Streetsblog San Francisco

The White House Council of Economic Advisers' first annual report under President Obama made headlines today for its gloomy job-creation outlook, but tucked inside its 462 pages is a tangible reflection of a changed outlook on transportation policy under the new administration.

In a section entitled Rescuing the Economy From the Great Recession, for example, the president's economic aides name-check a series of "Responsible Policies to Spur Job Creation."

One of those policies -- which neither the House nor the Senate has chosen to add to their jobs bills this winter -- is an expansion of the stimulus law's merit-based TIGER grant program, which many transport reformers view as a step towards a leveling of the playing field between transit and roads. Here's the relevant section of the White House report:

The experience of the Recovery Act suggests that spending on infrastructure is an effective way to put people back to work while creating lasting investments that raise future productivity. For this reason, the Administration is supporting an additional investment of up to $50 billion in roads, bridges, airports, transit, rail, and water projects. Funneling some of these funds through programs such as the Transportation Investment Generating Economic Recovery (TIGER) program at the Department of Transportation, which is a competitive grant program, could offer a way to ensure that the projects with the highest returns receive top priority.

The economic report also touts the value of clean transport spending in its section on energy policies to aid adaptation to climate change.

"Investments in high-speed rail and public transit will increase energy efficiency by improving both access and reliability, thus making it possible for more people to switch to rail or public transit from autos or other less energy-efficient forms of transportation," the president's advisers wrote.

Will this White House support, however buried it might be, help persuade congressional leaders to add more transit and rail aid to any jobs bill that comes down the pike?

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Yesterday, Freakonomics linked to a new piece of research
[PDF] on congestion that I’d been musing over for a few days. Let me
quote the abstract here (paragraph break and emphasis mine):

We
investigate the relationship between interstate highways and highway
vehicle kilometers traveled (vkt) in us cities. We find that vkt
increases proportionately to highways and identify three important
sources for this extra vkt: an increase in driving by current
residents; an increase in transportation intensive production activity;
and an inflow of new residents.

The provision of public
transportation has no impact on vkt. We also estimate the aggregate
city level demand for vkt and find it to be very elastic. We
conclude that an increased provision of roads or public transit is
unlikely to relieve congestion and that the current provision of roads
exceeds the optimum given the absence of congestion pricing.

The
first inclination of most urbanists, when confronted with something
like this, is probably to bristle and conclude that the authors are
nuts. Transit can’t relieve congestion? What would happen to New York
or Washington if transit systems were shut down for a day? There would
be chaos!

There would indeed be chaos. But that doesn’t mean that the authors are wrong, and it’s important to understand why.

When
a transit system is built, two things happen to area roadways. Some
subset of drivers will find that commuting by transit is faster, or
cheaper, or more convenient (or all three) than driving and will switch
to transit. If that were where things ended, then transit construction
would indeed reduce congestion.

But there is a knock-on
effect. When drivers switch to transit, roads become less congested,
and driving therefore becomes more attractive. Drivers who were
previously commuting at off-peak times to avoid congestion will switch
to peak times, and drivers who were otherwise adapting to congestion by
working at home some days or taking longer, alternative routes will
adjust their behavior as well.

The end result will be … a
return to road congestion. This may not happen immediately. When new
capacity of any sort — roads or rails — is built, there may be a time
period during which traffic flows more freely, but ultimately
settlement and transportation patterns will adjust until roads are
again congested.

This happens because roads are under-priced
(and often free). If drivers don’t have to pay to use scarce road
space, and don’t have to pay to cover the cost of congestion their
driving imposes on others, then drivers will use the road until it is
congested. Because the government isn’t using price to ration demand
(as is done with most consumer goods), demand will rise until the cost
of lost time rations demand, and pushes drivers to take other routes or
modes.

I don’t think there’s any point in denying this. Instead, there are key points that urbanists should take to heart.

