Democrats on the House Transportation and Infrastructure Committee are proposing to increase transportation spending from $305 billion over the last five years to $547 billion over the next five years. Although this is supposed to be a five‐year bill, it will really be a six‐year bill spending at least $656 billion, as Congress is never able to pass a major bill during an election year and will simply extend it a sixth year at the then‐current rate of spending.
Many megaprojects, such as Boston’s Big Dig and Dulles MetroRail (shown here) are built not because they are needed but because politicians can get the federal government to pay for them with “free” money. The proposed transportation bill will encourage more such megaprojects. Photo by Tom Saunders, Virginia Department of Transportation.
The proposed bill would increase spending on highways by 54 percent, double spending on transit, and triple spending on Amtrak. Although transit and Amtrak together carried 1.0 percent of passenger miles before the pandemic and less than 0.6 percent of passenger miles in the last year, the bill would give them 37 percent of the federal funds. Moreover, while federal funding of roads would be hampered by a “fix‐it‐first” rule, federal spending on transit would have no such limit even though transit infrastructure is in much worse shape than highway infrastructure.
As I frequently noted in a recent Cato policy analysis, before 2005 Congress restrained itself from spending more out of the Highway Trust Fund than it collected in highway user fees. Now that the gloves are off, Democrats think they can spend as much as they want.
Highway user fees deposited into the Highway Trust Fund totaled about $44.5 billion in 2019, so the existing law required $14.5 billion in deficit spending. Highway user fees in 2020 will probably be about three‐quarters of 2019, and are not likely to exceed 2019 levels until 2022 or 2023. Thus, the Democrats’ bill is likely to require around $65 billion in deficit spending per year. In other words, well over half the cost of the bill will be deficit spending, which will be more than four times as much as the previous bill.
As I noted in an op‐ed in last Saturday’s Orange County Register, funding infrastructure out of taxes or deficit spending rather than user fees is a bad idea for several reasons. First, infrastructure funded out of tax dollars or deficit spending tends to be in worse condition than infrastructure funded out of user fees. Second, it is socially unjust as most of the taxes to fund transportation infrastructure are regressive yet most of the users tend to have higher incomes.
Third, once infrastructure is funded by “free” federal money rather than hard‐earned user fees, transportation agencies start planning expensive bridges to nowhere and other megaprojects. For these and other reasons described in the op‐ed, Congress should reject bills that propose to spend more on transportation than can be collected in transportation user fees.
