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America’s transportation fund is bankrupt. Public transit is on life support. Can Biden save America from its Elvis-era transportation policy?
February 22, 2021
Right about now, Joe Biden is walking the old rooms of the White House like a weary landlord, eyes scrunched up like fists, surveying the “improvements” made by the last tenant. In one room, next to the pyramid of empty coke cans and the greasy Big Mac wrappers carpeting the floor, there’s a wall with a whiteboard that just says INFRASTRUCTURE WEEK. It’s written in permanent marker — but crossed out, and those crosses are themselves crossed out with scribbles. Around this impressive mess of ink is a big clumsy circle. Arrows spiral out from it, every which way.
In the coming weeks, Biden is expected to introduce the first infrastructure plan in years: the multi-trillion dollar Build Back Better Plan. It will be the “recovery” followup to Biden’s $1.9 trillion “rescue” stimulus, the American Rescue Plan.
The stakes for America’s transportation are high. The nation’s automobile traffic is endemic. Its high speed rail is laughable, its sidewalks broken, its bike infrastructure mostly theoretical, while its public transportation systems are stripped so bare you’ll often start to shiver or sweat before the next bus comes.
The sorry state of public transit isn’t the lone fault of the last administration — the death knell came back in the fifties, when President Eisenhower signed the 1956 Federal Aid Highway Act. It gave birth to the catchily-named “Dwight D. Eisenhower National System of Interstate and Defense Highways.” Now just known as the Interstate Highway System.
Modelled after the German autobahn (which had impressed Eisenhower during the war) the president’s plan rolled out nearly 50,000 miles of steaming asphalt across the fifty states — 90 percent of which was paid for by the federal government.
The Interstate Highway System was the biggest public works program ever carried out in the country. Back when a beer cost one quarter, a movie ticket cost two, Hitchcock had yet to film Vertigo, and the first TV episode of the Flinstones was years away from airing.
In 1958, just as the interstates were getting built, a sixteen-year-old boy from Delaware named Joe Biden would finally get his driver’s license. He likely got it the very day of his birthday. After all, such was to be expected from the son of a car dealer: his father worked on a car lot in Wilmington, selling GMs, Chevys, Fords, and Chryslers, depending on the year.
The initial outlay for Eisenhower’s 1956 Highway Act was $25 billion, but the eventual cost was $115 billion ($539 billion in today’s dollars). Construction and maintenance for Eisenhower’s highways would be funded by a federal gas tax. Every time a young Biden filled up, four cents on every gallon went to Eisenhower’s newly-minted Highway Trust Fund.
In 1982, President Reagan approved an increase to the federal gas tax (which fuelled the Highway Trust Fund) from four cents to nine cents. Importantly, 20% of the added tax (i.e. one cent) now went to public transportation projects. For years, federal funding for transit came mostly from that 20%. Highways got the remaining 80%.
Eisenhower’s transportation legacy is obvious: the Interstate Highway System became more than just a series of roads on a map. It etched itself into the American psyche — from the road trip movie, to the high speed chase, to the highway diner, to the omnipresent suburban commute.
Less sexily, Eisenhower’s vision for the Interstate Highway System helped obliterate public transit. The federal subsidy for interstates (combined with segregationist real estate policies) encouraged America’s increasingly suburban, car-centred way of life.
Left: Interstate propaganda, sponsored by Esso. Right: poster protesting highway construction in Washington, DC. (While Washington was spared, dozens of cities had their downtowns fatally bisected by highways.) Image source: ExxonMobil Corporation and DC Public Library
Public transit ridership, which peaked at 23.4 billion annual trips in 1946, went into a death spiral. More and more transit riders were lured into cars each year, which meant less revenue at the farebox, which meant worse service, which meant fewer riders, which meant less revenue, ad infinitum.
By 1972, American transit ridership had bottomed out at 6.5 billion annual trips. Before the pandemic, it’d recovered to 10 billion — still less than half the mid-century peak, despite the country’s population having since doubled.
The “20%” of the Highway Trust Fund earmarked for public transit was hardly enough to make up for the revenue lost. For one, most transit agencies were barred from using Highway Trust Fund money on operating expenses. Agencies could spend the money on new buses and trains, but they couldn’t use that money to improve service levels on their existing fleet.
In cities like Charlotte, a new light rail line was given $535 million in federal money (three times the agency’s annual operating budget) while the existing bus fleet was still being run at agonizingly infrequent intervals.
Even when federal money was available, it wasn’t available for the services that transit riders actually needed.
New light rail lines notwithstanding, most transit agencies were operating day-to-day service on ramen noodle budgets. Then the pandemic hit, and stuck. The outlook for agencies went from desperate, to dire, to bleak.
For many transit systems, cutting service looked like the only option. That posed a slight problem: it would strand the millions of essential workers (largely health care and food workers) who still depended on public transit.
