state capitals to city halls—every few years Congress passes a gargantuan spending bill.

The current transportation bill, which was passed in 2005, became infamous for earmarks like the $223 million "Bridge to Nowhere." The bridge, which was never built, would have connected Ketchikan to Gravina Island in Alaska.

Over time, the bills have changed some. In 1991, for instance, Congress made air quality a priority in the bill and dramatically increased the money for mass transit; lawmakers also gave new responsibilities to localities, while providing more opportunity for public involvement in the selection of projects. The 1998 transportation bill provided money to ease commutes for low-income workers. But mostly what Congress did was keep folks happy and perpetuate the existing crazy-quilt system by adding new programs and earmarks that gave everyone more money: $155 billion in 1991 for a six-year bill; $218 billion in 1998 for another six-year measure; and $286 billion in 2005. The new measure could be nearly twice that amount—a half-trillion dollars.

"They sprinkle enough around to give everybody something to take home, and life goes on," said Anne Canby, twice a state transportation secretary and current president of the Surface Transportation Policy Partnership.

The current transportation authorization bill expired on October 1. This 835-page monster was originally signed into law by President Bush in August 2005 and took two years of political horse trading to get passed. Tucked inside the bill, as has become the tradition, were dozens of narrow programs—for rehabilitation of bridges, highway safety, rural transit services, and much, much more. The bill became infamous for its 6,371 overt earmarks. Among the pet projects: $10 million for a concrete pavement study center at Iowa State University, $12 million for a transit facility in Nashville, and, most notoriously, $223 million for the "Bridge to Nowhere."

Even a new program that sounded like reform in the last bill—Projects of National and Regional Significance—became riddled with earmarks, say critics. The concept was to fund some projects that were important to the whole nation. But a recent report by the Bipartisan Policy Center, a Washington think tank, found that although Congress wrote a rigorous approval process for these projects, its members then earmarked every last dollar.

For the nation's transportation experts, the bottom line was fairly depressing. Despite widespread agreement in Congress that new and hard decisions should be made on where the money would come from, who would spend it and where, the measure that emerged "was an updated version of the status quo," as one of its authors put it—a $286 billion grab bag that reflected special interests more than national interests.

Doling out the Money

Getting beyond the status quo this time around is no small challenge, in large measure because the process—if you can call it that—doesn't seem to have changed much.

The matter of how and from where the federal money is actually doled out is among the biggest headaches. The majority of federal dollars for these various transportation programs actually get distributed to state and local governments to be spent at their discretion. But that has caused problems. For one thing, wrote the Government Accountability Office last year, "Rigorous economic analysis does not generally drive the investment decisions of state and local governments." That was an understatement. Most (34 of 43) state transportation agencies surveyed by the GAO in 2004 called political support and public opinion "very important" when investing federal dollars. Only eight states attributed the same importance to cost-benefit analyses.

Georgia, for instance, divides up to 85 percent of its transportation dollars by congressional district, prompting public interest groups to argue that money is not spent in accordance with economic output or population share. In 2003 The Atlanta Journal-Constitution reported that over the previous four years, Georgia had spent more than 50 percent more per capita on areas outside metropolitan Atlanta than inside.

Much of the debate at the federal level during the previous two struggles to pass the transportation bill focused on equity between states, rather than maximizing performance. States that contribute more in federal gas tax receipts than they receive back from the transportation bill, known as "donor" states, feel slighted. In the last bill lawmakers settled on a 92 percent "minimum guarantee" return on investment. According to the Federal Highway Administration, neighboring states Minnesota and Iowa were projected to hit that 92 percent rate of return in 2009, while just next door South Dakota was projected to take home a 198 percent return. Alaska, meanwhile, was tops, clocking in at 527 percent.

The nature of the debate affects the nature of the transportation lobby. Hundreds of lobbyists ply their trade mostly in state capitals. But lots of interests who believe they're getting a raw deal at the statehouse try to get their projects funded directly by Washington—through earmarks, projects of supposed "national significance," or annual appropriations bills. To help them do that, many interest groups take advantage of Washington's revolving door. For instance, a railroad company can lobby congressmen earmarking a new federal program for freight rail projects. Former Democratic congressman William Lipinski, for instance, an alum of the House Transportation Committee, and Robert Hurley, former Republican staff director of the Senate Environment and Public Works Committee, both lobby on behalf of railroad companies. Such examples are far from unique.

And those arguments over equity among states play out in the nation's capital as well. For instance, at least eight state transportation departments and the Commonwealth of Pennsylvania pay their own Washington lobbyists to weigh in, separate from a national organization that lobbies on behalf of all 50 states. And other lobbyists in Washington are tussling over the overall distribution of the federal transportation cash, which in recent years has been about 80 percent for roads and 20 percent for mass transit. The process provides plenty of venues to make a pitch for transportation dollars, and Washington is often the final stop.

The result is rarely pretty. As in past years, the law emerging this time is at risk of being cobbled together from individual and too-often competing interests—states want one thing, cities another, highway backers want this, transit advocates that. Additionally, members of Congress submit their own projects based on knowledge of their own district. Very few projects are mandated as nationally important. Those that are often shouldn't be. The system, say those closest to it, isn't much of a system at all.

