Federico Peña: Four Ways to Spend Smarter on Infrastructure

A few days ago, we had the chance to talk transportation policy with Federico Peña, who served both as Secretary of Transportation and Secretary of Energy under Bill Clinton. Over the course of the conversation, Peña offered up a roster of smart and innovative thoughts on how we might maximize our national investment in infrastructure. We liked them and decided to pull them together as an ideas memo. Here, in his own words, is a plan from a man who was in charge of national transportation policy last time a Democrat was in office :

Over the last twenty years, we’ve spent hundreds of billions of dollars on infrastructure and seen no improvements. We still have 40,000 people dying each year on our roads. Traffic congestion is only getting worse. We’ve tried the path of building new infrastructure to relieve delays but have learned that whatever we build quickly gets overwhelmed with new traffic. So we have to do something different. Here are some ideas to consider:

• We need to use technology more directly as part of our investment in transportation infrastructure. There are cities now that are putting probes in their highways to detect the traffic flow and speeds. Imagine if you could get that information directly communicated to your cell phone or PDA. It could tell you that five miles ahead there’s a traffic jam and show you an alternate route. It would help prevent gridlock and would be far cheaper than expanding highways or building new ones. The University of Texas did a study in 2005 showing that we waste $78 billion each year on traffic congestion – that figure is probably near $100 billion by now. We need to sit down with the auto manufacturers, state and local officials, and the technology people–Google, Intel, Cisco, and so on–and ask how we can use new technologies and telecommunications capabilities to reduce congestion in a more cost effective manner than building new highways.

• Up to this point, we’ve essentially relied on block grant programs to fund infrastructure. The states contribute some quantity of money for a project and then get at least 90 percent of those dollars back from the federal government by way of a formula. We should move away that system. We need to start asking, “What performance are we getting from our infrastructure investments?” In assessing a project, we should consider, for example, the potential for traffic reduction in a metropolitan area or the economic impact in a rural community. We should look at efficiencies and the potential to reduce traffic fatalities, travel time, and pollution, among other benefits. There should be some performance standards put in place, as opposed to just returning money to states that was collected from the federal gas tax.

• We should create an independent non-partisan board to oversee our strategic investments in infrastructure. It would be tasked to identify transportation bottlenecks across the country. For example, in Colorado the junction of I-70 and I-25 is the most important intersection in the state. As a bottleneck, it could potentially affect Kansas, New Mexico, Wyoming, or Utah, all of which depend on one or the other of those interstates. You could go to almost any state in country and find similar bottlenecks. So this independent board would ask, “If we invest X amount of money in improving this bottleneck, what will the benefits be?” So we should look at transportation infrastructure and ask what clogs with can be unclogged. By funding projects on that basis, you depoliticize the project and avoid funding bridges to nowhere and other pork projects.

• We should consider shifting away from the federal gas tax and state gas taxes into a different form of revenue generation. Here in Colorado a new bill (patterned after one in Oregon) would have you pay a fee based on how many miles you drive your car or truck. The national truck companies already have a technology embedded in their vehicles that can tell you where they are, how many miles they’ve gone, average speeds, and so on. We could start that as an experimental program with trucks and then shift that into cars after a year or two. It would represent a whole new way of financing transportation infrastructure in the future, based on use.

The Infrastructurist thanks Secretary Peña for his time and insight.