(Bloomberg Opinion) -- Pete Buttigieg is now officially the most powerful Transportation secretary in American history, which is a big step down from his once and future aspiration to be president of the United States but an impressive achievement nonetheless. The question is whether he can use his power to serve both the country and his ambitions at the same time.
Buttigieg’s position was cemented by the passage of the Bipartisan Infrastructure Bill, which vests unprecedented discretionary authority in his department. Past surface transportation authorization bills, such as 2015’s FAST Act, mostly sent money to state transportation agencies through various fixed formulas. But under the law signed by President Joe Biden last week, about 20% of the total funding — some $25 billion a year for the next five years — goes to discretionary programs run out of the Department of Transportation.
There is a case to be made that all this discretion is bad practice. The rationale for the traditional formula-based approach is that it prevents federal transportation funding from becoming a patronage mill or some kind of slush fund. That said, America’s existing transportation funding system is broken, and has been for some time.
On highways, for example, most valuable routes have existed for a long time. The spending formulas don’t properly account for the fact that some states’ populations are growing much faster than others’, and in practice the money tends to go to whatever state elected officials think will make them look good. So that means less money for upkeep for existing roads and more for ribbon-cutting ceremonies for dubious new projects, such as a new $1.5 billion freeway interchange in a slow-growing Midwestern city. Buttigieg promises a “fix it first” approach to road funding, as experts have long recommended.
The question is: Will giving the transportation secretary so much discretion actually work?
America’s last experience with a significant discretionary transportation program, the TIGER grants program during the presidency of Barack Obama, generated a lot of spending on useless mixed-traffic streetcars.
Projects in Cincinnati, Kansas City and Washington superficially resemble trams found in many smaller European cities. But in a city such as, say, Strasbourg, France, the six-line tram system benefits from dedicated rights of way through much of its route, only sharing lanes with cars in less busy peripheral areas. The trams also enjoy priority at all traffic signals (the light turns green automatically when they are approaching), which gives them a speed advantage over conventional motor vehicles.
The American trains match the aesthetics of modern European trams but lack their functional attributes. They run in mixed traffic, so they can’t go any faster than a bus. (In fact they’re often slower than a bus, because they can’t go around a blockage in their lane.) Proponents say that riders like them better and they lack the “stigma” of buses. In practice, all three streetcar lines are so unpopular that they don’t even bother to charge fares.
The worst-case scenario for Buttigieg is that he greenlights more white elephant projects like those approved in the TIGER grant program. There is good reason to believe that won’t happen, however — and Buttigieg’s political ambitions are the key to understanding why.
Those streetcars were largely overseen by former Transportation Secretary Ray LaHood, who became a lobbyist after stepping down. Anthony Foxx, the mayor of Charlotte, was seen as a rising star in Democratic Party politics when he was tapped to be LaHood’s successor. But after the 2016 election, he also became a lobbyist.
Buttigieg appears to want bigger things for himself in politics. That’s the optimistic view of the discretion-heavy approach to transportation spending. To take what has historically been a nothing job and use it as a launch pad for his continued political ascent, he’s going to need something to show for all those billions in spending.
Take the law’s $66 billion investment in Amtrak, which is routed through a new Federal-State Partnership for Intercity Rail rather than going directly to Amtrak. How he handles this outlay will be a critical test of whether he deserves promotion.
The law earmarks about $24 billion for Amtrak’s Northeast Corridor, exactly the right place. By international standards, this should be enough to upgrade the whole Washington-to-Boston corridor to high-speed rail — but under Amtrak’s existing plans, most of it will go to the Gateway project, which is one tunnel under the Hudson River plus an expansion of Penn Station. Amtrak CEO William Flynn simply denies that the $5 billion per mile price tag for Gateway is all that much money. But it clearly is.
When discussing the plan in April, Biden himself rightly suggested that it should be enough money for both the new tunnel and significant speed upgrades. Buttigieg’s mission will be to actually make that happen.
As Alon Levy of Bloomberg’s CityLab and New York University’s Transportation Costs Project has written, Gateway suffers from both scope creep (incorporating Penn Station) and cost creep. For relevant comparisons, one doesn’t even need to look abroad — the East Side Access tunnel project currently under way in New York costs about $350 million per mile. The actual tunneling portion of the Second Avenue Subway (as opposed to the stations), memorably described in the New York Times as “The Most Expensive Mile of Subway Track on Earth,” cost only $240 million per mile.
To review: The Second Avenue Subway cost billions mostly because of oversized stations. Gateway has no stations at all but would cost orders of magnitude more. The reasons for these exploding costs are unclear but the outcome is depressingly familiar — lots of money for contractors and their employees.
Gateway is just one (admittedly important) tunnel. But similar dynamics influence almost every kind of infrastructure project in America. And while no single official can fix this broken system, Buttigieg is in a better position than any of his recent predecessors to accomplish something significant.
So far the infrastructure bill has existed largely as a prop in various political narratives — a hostage for House progressives, a sore point for right-wing Republicans, proof of Biden’s theory of bipartisanship. But it’s also a genuinely large sum of money — enough to be transformational for at least some aspects of American life. If Buttigieg can wield his authority effectively and deliver on that promise, it will give him a record of achievement to match the scale of his political ambitions.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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