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The Senate took a major step forward last night in its battle
with the House over transportation funding, releasing a plan to give
$26.8 billion to the dwindling highway trust fund and — perhaps most
importantly, for the long term — to restore the fund’s ability to keep the interest it earns.

The
Senate plan, forged by Finance Committee Chairman Max Baucus (D-MT),
was endorsed by two of the chamber’s more progressive
transportation-minded members, Commerce Committee Chairman Jay
Rockefeller (D-WV) and Robert Menendez (D-NJ).

The legislation would send $22 billion to the highway trust
fund, slightly more than needed to keep it solvent until the Obama
administration’s proposed stopgap transportation law expires in 2011.

The
nation’s mass transit account, which is not facing the same imminent
insolvency as highway programs, nonetheless would receive $4.8 billion
under Baucus’ bill.

In a statement released last night, Menendez touted that investment in mass transit as a good omen:

This robust investment in mass
transit amounts to an investment in the foundation for 21^st Century
economic security. It is not only a sector that creates jobs, but it helps
lower energy costs, cleans the air we breathe and saves commuters time and
money. It is tremendously important to ensure that when we replenish the
transportation trust funds, transit gets its historical share, and this
legislation accomplishes that. This positions us to make significant
investments in transit projects in the forthcoming transportation
reauthorization bill.

Baucus’
bill is likely to clear the Senate by the end of the month, but the
House remains in a holding pattern. Transportation committee chairman
Jim Oberstar (D-MN) is still marshaling his colleagues in favor of a
new six-year transport bill before September 30, and while he may be open to agreement on a fix to keep the trust fund flush until then, a long-term rescue will be difficult to sell.

Interestingly,
however, the Senate’s decision to restore interest-accruing powers to
the trust fund represents a victory of sorts for Oberstar. The House
transport chairman contended in early June that rescuing the highway
program would be a matter of reversing the 1998 deal that blocked the trust fund from keeping the interest it earns.

Baucus’
bill also would restore the money that was taken from the trust fund
between 1989 and 2004 to pay for emergency spending bills, a move that
Oberstar might ordinarily endorse.

But the clash over
passing new transportation legislation this year has changed the
political calculus for Democrats, increasing the chances that the issue
won’t be resolved until after Labor Day.

Green transportation advocates are pressing Congress to refuse any new spending that's not tied to reform of the existing system -- a call that influential senators in both parties ruled out today.

Senate Environment and Public Works Committee Chairman Barbara Boxer (D-CA) joined Sen. Jim Inhofe (OK), the panel's ranking GOPer, in endorsing another 18 months of the 2005 transportation bill.

The extension, Boxer said, should be "clean as it can be, clean as a whistle ... not with these policy changes, because it will in fact jeopardize a quick passage of this extension."

Boxer's agreement to an extension free of policy reforms appears to be an acknowledgment that Inhofe and most other GOP senators would slow down approval of the short-term transportation measure. But she faced a lone critic today in Sen. George Voinovich (R-OH), who challenged Boxer to back down from her opposition to raising the federal gas tax during an economic recession.

"I will tell you that if you go out to the people of America and say [a gas tax hike] is the solution, they're not going to buy it," Boxer said.

Voinovich reminded the Californian that she "is always talking about the environment; [drafting a new transportation bill] is going to have a huge impact on greenhouse gas emissions." He suggested that senators "look at" the House transportation bill offered by Rep. Jim Oberstar (D-MN) and pitch the American public on an increase in the gas tax, which has remained static since 1993.

In fact, recent polling supports Voinovich's argument, not Boxer's. A survey released earlier this year by the advocacy group Building America's Future found that 81 percent of Americans would pay more in federal taxes to support infrastructure investments.

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We now have in our hands the 775-page Surface Transportation Authorization Act, which was released yesterday by James Oberstar (D-MN), chairman of the House transportation committee. It is, in many ways, a remarkable bill -- a blueprint for how transportation planning and infrastructure construction might undergo a significant shift away from the mindsets that have dominated for the past half-century. There is a lot to like in the bill.