A Shortage of Cash

This time around, the situation is even more chaotic than usual. Last fall, as debate over a new bill began in earnest, something monumental happened that changed the game.

The money ran out.

The federal government pays its transportation bills through a mechanism known as the Highway Trust Fund, which raises roughly 90 percent of its revenue from the federal gas tax. The federal levy has not been adjusted since 1993. Lawmakers have known trouble was coming; overall spending out of the trust fund has topped revenue since 2002, and in September 2008, the fund ran dry. So Congress transferred $8 billion from the Treasury to plug the gap. It followed with yet another $7 billion transfer just before last month's recess. The Congressional Budget Office has estimated it will take another $100 billion between next year and 2018 just to cover projected expenses. Nobody is sure where to get it.

Over the last two years, two national commissions recommended increasing the federal gas tax over the short-term, and focusing long-term on a variety of user fees such as "congestion pricing" for vehicles traveling at peak times in crowded metropolitan areas. But that was before the economic collapse and trillion dollar deficits. Such revenue-raisers seem like political non-starters at the moment.

Meanwhile, some House lawmakers are continuing to talk about a multi-year transportation bill requiring some $500 billion. That's going to be a tough sell in the current economic environment, especially if the bill doesn't embrace fundamental reform of the system. "How can you justify a half-trillion dollars?" asked transportation expert Robert Puentes of the Brookings Institution. "You have to have justification."

Gridlock in Congress

Rep. Peter DeFazio (D-Ore.)But it's not just the matter of payment that is confounding Congress. There's the matter of substance as well.

One approach is being championed by Minnesota Democrat James Oberstar, chairman of the House Transportation and Infrastructure Committee, and the unchallenged power over transportation in that chamber. The proposed $500 billion, six-year bill that has recently emerged from one of his subcommittees is broad, sweeping, and expensive, with a pledge that it "redefines the federal role and restructures federal surface transportation policy." It would do that by creating a host of new offices at the U.S. Department of Transportation, while consolidating or terminating more than 75 programs. The committee also says the bill will make state and local governments "establish transportation plans with specific performance standards."

The Senate, which, on transportation issues, has concerned itself more with policy than projects, presents a far more complicated path. Jurisdiction is split among four committees: Environment and Public Works, Banking, Commerce, and Finance.

Right now, the two chambers are at loggerheads over how to proceed, and neither seems willing to budge. The Senate remains adamantly opposed to moving forward on a sweeping bill this fall, despite the late September expiration of the old law.

"Until I know how I can tell the American people we're going to pay for this major change and major need," said Senate Environment and Public Works chairwoman Barbara Boxer, a California Democrat, during a June committee hearing, "I'm not ready to find that solution."

While Oberstar spent much of the summer in a full-force PR campaign to push his $500 billion House bill, the Senate spent July doing nearly the opposite: Three Senate committees passed portions of an 18-month extension of current law—with support from the Obama administration, which obviously has its hands full with lots of other issues. But even an 18-month patch would require borrowing billions from general fund revenue to bolster the Highway Trust Fund.

And there the issue sits. Some transportation projects are going forward under the existing formulas as a result of the Obama administration's economic stimulus program, but many others will be in limbo without new transportation legislation. And this much is clear: New legislation had no chance of being passed before the old authorizing legislation expired October 1.

"It's hard to imagine that this isn't going to be anything other than a train wreck for a while," said one Democratic Senate staffer who works on transportation issues. "In the House, at least it's a single voice. … The Senate doesn't have anything close. The cacophony is amazing."

Hope for Reform?

Today, nearly every national actor in the transportation community echoes many of the same words: accountability, performance, and vision. All these voices recommend massive increases in spending, but caution that the public may balk at more outlays without substantive reform of a troubled system.

A pair of bipartisan commissions created by Congress, as well as think tanks and other independent reports, sound similar notes. They recommend paring down a federal system that now includes 108 transportation programs; suggest solutions that go beyond roads to other forms of transport; and stress repairs for aging infrastructure—a need highlighted by the Minneapolis I-35W bridge collapse two summers ago. Reports also direct attention to the need to integrate transportation fixes with issues like climate change, housing, and the economy. And perhaps most importantly, they stress the urgency of finding new financing mechanisms for transportation.

Taking those next steps, however, requires climbing some political mountains. Transportation policy experts hope that Congress might focus on setting broad goals and then move out of the way, but many lawmakers believe they should have the continuing power to choose specific projects. "The normal tendency of a legislator is to say, 'I've got this for you,'" said Canby of the Surface Transportation Policy Partnership.

Peter DeFazio, an Oregon Democrat and chair of the House Transportation Subcommittee on Highways and Transit, defends his prerogatives. "There is room for some designated spending by members of Congress who better understand the needs of their district," he said during a hearing in April.

No doubt others would disagree. There does, indeed, seem to be a growing consensus, that the current legislative system governing transportation is no way to run a railroad. Or any road, for that matter. But fixing it is another matter.

"I hope the political will is there," said Douglas Holtz-Eakin, former head of the Congressional Budget Office and chief economic policy advisor to presidential candidate John McCain, speaking on a panel this summer. "I have not seen it for the last 20 years or so in Congress."

Matthew Lewis is a staff writer at the Center for Public Integrity from where this article is adapted. For more investigations, see the Center for Public Integrity.


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