Fortunately, agencies received enough federal aid through the CARES Act and other stimulus to survive the year without draconian service cuts. But what about next year? And the year after that?
If transit agencies are to survive the pandemic and rebound stronger than before — a few bandaid billions from the government won’t suffice. The government needs to rethink how transportation dollars are prioritized. It needs a permanent solution. And that solution cannot be the Highway Trust Fund.
For decades, the Highway Trust Fund has been on the brink of bankruptcy. It’s been bailed out by Congress multiple times.
It first happened in 1959. And it’s been happening more often: in the last twelve years, the world’s rottenest trust fund baby has received $154 billion from the Treasury’s general fund just to stay afloat.
Originally, Eisenhower set up the Highway Trust Fund as a piggy bank for federal gas taxes. But since that first bailout more than six decades ago, America’s sisyphean highway expansion campaign hasn’t been self-funded (by gas taxes paid by drivers) so much as it’s been subsidized by federal income taxes (paid by everyone).
Therein lies the issue. What entitles highways, in lieu of transit, to get 80% of transportation dollars? Drivers aren’t paying for highways. Yet federal money keeps coming to highways as if they did. Taxpayers (even those who don’t drive) are increasingly left to pick up the tab — plus gratuity: gridlock, pollution, and 38,000+ people killed by cars each year.
Eisenhower’s transportation legacy is the granddaddy of diseased gift horses. At least $115 billion was spent on in the Interstate Highway System, but now the American public is on the hook to pay that much for highways each year. Federal gas taxes haven’t been adjusted for inflation in decades. Meanwhile, the cost of building a mile of highway has exploded — growing three times faster than the median family income.
What do we get for all these monstrously expensive highway expansion projects?
Commutes only get worse.
The solution to America’s transit woes is simple: stop throwing good money after bad. Dissolve the Highway Trust Fund. Fund transit directly. And decouple federal funding from the absurd “20%” gas tax rule. Start spending federal money on running better, faster transit service that helps people get back to work and back to their lives — instead of on shiny projects that only look good for the ribbon-cutting ceremony.
Set up additional sources of revenue besides gas taxes: whether via tolls, carbon taxes, VMT fees, or other programs.
Then, invert the allocation formula for federal transportation dollars. That’s right: give 80% — not 20% — of all federal transportation funding to non-car-oriented projects.
This funding could be used to build better pedestrian and cycling infrastructure, to remove highways from inner-city neighbourhoods, to bring America’s digital mobility infrastructure into the twenty-first century, and most importantly, to run more buses and trains.
It sounds like a European fever dream. But that funding philosophy is now appearing in North America, with Québec planning to permanently invert transportation budgets, focusing on transit improvements instead of highway expansions. Nowadays, it’s not just Québec’s bagels that surpass New York’s. It’s their transportation vision, too.
A “Biden reset” of American transportation funding could catapult American public transit out of its decades-long decline. It could bring about the “second rail revolution” that President Biden stumped for during his campaign. Biden, who takes so many Amtraks from Wilmington to DC that they named the station after him, is the perfect president to champion transit as not just a second-string alternative to the automobile, but its nation-saving successor. His trusty sidekick, Secretary of Transportation Pete Buttigieg, has already begun challenging the idea that streets are for cars.
Together, the Biden administration can deliver on its promise of bringing high-quality public transportation to every American city, boost economic activity, and begin scaling back America’s biggest climate scourge. 🚘
Roads aren't just for vehicles—they are for people. pic.twitter.com/LuG0q2obIK— Secretary Pete Buttigieg (@SecretaryPete) February 8, 2021
Roads aren't just for vehicles—they are for people. pic.twitter.com/LuG0q2obIK
Transportation policy is about more than transportation. Transportation policy is the musical score that decides whether cities buzz with life or go deathly quiet. By unblinkingly accepting Eisenhower’s transportation legacy — and the philosophy that cities must serve cars — the American presidents that came after Eisenhower gave away their transportation agenda-setting powers to chase the tail of a ghost.
Today we are far removed from Eisenhower’s America. We no longer live in an America where 16-year-olds can pay for convertibles with their summer job money; we live in an America where families are saddled with debt, paying off seven-seater SUVs that are parked 95% of the time. Where many Americans spend as much time in traffic each year as they do on vacations. Where thousands of cyclists and pedestrians are killed each year by careless drivers and dangerous road design. Where more space in New York City is reserved for free parking (480 million square feet) than new apartments (36 million square feet per year).
It is up to the Biden administration, and his new Department of Transportation, to go beyond merely switching out gas-powered cars for quasi-autonomous Teslas. That isn’t radical progress. That’s interior design for highways. Biden’s DOT must go further, and challenge the flawed transportation funding assumptions we’ve used for decades. It must swap out the mothballed notion that “success” at the DOT is just more, bigger, smoother, faster roads for cars.
Eisenhower proved that federal transportation policy can change a nation.
Will Biden prove that federal transportation policy can change a nation for the better?
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