Reason Foundation finds plenty to dislike about Biden's infrastructure plan

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Baruch Feigenbaum is assistant director of transportation policy at the Reason Foundation, a significant player in the world of transportation policy. The foundation is sharply critical of President Joe Biden’s $2.3 trillion infrastructure grab bag of plans. Feigenbaum, in an email interview with the Washington Examiner, discussed the proposal, the vehicle miles traveled tax, and the future of transportation funding in early June. This is a lightly edited transcript of that conversation.

Washington Examiner: Granting that this is all analysis and not advocacy, the Reason Foundation recently came out swinging against President Biden’s infrastructure plan. The Reason Reader, which is sent out to supporters, had five articles picking it apart. Just how bad is this grab bag of proposals?

Baruch Feigenbaum: It’s bad for many reasons. First, it does away with the users pay/users benefit principle that has been the hallmark of transportation funding for 100 years. Second, it’s effectively stimulus spending at a time when the economy is growing. Eliminating the supplemental unemployment benefits would be more effective at helping the economy than this proposal. Third, it spends federal money on transportation modes such as mass transit, cycling, and walking that is clearly local and should be funded at the local level. Fourth, it ignores the real needs like rebuilding the interstate highway system, which was recommended by the National Academy of Sciences. Fifth, it ignores the fact that we have a surface transportation bill reauthorization (although the House Democratic proposal for that is awful as well).

Washington Examiner: What would it do for unions?

Feigenbaum: By strengthening project labor agreements, it effectively gives a leg up to union operators over nonunion operators.

Washington Examiner: There was a recent article by Real Clear Investigations saying that a majority of the jobs this funds would NOT go to unions. Do you have any thoughts about that?

Feigenbaum: The article has a point on where unions are strongest, but unions will still get one-third of the new jobs, which is a significant increase for them after years of losses under both Democratic and Republican presidents.

Washington Examiner: Reason’s latest “Surface Transportation Newsletter” opened by stating, “Some transportation groups remain optimistic about the $115 billion devoted to ‘roads and bridges’ in President Joe Biden’s $2.3 trillion American Jobs Plan (AJP), but I am reluctantly concluding that, given the proposal’s overall price tag and priorities, this is more of an anti-highways proposal than an increase in needed investment in America’s aging highways.” How is it that such a small percentage of an infrastructure package is devoted to the main thing that most people think about when they hear the term “infrastructure”?

Feigenbaum: It’s a good question. Democrats seem to be far more interested in social justice and the negative effects that highways have created than their far greater positive benefits. Expanding the use of the term “infrastructure” to mean almost anything is a good way for Democrats to fund other priorities like child care that are clearly not infrastructure and the general public has no appetite to fund with taxpayer dollars.

Washington Examiner: Is there anything good about what Biden is proposing?

Feigenbaum: By being so bad, it is unlikely to get adopted. A smaller, more targeted but still problematic package would have stood a better chance at getting enacted.

Washington Examiner: Reason are probably more responsible than any other institution for developing the idea of a vehicle miles traveled tax, which would use technology to charge people based on road usage. Is there anything in Biden’s proposal that would bring a VMT any closer to reality?

Feigenbaum: I don’t believe there is anything in his proposal, but there is a national mileage-based user fee (what industry calls a VMT tax) pilot that will test the concept in all 50 states in all surface transportation reauthorization proposals, so it is likely to happen regardless of the Biden proposal.

Washington Examiner: Given the 50-50 split in the Senate and the narrow Democratic majority in the House, is there an infrastructure bill that could be carved out of Biden’s proposals that could get bipartisan buy-in? What would definitely have to be pitched over the boards to get us there?

Feigenbaum: It would have to be more narrowly targeted to traditional infrastructure such as roads and dams. It would have to rely on a much smaller increase in the corporate tax cut and, ideally, user fees. But the longer this drags out, the less likely there is to be an infrastructure bill separate from the surface transportation reauthorization, and I would argue a reauthorization is the preferred approach.

Washington Examiner: How much would it realistically cost to rebuild America’s aging interstate system, and over what period?

Feigenbaum: More than a trillion dollars over 20 years. We have proposed toll financing and P3s [aka public-private partnerships] so that the folks using the interstates are the ones paying for it.

Washington Examiner: How much money could be raised for that if we opened the American road industry up to private investment?

Feigenbaum: Totally private is unlikely, but public-private partnerships could generate billions of dollars. One of the challenges is there is a prohibition on tolling interstate highways. Tolls are the main revenue source in P3s. So, there is less private sector interest. We should allow tolling on the interstates, refund the gas taxes paid to travel on the interstates, increase the private activity bond cap to $45 million or higher to provide equivalent tax treatment for the private sector, and we would see major interest.

Washington Examiner: What is one thing you wish Republicans better understood about infrastructure? Democrats? Voters in general?

Feigenbaum: Republicans: Mileage-based user fees and tolls are the future. We can have those without a gas tax and avoid double taxation, and we can solve the privacy concerns.

Democrats: User fees are important because transportation will never “win” funding if it has to compete against education and defense, so eliminating user pays is counterproductive. Voters value physical infrastructure, not whatever is defined as “infrastructure” at the moment

Voters in general: We primarily fund infrastructure through users’ pay and gas taxes. We’re studying new alternatives, and it is important to be open to all options.

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Original Author: Jeremy Lott

Original Location: Reason Foundation finds plenty to dislike about Biden’s infrastructure plan