Friday, January 23, 2009

How to Improve the Stimulus Bill

There has been much discomfort in the transportation community about the amount of funding for transportation infrastructure in the stimulus, or economic recovery, bill reported out of the House Appropriations Committee a week ago Of course, we do not yet know what the final bill will contain for transportation or even the degree to which the House language is reflective of what the new President and his Administration desire, but this first significant legislative action on economic stimulus is an opportunity to remind ourselves of our goals and purposes.

I am not an economist, but it seems to me that the purpose of a stimulus bill is to stimulate the economy and, more specifically, to stimulate job creation. That is why there has been a focus on "shovel-ready" projects and why the House bill contained "use it or lose it" language. Nonetheless, as the Congressional Budget Office noted, there is some delay (often, fairly significant delays) before transportation authorizations are turned into outlays, that is, before they become money actually spent and invested in the economy. Indeed, even though every recent surface transportation authorization bill has been primarily justified on the basis of job creation, no one really knows how many jobs are created by transportation bills or how quickly. My limited exposure to this issue during my service at the U.S. Department of Transportation left me skeptical that there was very much authenticity in, or analytical rigor to, the estimates of "X number of jobs are created for $1 billion of spending" in this sector.

Nonetheless, while we may not know for certain how many jobs are created, or how quickly, by surface transportation spending, clearly these investments make fiscal sense in the current economic environment. With that in mind, let's continue to remember that job creation is the purpose of the transportation spending in this stimulus bill. The transportation sections of a stimulus bill are not designed to correct the serious shortfalls that we have had in infrastructure investment in this country for many years or to correct the fact that much of the surface transportation money that has been authorized by Congress in recent bills has not always been spent wisely.

Our goals should remain constant: however much money for transportation is contained in the final stimulus or economic recovery bill, those funds should be spent on "good" projects. That means projects that are likely to bring the greatest economic returns in the shortest time. Most often, these will be projects designed to restore transportation facilities and networks to states of good repair and to enhance the operational efficiency and productivity of existing systems.

Moreover, the principles of transparency, tracking, and accountability that are in the House stimulus bill should be retained in the final legislative language.

This discussion reminds us that we need significant long-term change in federal surface transportation programs. That is unlikely to happen in a stimulus bill, but we should be certain that the stimulus bill does not set this effort back. There was -- and, I suppose, there remains -- a risk that the attention on the total level of transportation funding in a stimulus bill would divert us from this purpose and would "swallow-up" the debate over national transportation goals and over the need to establish performance-driven and accountable surface transportation policies.

We need to articulate these national transportation goals, to redefine the federal role in transportation, to assure funding mechanisms that advance performance and accountability, to "get the prices right" in transportation (as the Eddington Report advocated for the U.K)., and to reform fundamentally federal surface transportation programs. These challenges will only be met in the surface transportation authorization bill yet before us, and these challenges will remain, no matter the level of transportation funding in the final stimulus bill.

-Emil Frankel

Wednesday, January 14, 2009

National Transportation Policy Project Reception at TRB Tonight

Dear Readers,

The Bipartisan Policy Center's National Transportation Policy Project is hosting a reception tonight, Wednesday, the 14th, as part of the Transportation Research Board Annual Meeting. The reception will be at the Omni Shoreham (by Woodley Park metro), in the Congressional Room, from 6-7:30pm. All are invited to attend.

The reception will feature two of NTPP's Co-Chairs, former Congressman Sherwood Boehlert and former Detroit Mayor Dennis Archer. Several members of the NTPP will be in attendance as well, including former FAA administrator Jane Garvey. Senator Mark Warner, a former NTPP Co-Chair, will also be stopping by early in the evening, and there may be a guest appearance by a former Senator...

Thanks for reading.

Monday, January 5, 2009

Congressman LaHood and the Department of Transportation

During his career in the U.S. House of Representatives Congressman LaHood had a reputation for approaching public problems with an open and pragmatic mind.  I am confident that this attitude will translate into a willingness to consider significant reform in the transportation sector during his leadership of U.S. Department of Transportation.  Many necessary changes can only come through legislative action, but DOT can undertake administrative and regulatory changes to promote greater linkages between transportation policy, economic growth and competitiveness, energy security, and climate change. Addressing these issues, which are deeply interwoven with transportation policy areas, is essential in developing a forward-looking federal vision – and DOT can play an important role in this task.

There are a number of steps DOT can begin today to reform the system. Perhaps the most dramatic might be a reorganization of DOT’s structure along functional, rather than modal, lines. The leading example of such a departmental restructuring comes from the United Kingdom. The goal is to better align priorities, objectives, and process while reducing inefficiency and providing incentives for success. A restructuring would help clarify and consolidate the grant-making agencies within the DOT (like merging the highway and transit agencies into one) and the more regulatory-oriented agencies that deal with goals like safety. Within the limits of existing statute, the new Secretary might consider a reorganization of DOT around national goals and purposes, such as transportation in metropolitan regions, major trade and goods movement corridors, and intercity passenger connectivity.  In addition, the new Secretary might undertake – again, within existing law – a consolidation of the Department’s regulatory activities that deal with goals like safety.

DOT can lead in other areas as well. In focusing on energy security and environmental goals, Cong. LaHood, as Secretary, should begin the process of further increases in CAFE standards for all classes of vehicles and should direct DOT’s operating agencies to develop guidance to state, local, and metropolitan agencies that will encourage genuine strategic transportation planning and linkages between transportation, economic growth, energy, and climate change at those levels. To improve operations DOT can take action to enhance the role and capacity of the Bureau of Transportation Statistics to collect data critical to insuring performance and accountability; without better data it is hard to develop accountability much less set goals. DOT can also move to put a greater emphasis on operating improvements and restoration of existing assets and, to the extent possible under existing law, using DOT programs and authority to allow state and local governments to utilize pricing in the management of systems. 

Even if all of these goals cannot be fully accomplished in the next few years, a DOT focused on opportunistically moving the ball forward when possible will help to ensure that critical long-term concerns are advanced.