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Leadership Initiative on Transportation Solvency

The U.S. highway trust fund is broke, unaccountable spending undermines long-term strategic priorities, and infrastructure is crumbling. Failure to reform the transportation system risks deepening U.S. dependence on oil, adding to climate change, and eroding economic competitiveness. Waiting to make real improvements only drives up future costs whereas responsible policies can improve transportation and reduce the national deficit today.

The Carnegie Endowment for International Peace has created a leadership initiative to develop a non-partisan solution funding a better transportation system in the United States. Former U.S. Senator Bill Bradley, former Pennsylvania Governor and Secretary for Homeland Security Tom Ridge, and former U.S. Comptroller General and now founder and CEO of the Comeback America Initiative David Walker led the initiative and recently released their landmark report, Road to Recovery: Transforming America's Transportation, detailing their recommendations for reforming and funding the federal transportation program

Resources
  The Basics on Transportation
  • Funds are raised through a combination of federal gasoline and excise taxes and then deposited into the Highway Trust Fund, which is used to maintain America's transportation infrastructure.
  • When Congress created the Interstate Highway System in 1956, it was meant to be self-sustaining.
  • The gas tax has remained unchanged since 1993 and at the same time transportation spending has continued to grow.
  • Today, there is an ever-widening gap between the amount of money flowing into the system and the amount being spent.
  • The Highway Trust Fund has to be bailed out year after year. Of the $78 billion spent annually on transportation, $25 billion comes out of the U.S. Treasury.
  The Problem with Transportation
  • Contributes to a fiscally unsustainable system: American transportation infrastructure is currently being paid for with borrowed money, further increasing our soaring national debt.
  • Maintains U.S. dependence on foreign oil: In 2010, the United States imported $323 billion of crude oil and petroleum byproducts. Americans have fewer incentives or alternatives to reduce gasoline consumption and thereby break our dependence on foreign oil.
  • Erodes America's economic competitiveness: As a share of GDP, Europe is investing twice as much in transportation and China is investing four times as much as the United States. Inadequate investment in transportation translates into higher costs for American business and slower, less reliable access to markets.
  • Delays repair of crumbling infrastructure: With funds in short supply, the United States must delay critical maintenance and improvements to America's roads, rails, and mass transit.
  • Exacerbates traffic congestion: America's transportation capacity simply isn't keeping pace with the growing number of travelers and trips, leading to increased wait times and lost productivity.
  OVERARCHING PRINCIPLES TO ADDRESS THE PROBLEM
  • Adopt a consolidate-and-invest mentality: There are currently 108 federal transportation programs, many of which are outdated or duplicative. Overlapping programs should be merged and those that are no longer relevant should be eliminated.
  • Increase accountability: More than 80 percent of transportation funds are currently distributed by formula, rather than need or performance. Accountability should be increased by establishing metrics to ensure projects are cost-effective, necessary, and promote long-term economic growth.
Traffic
  THE SOLUTION TO INCREASE REVENUE AND REFORM TRANSPORTATION
  • Ban transportation earmarks: Earmarks are not subject to standard planning requirements, nor are they required to show their benefits outweigh their costs. Transportation earmarks represent an inefficient use of limited public dollars and ought to be eliminated.
  • Establish a National Infrastructure Bank: A National Infrastructure Bank, led by an independent board of directors, should be founded and charged with ensuring transportation projects meet national, not just parochial, objectives.
  • Adopt an oil security and price stabilization fee: As the world oil price rises, an ad valorem tax would be applied to oil imports and oil production. When the world price of oil declines, the fee would apply instead to retail sales of gasoline. Such a fee would simultaneously raise needed revenue for transportation infrastructure and exert a countercyclical effect on prices at the pump.
  THE BENEFITS OF TRANSPORTATION REFORM
  • Decreases the deficit: Pricing transportation carbon would make the Highway Trust Fund solvent, end the unsustainable practice of funding transportation improvements with borrowed money, and reduce the annual deficit.
  • Reduces U.S. dependence on foreign oil: Pricing transportation carbon would incentivize Americans to consume less fossil fuel, thereby reducing our dependence on foreign oil and enhancing our national security.
  • Stabilizes price of gasoline: With a countercyclical price-at-the-pump system, consumers and businesses will benefit from a relatively stable gas pricing structure that allows them to better plan for and manage expenses.
  • Supports long-term economic growth: By facilitating the movement of people, goods, and services, transportation infrastructure is an investment in long-term growth that will help keep America competitive in the twenty-first century.
  • Rebuilds American infrastructure: With sufficient revenue, the U.S. would have adequate funds to be able to create jobs to repair or replace our rapidly deteriorating roads, rails, and bridges.
  • Increases traffic efficiency: A reliable source of revenue would enable investments in greater capacity and the deployment of smart technology, reducing traffic congestion and improving the daily lives of millions of Americans.
  • Reduces carbon emissions: Pricing transportation carbon would help speed the adoption of cleaner, more efficient vehicles and alternative fuels, thereby helping mitigate climate change.
Source: carnegieendowment.org/transportation

