Abolish the U.S. Department of Transportation

Urbanists everywhere are furious (and rightly so) at the Senate’s decision to slice mass-transit funding from the stimulus bill.  If nothing else, the federal government ought to help transit agencies keep their buses and trains running.  A recession is a bad time for service cuts. 

Ed Glaeser, a Harvard economist whose work I often cite, argues that capital spending on infrastructure is too important to leave to a stimulus bill, though.  Passing off capital expenditures as stimulus enabled Congress (again) to short-change cities:

President Obama is the first urbanite in the White House since Teddy Roosevelt. He certainly knows the vital role that cities play in America. Yet despite the Chicagoan on Pennsylvania Avenue, infrastructure spending in the House stimulus bill follows a business-as-usual pattern that discriminates against density. The only way to break that pattern is to take non-repair-related infrastructure spending out of the stimulus, and craft a separate bill that looks beyond the current recession. Major infrastructure projects, especially in cities, cannot be done quickly.

Per capita transportation spending in the House stimulus package, including transit, is more than 50 percent higher in the 10 least dense states than in the 10 densest states, including Massachusetts. Yet America’s highways and rails already make it easy to move goods and people across America’s open spaces. The hard slog is getting across dense downtowns. Other elements in the stimulus package also favor farm over city.

Glaeser ignores the core problem, though:  our federal system gives less-populated states too much influence over federal transportation spending.  Which means that out largest states — and thus our largest cities — have too little influence.    

This will never, ever change.  The only solution is to get the federal government out of the transportation business.  Abolish the U.S. Department of Transportation, except for the FAA and NTSB, and let metropolitan areas keep the transportation dollars they now send to Washington.

How could anyone who cares about cities oppose this? 

• Cities would no longer have to beg bureaucrats at FHWA or FTA for their fair share.  Cities could spend their money on the projects they believe would yield the highest returns.  Locals know their needs better than political appointees sitting in offices hundreds or thousands of miles away. Our transportation dollars would chase better projects.
• It makes no sense to redistribute transportation dollars from cities to the countryside.  Cities generate most economic activity.  City workers are more productive, on average, than rural workers.  Starving cities of infrastructure limits their growth, saps their vitality and encourages people to live in less productive areas.     
• A dollar spent on city infrastructure yields higher returns than a dollar spent on a rural road.  For example, a dollar spent maintaining South Lamar in Austin benefits tens of thousands of drivers a day; a dollar spent maintaining RR 967 in rural Hayes County, perhaps a few hundred.  This is because cities enjoy economies of scale — they do not have to double their road network when they double in size.  By redistributing money from cities to rural areas, the feds move money from more productive uses to less productive uses.
• Letting cities spend their own money would incentivize them to develop efficient infrastructure.  Under the current system, cities angle for highway dollars when the feds are handing out highway dollars; they angle for transit dollars when the feds are handing out transit dollars.  Since cities choose the projects that maximize their share of the federal dollars, they do not have an incentive to pick the most efficient mix.  Dense cities, for example, need less infrastructure per capita than less dense cities.  I don’t believe we should try to turn Houston into San Francisco; variety is important.  But cities ought to bear the full costs and benefits of their infrastructure investments. 
• Finally, DOT spends billions simply deciding how to spend its money.  Spending money to move money from more productive projects to less projects is just waste.  And then there are the billions of dollars spent by rent-seeking corporation whose profitabililty depends on DOT policy.

The United States Department of Transportation was created in the 1960s to coordinate development of the interstate highway system. Perhaps we needed a federal agency to do that. But the interstate has been built.  DOT now does more harm than good.

I realize I’ve ignored the enormous influence of state transportation departments.  Their influence is probably even more pernicious than DOT’s. (I’m not very fond of TxDOT, for example.)  But let’s take it one step at a time.