Where Did the Transportation Stimulus Money Go?

Once upon a time, Republicans hated President Obama’s stimulus package because it wasn’t pouring enough money into infrastructure. In July, in front of a giant road sign covered in red tape, GOP Representatives complained that only 1% of the package’s $48 billion for transportation had been spent. “As funds sit idle, so do workers,” said John Mica of Florida, the top Republican on the House Transportation and Infrastructure Committee. Jean Schmidt of Ohio hoisted a bright orange worker’s vest for the cameras: “I want to see this all over the highways!” Back then, even House minority leader John Boehner of Ohio was calling for “shovel-ready projects that will create much needed jobs.”

Not anymore. Obama’s new proposal to pour another $50 billion into “roads, railways and runways” has gotten no support whatsoever from Republicans. They’re now marching in lockstep against all stimulus spending; they say the government simply can’t create jobs, except through tax cuts. Of course, Obama has proposed new tax cuts as well, and Republicans aren’t backing those either. These days, they’d march in lockstep against apple pie if Obama served it.

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The President knows this, which is why his new plan should be understood mostly as a political gesture before the midterms, a way of reminding voters that he wants to do stuff and Republicans don’t. But it’s also an opening salvo in a looming battle over the future of transportation funding in the U.S. Which makes this a good time to ask: What’s going on with that first $48 billion?

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For starters, it’s not all sitting idle anymore. In the past 18 months, Obama’s Department of Transportation has committed $38.6 billion to more than 14,600 projects, and the vast majority of them are under way. About 70% of the money is going to highways; the rest is mostly for subways, buses, light rail and other transit projects, plus more than a billion dollars for Amtrak and a similar amount for airports. None of it is going to earmarked projects, and while the impact is not always obvious — most states chose not to erect signs touting the stimulus at construction sites — the work has directly supported an average of 45,800 jobs over the past year, and much more than that over Obama’s mocked “Recovery Summer.” Those jobs, the White House likes to point out, would all disappear if the GOP fulfilled its pledge to cancel the rest of the stimulus.

But the transportation stimulus funding hasn’t revived the construction industry, which still has a 17.3% unemployment rate. And while the pace has increased since a bad-weather winter, only $18.4 billion — a mere 35% of the total — has actually been spent. This is good news, in a way. It means that there should be more of those orange vests on the highway soon. And in fairness to the feds, once they commit money to projects, states have to do the actual spending. That said, at a Cabinet meeting this spring, I watched Vice President Joe Biden lecture Transportation Secretary Ray LaHood about moving money faster. “We’re all going to be held accountable, folks,” Biden said.

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It’s hard to get transportation projects up and running in a hurry; most of that cash really is going to the most shovel-ready projects. For example, LaHood’s highway department has committed every dime of its $26.6 billion, and only 9% is for new roads or bridges. Most of it is going to road resurfacing, safety upgrades and other off-the-shelf fix-it projects that require less preparation. Similarly, Amtrak has focused on replacing old railroad ties (47,713 through May) and bringing banged-up cars and locomotives back into service (36 so far). It may not be as exciting as New Deal projects like Skyline Drive, but repairing battered roads (which cause congestion, damage cars and reduce fuel efficiency) and improving public transit happen to be good public policy. It certainly beats building new sprawl roads and bridges to nowhere; the more-more-more approach to asphalt has only created more-more-more traffic, fuel costs and carbon emissions. “We’re spending money on stuff America needs,” says Roy Kienitz, DOT’s Under Secretary for Policy. “And there’s a lot more of that stuff out there.”

Fixing creaky infrastructure also helps reduce the national maintenance backlog and ease future deficits, while building new stuff increases the backlog and the deficits. And according to Smart Growth America, repair work generates 16% more jobs than new construction. That said, as I’ve written, the stimulus was not just about stimulus — even in transportation, the most visible effort to create visible jobs.

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Yes, most of the transportation money went to traditional programs that distribute the money to states according to congressional formulas, with a clear emphasis on short-term shovel-readiness. But there were also two game-changing programs, both handing out cash through competitive grants rather than everybody-wins formulas, both emphasizing long-term shovel-worthiness.

The first is fairly well-known, a controversial $8 billion effort to launch a new high-speed rail network like the ones that already zip passengers around Europe and Asia, our most ambitious transportation initiative since the interstate highways. The second is quite obscure: a $1.5 billion grant program for innovative projects that don’t fit into traditional highway-transit-airport silos. The so-called TIGER program doesn’t just hand out cash to every project with the proper paperwork; it rewards the applicants with the most impressive economic and environmental benefits, and it’s attracted $40 worth of applications for every dollar in grants. The winners have included several freight-rail projects that will take thousands of trucks off the road, a green-themed revitalization of a Kansas City neighborhood, and a multi-modal transportation center at the intersection of three interstates, a major rail corridor and a popular 26-mile bicycle and pedestrian pathway in Normal, Ill. “It’s forcing us to think about transportation with a capital T, instead of just checking boxes,” says John Porcari, DOT’s Deputy Secretary.

The last big transportation bill, which expired a year ago but has been extended through December, was not about transportation with a capital T. It was about formulas, money, politics and pork. It included more than 6,000 earmarks, and didn’t even include a statement of purpose. Obama’s new proposal is the first shot in next year’s battle over the next big transportation bill. And it’s an implicit argument for exchanging the policies of yore for the policies embedded in the stimulus.

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For one thing, it’s an argument for more stimulus; construction firms are increasingly worried that next year, public-work opportunities will fall off a cliff. But Obama was not just signaling that he wants to spend; he was signaling how he wants to spend. His plan, he said, would “rebuild 150,000 miles of road” and “restore 150 miles of runways.” He didn’t mention anything about building new roads or runways. The clear exception to fix-it-first was high-speed rail; he said he wants to “lay and maintain 4,000 miles of track.” He also proposed another legacy project, an effort to bring the satellite-based Next-Gen air-traffic-control system nationwide.

Most important, Obama wants to finance projects through an infrastructure bank. That’s a clear alternative to congressional earmarks and check-the-box formulas; the goal, quite novel in Washington, would be to fund public works according to merit, the way TIGER does. James Russell, a partner at a Washington advisory firm that helps businesses land government contracts, says the bank’s decisions could be vulnerable to political favoritism in a way money-for-everyone formulas are not. But it’s not as if the current transportation system is apolitical. “We’ve got to get past the wasteful earmarks and the outdated earmarks that just shovel money to states,” says David Goldberg of Transportation for America, a coalition seeking fewer highway-dominated funding policies.

The tough part, no matter what Congress does with transportation, will be paying for it. The stimulus was charged to the national credit card, but it’s just about maxed out. Meanwhile, we’re driving less, and our cars are using less gas, which is great, except that gas taxes finance most transportation projects; in recent years, the Treasury has bailed out the highway trust fund. Obama has ruled out any gas-tax increases, and if Republicans take back Congress, that would basically rule out any other tax increases. And nobody seems willing to detail any specific spending cuts. Where is any new cash going to come from?

The Obama Administration has some exciting ideas about a greener, smarter, safer, more balanced, less congested transportation system. They’re way better than the dumb (bipartisan!) ideas behind the hundreds of billions of dollars we pour into new cement every decade. But without money, they’ll just be ideas.

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