Current spending levels, to say nothing of the increases proposed in the bill, will be impossible to sustain in the absence of a new source of revenue. This is a huge obstacle to passage.

As currently written, STAA would significantly strengthen the Office of Intermodalism and work toward making DOT planning "mode neutral" -- that is, not operating under the assumption that highways will always get first priority in planning and funding.

It would create an Office of Livability, focused entirely on seeking balance in mode choice by boosting transit ridership, bicycling, and walking. The bill seeks to streamline the process by which new transit projects apply for funding, and it allows federal officials to consider likely changes in land-use from transit construction in considering whether a project deserves funding.

STAA aims to empower metropolitan planning organizations. It seeks to depoliticize funding decisions and support private investment in infrastructure by creating national and metropolitan infrastructure development banks. It lays the groundwork for significant new investments in high-speed rail in America (though it cuts the definition of high-speed to 110 miles per hour or higher).

The bill includes a push to support "complete streets" and a national bike route network. It establishes increased transit ridership and reduced carbon emissions as explicit goals. And of course, the bill is targeted to allocate a lot more money than in previous reauthorizations, with a lot more money for transit (though transit's share increases only modestly).

But as my colleague Elana Schor noted yesterday, what's missing from the bill is as telling as what's included. The 775-page length may suggest excessive comprehensiveness, but in fact much of the bill is little more than placeholders. "[To be supplied]" is in ample supply, as is "[$]." Ideally, actual numbers would follow immediately after the dollar sign.

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As their committee's leaders butted heads with the Obama administration, a group of Republicans on the House transportation panel proposed to fill the $7 billion hole in the nation's highway trust fund with unobligated money from the economic stimulus law.

The bill, offered yesterday by Rep. Mario Diaz-Balart (R-FL) and eight co-sponsors, has almost zero chance of passing in the Democratic-controlled Congress. But its appearance suggests that lawmakers whose sympathies generally lie with Rep. Jim Oberstar (D-MN), the House's transportation chief -- who is determined to pass a new federal bill this year -- are likely to be diverted by the immediate task of filling the trust fund by August.

In his endorsement of the Diaz-Balart bill, Rep. Tim Johnson (R-IL) underscored the bipartisan appeal of Oberstar's quest for a new bill. Johnson lamented the business in his home district that would be lost if the Obama administration won its fight for a transportation funding patch:

As a member of the Transportation Committee as well as the Highway and Transit Subcommittee, I have been gearing up for the reauthorization for many months. Elected officials from throughout the District have spent time and energy preparing their plans and projects with me and my staff in anticipation of this important reauthorization. Now the administration is telling them to shelve it all.

The result of this ill-conceived decision will be the loss of jobs, critical infrastructure and economic development in [my] district and throughout the nation.

Let's forget for the moment that House Republicans voted against the stimulus en masse, which casts a dim light on their bid to take advantage of available economic recovery cash for highways. Here's why the Diaz-Balart proposal could have a significant political downside.

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The House transportation committee's new $450 billion bill provides for a national infrastructure bank intended to "maximize the limited resources available for our surface transportation needs," as the panel's early outline puts it.

This sounds a lot like the infrastructure bank proposed by Rep. Rosa DeLauro (D-CT) and 35 other House members -- indeed, Streetsblog Capitol Hill noted the similarity yesterday -- but in fact, Oberstar's proposal is likely to look different from his colleagues'.

Details on Oberstar's infrastructure bank plan are expected to be filled in after his legislation is officially introduced early next week, a Democratic committee source said yesterday. Yet the transportation panel's outline notes one crucial difference: Oberstar's infrastructure bank would be "located within" his proposed new DOT office of intermodalism, while the bank backed by DeLauro and Sen. Chris Dodd (D-CT) would be independent of the government.

Why is this significant? An independent bank, backed nonetheless by the full faith and credit of the U.S. Treasury, would be free to make funding decisions without being swayed by political ties or the ability to gain from managing any particular transportation project.

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