Road to Recovery

Bill Bradley, Tom Ridge, and David Walker detail a non-partisan and politically feasible solution to fix America’s crumbling transportation system that will stabilize gas prices, finance America’s transportation infrastructure, and decrease the deficit.

Resources

Related Analysis
Leadership Team
  • Bill Bradley
    The Honorable William W. Bradley
    Former U.S. Senator
    Senator Bill Bradley is a managing director of Allen & Company LLC. Bradley served in the U.S. Senate from 1979 – 1997, representing the state of New Jersey. He was a senior advisor and vice chairman of the International Council of JP Morgan & Co., Inc. from 1997–1999. During that time, he also worked as an essayist for CBS evening news and was a visiting professor at Stanford University, University of Notre Dame, and the University of Maryland. From 2001–2004, he acted as chief outside advisor to McKinsey & Company’s nonprofit practice.
    •  
  • Tom Ridge
    The Honorable Thomas J. Ridge
    Former Pennsylvania Governor and Homeland Security Secretary
    Tom Ridge is president and CEO of the international consulting firm Ridge Global, headquartered in Washington, DC. He served as the nation’s first secretary of the U.S. Department of Homeland Security from January 2003 through January 2005, and as the assistant to the president for Homeland Security from October 2001 through December 2002. Previously, he was governor of the Commonwealth of Pennsylvania from 1995 through October 2001 and a member of the U.S. House of Representatives from 1983 through 1995.
    •  
  • David Walker
    The Honorable David M. Walker
    Former U.S. Comptroller General and now founder and CEO of the Comeback America Initiative
    Dave Walker is founder and CEO of the Comeback America Initiative. He also served as the seventh Comptroller General of the United States and head of the U.S. Government Accountability Office for almost ten years. This was one of his three presidential appointments each by different presidents from both major political parties during his 15 years of total federal service.
    •  
Staff
  • David Burwell
    David Burwell
    Director, Energy and Climate Program
    David Burwell is director of the Energy and Climate Program at the Carnegie Endowment. His work focuses on the intersection between energy, transportation and climate issues, and policies and practice reforms to reduce global dependence on fossil fuels.
    •  
  • Shin-pei Tsay
    Director, Leadership Initiative on Transportation Solvency
    Shin-pei Tsay is the director of the Leadership Initiative on Transportation Solvency. Prior to joining the Carnegie Endowment, she served as deputy director of Transportation Alternatives, one of the leading non-profit advocacy organizations in the United States, where she provided strategic direction and overall management of the staff and organization.
    •  
Contact the Initiative

  • Carnegie welcomes your comments and feedback on the initiative Email project staff directly at

    transportation@ceip.org
 

Carnegie Resources

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