Reforming the Nation's Transportation Agenda

For over a year now, calls have multiplied to give the surface transportation program a new sense of direction. With near unanimity, the transportation community, along with most congressional lawmakers and state and local officials, have concluded that the current program has lost its focus and lacks a clear mission and a guiding purpose. A bipartisan consensus has developed that perpetuating the status quo is not the answer. A clear break with the past is needed to restore the public's faith in the nation's transportation system. The federal program should not be simply "reauthorized" - it must be "reformed."

The Administration's new transportation plan, unveiled by Secretary Mary Peters on July 29, claims to do just that. "We propose to refocus, reform and renew our approach to the nation's highway and transit systems by completely overhauling the way U.S. transportation decisions and investments are made," declared Secretary Peters in announcing the initiative in Atlanta. The report is not a detailed legislative proposal with funding recommendations that an Administration would customarily submit to Congress on the eve of a congressional reauthorization of the federal-aid program. The U.S. DOT leadership must know full well that a specific legislative proposal submitted by an outgoing Administration would be "dead on arrival" in an (expected) Democratically-controlled 111^th Congress. Besides, it would not be good form to preempt the incoming Administration from putting its own stamp on the future legislation. Instead, we suspect, the DOT leadership's aim is to leave behind an intellectual legacy and to use the report as a vehicle for suggesting a different new mindset about how we should fund, finance, manage and operate surface transportation. 

Because the Administration's intent is to attract national attention to its proposal,  its report is directed at a broader audience than just the congressional authorizing committees. It appears  aimed at  the entire decisionmaking community that will be involved in setting the future transportation agenda in our decentralized federalist system. That includes, in addition to the Congress,  the Governors, the state legislatures, the local and state transportation establishment, the Beltway interest groups, the presidential transition team and the next Administration. When it comes to influencing this wider bipartisan audience, some observers think, Secretary Peters may have the upper hand. "In a contest between the forces of reform and the forces of the status quo the forces of reform will prevail because the next Administration, the congressional leadership and state-level policymakers of both parties will realize that the present federal approach to transportation is not working," one Washington source, usually critical of the Administration, observed. 

What does the new approach call for? Broadly speaking, it recommends, first, a more limited  federal role in surface transportation. The federal program should be refocused on a small number of areas that are truly of  national interest, notably preserving and improving the Interstate Highway System and maintaining its national connectivity. It should not be dissipated among a multitude of unrelated programs, special projects and thousands of earmarks, as has been the case in recent years. The federal government does not have the resources to solve all of the nation's transportation challenges, the report argues. "In keeping with our federalist system... we should deploy federal transportation resources in areas fundamentally in the federal interest, and empower States and localities to use their own resources to best meet State and local needs," says the report.   

Secondly, the report recommends a decreased reliance on the federal fuel tax - an "increasingly ineffective, unsustainable and unpopular source of revenue" in the words of the report. "By driving less and using more fuel-efficient vehicles, Americans are showing us that the Highways of tomorrow cannot be supported solely by the federal gas tax," Secretary Peters said in a July 28 statement announcing a decline in travel due to rising fuel prices. She also could have mentioned  strong public opposition to increasing fuel taxes at the state and federal level as another reason why the gas tax can no longer be relied upon as the sole source of transportation funding. The report recommends a wider use of tolling and congestion pricing, although it concedes that direct pricing of roads will not replace traditional fuel taxes as the primary mean of financing for a long time to come.

Thirdly, the new approach calls for giving Governors and state and local officials greater flexibility in using federal transportation funds. It argues for empowering the states to diversify their revenue sources  by removing the remaining federal barriers to tolling and by facilitating the states' use of public-private partnerships, private sector investment, private activity bonds, state infrastructure banks and other innovative financing techniques.

Fourth, the approach would put greater emphasis on reducing metropolitan congestion by creating a dedicated Metro Mobility (MM) Program for metropolitan areas with populations greater than 500,000. This MM Program would receive approximately one-third of any future federal funds.

Reaction to the Administration's proposal has been muted.  Aside from a predictable broadside from Rep. James L. Oberstar (D-MN), Chairman of the House Transportation and Infrastructure Committee, ("a collection of the same uninspired and uninspiring policies that this Administration has offered over the past five years..." ), news media have given the report a balanced coverage. The reaction from the transportation stakeholder groups and the various coalitions has been slow in coming, perhaps because they have not yet had the time to fully digest the 73-page report and formulate a position.

Some critics will reflexively reject the Administration's reform proposal as  too controversial and too radical a departure from the established order. Others will dismiss it as "a dead hand, reaching out from the past to affect the future," to use Rep. Oberstar's words. Still others will oppose the proposal because they will see it as threatening the insular interests of their constituencies. But most people, we think, both liberals and conservatives, will approach Sec. Peters' initiative  with an open mind. They will regard it as an honest and much needed attempt to reform the nation's "broken" approach to surface transportation --- the first attempt to restructure the program and adapt it to the changing needs and circumstances of the 21st century.