It’s an election year, so it must be time for some grandiose infrastructure proposals. Representative Peter DeFazio (D-OR), chair of the House Transportation and Infrastructure Committee, has come out with a $494 billion five‐year transportation proposal, which is a huge boost from Congress’ 2015 five‐year spending package of $305 billion. Congress writes a new highway & transit package about every five or six years; the 2015 one expires on September 30 of this year.
In response, the Trump administration is rumored to finally be coming out with his $1 trillion infrastructure plan. Candidate Trump famously promised to spend $1 trillion on infrastructure in 2016 in response to Hillary Clinton’s proposal to spend half a trillion on infrastructure. Campaign background documents clarified that he didn’t expect the federal government to spend $1 trillion but merely to give private investors incentives to spend that much money. Nothing much happened with that plan after he took office.
Now that the 2015 highway & transit package is about to expire, the Trump administration is planning to build its infrastructure plan around its renewal. On one hand, the administration wants to spend less money that DeFazio’s plan. On the other hand, it wants to reach the magic number of $1 trillion. To do both of these things, it will propose not a five‐year plan but a ten‐year plan that spends less each year than DeFazio’s plan but more in total.
Specifically, the draft Trump package would spend $810 billion on highways & transit over ten years. To round the total up to $1 trillion, another $190 billion is thrown in for rural broadband, 5G cell services, and other non‐transportation infrastructure.
Even $81 billion a year is far more than the federal government collects in highway user fees. When Congress created the Interstate Highway System in 1956 and dedicated federal gasoline taxes and other motor vehicle excise taxes to that system, Tennessee Senator Al Gore — the former vice-president’s father — insisted that it be on a pay‐as‐you‐go basis, in other words, that the highways would only be built as fast as the money came in for them.
Gas taxes are supposed to be user fees, but because we call it a tax, it got caught up in the pledges not to increase taxes many Congressional candidates made in the 1990s. As a result, the federal gas tax hasn’t been increased since 1993. Considering inflation and increased fuel economy, that means drivers are paying only about 40 percent as much today for every mile they drive as they did in 1993.
Instead of raising gas taxes, Congress increased deficit spending. In 1996, Congress abandoned Gore’s pay‐as‐you‐go rule and decreed that the federal government should spend as much money as was projected to come in, not how much it actually collected. This became important in the 2008 financial crisis, when gas tax and other highway revenues declined. Since then, Congress has supplemented those revenues with something like $140 billion in deficit spending.
The Trump plan would have less deficit spending than the DeFazio plan, but considerably more than the 2015 transportation bill. While the 2015 bill required about $100 billion in deficit spending over five years, considering that the pandemic is reducing highway revenues the Trump bill is likely to require about $400 billion over the first five years and more after that.
In 1991, Congress created a program called New Starts to fund up to 50 percent of the cost of light‐rail and other obsolete transit lines. By increasing traffic congestion and promoting high taxes and wasteful spending, this program has probably done more damage to American cities than any federal program since the urban renewal projects of the 1950s.
The DeFazio bill would increase the federal government’s share of New Starts money to 80 percent. More wisely, the Trump plan would cut this program altogether and spend money instead on rehabilitating existing rail lines. Since the transit industry has a $100 billion infrastructure backlog, rehabilitation makes more sense than building new lines, but in many cases it would be better to simply replace trains with buses when the rail lines wear out.
Although the Trump plan would end New Starts, one draft of the plan would create a brand‐new program promoting intercity passenger trains. Since they are just as obsolete as light rail, this would merely trade in one wasteful program for another.
None of these plans take into account the effect of the pandemic, which is likely to accelerate the decline in transit ridership and growth of auto driving. Transit ridership was already falling before the pandemic, and the pandemic reduced ridership for some transit agencies by more than 95 percent. Many of these riders will never go back to transit. Any infrastructure bill passed by Congress needs to account for these changes and the futility of trying to get people out of their cars when cars are the safest way to travel during an epidemic.
Trump’s promise of a $1 trillion infrastructure plan conflicted with his promise to “drain the swamp” or reduce federal bureaucracy. We don’t need a federal program for 5G cell networks; private industry will do that. We don’t need a federal program for rural broadband; having slower internet is one the trade‐offs people accept for living in rural areas. We don’t need to continue, much less expand, a federal program for the obsolete transit industry. Finally, we don’t need to use deficit spending to subsidize highways; highway users will pay for the roads they drive on if we ask them to, especially if they know the money they are paying isn’t be diverted to transit boondoggles.