Top White House economic adviser Christina Romer, at right, holds up yesterday's report. (Photo: WSJ)

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?

The prospects appear dim for now in the Senate, where a measure outlined yesterday by Majority Leader Harry Reid (D-NV) focused solely on keeping the highway trust fund afloat until the end of the year, but Senate environment committee chairman Barbara Boxer (D-CA) has suggested that more infrastructure spending could emerge as part of a second small-scale jobs plan.

House Speaker Nancy Pelosi (D-CA), for her part, indicated in a statement today that she was not prepared to abandon the transportation provisions of her chamber's jobs bill, which included $27.5 billion for highways and $8.4 billion for transit but no TIGER money.

"We will work to ensure that critical pieces of the [House jobs bill] are enacted into law – including investments in our roads, bridges, and public transit systems," Pelosi said.

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!

Photo by derang0.

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.

One
is that roads are overbuilt. Years of trying to fight congestion,
ineffectually, by building new capacity have generated a road network
that is far too large.

Another is that road congestion can
only be addressed through imposed rationing, and the most efficient way
of doing this rationing is through variable tolling. This, of course,
should raise a lot of new and desperately needed revenue.

The
third point is that just because transit can’t permanently reduce
congestion doesn’t mean that there aren’t good reasons to build
transit. Indeed, the authors of the above study conclude that it will
often make sense to do so.

What kinds of reasons? Well, just
because the road network is overbuilt doesn’t mean that all
transportation demand is adequately met. In many areas — particularly
in center cities and job concentrations — new capacity is needed, and
transit offers an effective way to move a lot of people through dense
areas.

Another reason is that in the busiest areas,
congestion tolls are likely to be fairly high, and transit can offer an
affordable alternative to driving to low- and middle-income travelers.

And
finally, transit can help address one of the key contributors to
transportation demand — poor land use. Transit networks offer a
framework around which denser, mixed-use neighborhoods can be built,
allowing more people to walk or bike to work or reduce their travel
needs. Infrastructure is expensive to build and maintain, and ideally
we’d like to grow in a more intensive way that reduces that needed
infrastructure for a given amount of land.

Urbanists ought to
trumpet these results. Drivers are more likely to accept congestion
tolls if it is made clear to them that such tolls are the only
way to reduce road congestion. And tolling will create both the demand
and the revenue for new transit capacity. The relationship between
capacity and congestion is one we’d all do well to understand.

Senate Finance Committee Chairman Max Baucus (D-MT) (Photo: Baucus ’08)

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.

Photo: CNN

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.

But the alignment of Boxer and Inhofe, as well as Sen. Max Baucus (D-MT) -- whose Finance Committee must agree on a revenue source for the next transportation bill -- in favor of a clean 18-month extension is enough to doom the House effort to pass a bill this year.

Boxer described the process as a "two-track effort," promising to work on a "transformational" long-term transportation bill during the 18-month extension period of the existing law.

Given Congress' full plate and Boxer's focus on climate change legislation, however, the chances of passing a broader six-year transportation bill before 2011 look slim right now.

Boxer closed the hearing by asserting that the lack of a revenue source for a new transportation bill, not the crowded congressional calendar, is driving her support for a "clean" 18-month extension.

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.

These blanks hint at the challenge chairman Oberstar and fellow committee members John Mica (R-FL), Pete DeFazio (D-OR), and John Duncan (R-TN) will have in getting their bill through the legislative process any time soon. Time is scarce; Congress already has some substantial legislative challenges on its hands, and it may have to address the looming shortfall in the Highway Trust Fund before the August recess.

Political capital is also wanting. With most legislative eyes on health care and the Waxman-Markey energy and climate bill, there may not be enough chits available to strike the necessary deals on this transportation bill.

This is especially true given the money issue. STAA, as written, simply does not address the fact that 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, and a major reason for the administration's requested 18-month delay for the bill.

With the economy still in recession, the federal deficit approaching $2 trillion, a $1 trillion or so health bill in the works, and GOP legislators going all out to attack the climate bill under consideration as representing a major new energy tax, this is not a convenient time to be discussing transportation tax increases. If the funding issue cannot be resolved, and there is every indication that neither the administration nor a number of high priority legislators are anxious to solve it, then the reauthorization bill will probably not pass.

All hope for this particular bill is not yet lost, but a number of very difficult questions will have to be answered to turn this blueprint into a bold new transportation law.

Rep. Mario Diaz-Balart (R-FL) (Photo: SW Broward GOP)

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.

By separating the need to fill the trust fund from a broader debate over transportation reform, it undercuts the efforts of Rep. John Mica (FL), Oberstar's GOP counterpart, to pass a long-term bill that would tackle the nation's persistent infrastructure funding problems.

Senate leaders already are tipping towards the Obama administration's side, aligning with Transportation Secretary Ray LaHood's call for an 18-month extension of existing law and questioning whether anything can be done other than filling up the highway account.

"I do not oppose on principle the effort to improve federal transportation programs, but we cannot allow debates over these reforms to prevent us from saving the highway trust fund in a timely matter," Patty Murray (D-WA) the Senate's transportation spending chairwoman, told LaHood yesterday.

(Photo: National Association of Water Cos.)

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.

Take South Carolina, for example. It's home to an infrastructure bank that accounted for 55 percent of the nation's state-level transportation loan guarantees in 2006, according to the National Governors Association (NGA).South Carolina's bank has its own board, separate from the state DOT, and cannot own or manage any aspect of a project that is seeking its funding help.

A similar restriction is included in DeLauro's national bill. But Oberstar's infrastructure bank, as an arm of the federal DOT, easily could be tied to the agency's internal culture and priorities.

Many state infrastructure banks also evaluate projects using specific criteria. Arizona ranks its proposed projects based on "financial considerations, economic benefits and safety" while allowing applicants to choose between "mobility" and "air quality and environmental impacts" for theit final standard, the NGA found in its study of the issue last year.

DeLauro's bill asks the national bank to evaluate proposed transportation projects based on six factors: job creation, emissions reduction, congestion reduction, "poverty and inequality reduction," the furtherance of urban smart growth, public health benefits, and the use of "smart tolling" methods such as congestion pricing.

For Oberstar, then, the devil may be in the details. Will his bill's infrastructure bank use criteria similar to the DeLauro plan or to those used at existing state-level banks? Will his bill require that project sponsors repay the government using direct revenue from the projects that get funds (i.e. tolls)?