A Call to Action

The surface transportation system of the United States is at a crossroads.  The future of our Nation’s well-being, vitality, and global economic leadership is at stake.  We must take significant, decisive action now to create and sustain the pre-eminent surface transportation system in the world.

The first half of our Nation’s history saw that economic development was directly tied to infrastructure development.  The creation of roads for vehicles and the transcontinental railroad led to trade and prosperity across the vast continent.  This in turn vaulted the Nation into a position of significance in the world.  The second half of our history has been dominated by the move from an agrarian society, through the Industrial Revolution, into a largely urban society and the world’s primary economic and military superpower.  All of this was facilitated by the foresight of private and public sector leaders who further developed the country’s infrastructure including the Interstate highway system, the Nation’s freight rail system, and urban mass transit.  Now we have outgrown this system and it is time for new leadership to step up with a vision for the next 50 years that will ensure U.S. prosperity and global preeminence for generations to come. 

The U.S. now has incredible economic potential and significant transportation needs.  We need to invest at least $225 billion annually from all sources for the next 50 years to upgrade our existing system to a state of good repair and create a more advanced surface transportation system to sustain and ensure strong economic growth for our families.  We are spending less than 40 percent of this amount today.

A significant increase in public funding is needed to keep America competitive.  Additional private investment in our system is also needed.  We will need to price for the use of our system.  More tolling will need to be implemented and new and innovative ways of funding our future system will need to be employed.  Maintenance and expansion of our freight system will require a set of policy tools that encourage more private investment and direct public funds toward projects which alleviate capacity constraints and allow for more traffic to flow across an efficient, sustainable, intermodal freight network.  Chokepoints at our major gateways and trade corridors don’t just represent congestion and environmental hot spots; they are a potential trade barrier as well.  Trucks and rail will have to work even more closely in the coming years in order to deliver the commerce the Nation produces, imports, and exports.

Our Nation will need to put more emphasis on transit and intercity passenger rail and make them a priority for our country.  A cultural shift will need to take place across America to encourage our citizens to take transit or passenger rail when the option is given.  It is also important to increase the market share for freight rail, and to make significant increases in highway investment as part of developing a robust surface transportation network.

In addition to putting more money into the system, we also must create a system where investment is subject to benefit-cost analysis and performance-based outcomes.  We need a system that ensures each project is designed, approved, and completed quickly; one that provides a fully integrated mobility system that is the best in the world; one that emphasizes modal balance and mobility options; one that dramatically reduces fatalities and injuries; one that is environmentally sensitive and safe; one that minimizes use of our scarce energy resources; one that erases wasteful delays; one that supports just-in-time delivery; and one that allows economic development and output more significant than ever seen before in history.

The good news is that we can do it.  Our people need such a system and they deserve it. 

We cannot sit back and wait for the next generation to address these ever-increasing needs.  The crisis is now and we have a responsibility and obligation to create a safer, more secure, and ever more productive system.  We need to create and sustain the pre-eminent surface transportation system in the world.  Now.

Introduction

“Our unity as a nation is sustained by free communication of thought and by easy transportation of people and goods... Together the unifying forces of our communication and transportation systems are dynamic elements in the very name we bear — United States. Without them, we would be a mere alliance of many separate parts.”

President Dwight D. Eisenhower, 1955

President Dwight D. Eisenhower had the foresight to understand how a system of Interstate highways would transform the Nation. If there was ever a time to take a similarly daring look at a broadened surface transportation network, it is now! The Nation faces challenges similar to those of the Eisenhower era. However, the imperative for change due to the global economy is even stronger.

Transportation is a critical engine of the Nation’s economy. Investments in the national transportation network over the Nation’s history, and especially the Interstate Highway System during the last half-century, have been instrumental in developing the world’s largest economy and most mobile society. Transportation is the thread that knits the country together, providing the mobility that is such an important part of overall quality of life and is so deeply embedded in our culture and history. Highways, transit, rail, and water systems provide unprecedented access to jobs, recreation, education, health care, and the many other activities that sustain and enrich the lives of American families.

By 2050, the total U.S. population is projected to reach 420 million, a 50 percent increase over
50 years. This growing society will demand higher levels of goods and services, and will rely on the transportation system to access them. In turn, this will cause travel to grow at an even greater rate than the population. As part of an increasingly integrated global economy, the U.S. will see greater pressures on its international gateways and domestic freight distribution network to deliver products and materials to where they are needed. The Nation is faced with a massive increase in passenger and freight travel.

The Nation’s surface transportation program has reached a crossroads. Will it continue to function as it has since the completion of the Interstate system, pursuing no discernible national interests other than the political imperatives of “donor State” rights and congressional earmarking? Or will it advance concerted actions to confront the transportation challenges facing the Nation that have reached crisis proportions—the deferred maintenance of its basic infrastructure; the burgeoning international trade and its impact on our road and rail networks; the traffic congestion that is crippling metropolitan America; the continued carnage on the Nation’s highways; and powering cars and trucks with fossil fuels, much of which is imported from foreign countries?

The Consequences of Inaction

Applying patches to our surface transportation system is no longer acceptable.  The Nation’s leaders must make a renewed commitment to serving the American people’s need for a system that ensures unparalleled mobility, access, and safety.  America must have the pre-eminent transportation system in the world.  The demand for more and better transportation resulting from a growing population within an increasingly global economy will continue to strain the U.S. surface transportation system.  We can predict, with some certainty, the consequences of failing to take bold action:

• The Nation’s transportation system assets will further deteriorate.   Too many of the Nation’s highways, bridges, and transit systems are already in disrepair.  Our transportation system is aging, requiring increasing investment just to maintain its current condition, much less improve it.

• “To save lives, we need funding and flexibility, we need partnerships and persistence, we need Federal, State, and local agencies to commit to the goal and continue their efforts. Anything less will prevent us from moving toward zero deaths.” – Kathy Swanson, Director, Office of Traffic Safety, Minnesota Department of Public Safety, at the Commission’s Minneapolis field hearing.

  Automobile casualties will increase, adding to the 3.3 million lives lost to traffic crashes in the last 100 years.  In 2006 alone, almost 43,000 people died on U.S. roads and almost 2.6 million were injured. If safety goals are not pursued more aggressively, far too many Americans will continue to lose their lives, their health, and their family stability in crashes that could be avoided.   
• Congestion will continue to affect every mode of surface transportation for ever-lengthening periods each day, as a result of the mismatch between demand and supply of limited capacity.  Congestion is not just a big city problem any more.  It is disrupting household and business activities from coast to coast, and exacting a large and expanding penalty on business productivity and the quality of life of American families. 
• Underinvestment in all modes will continue.  The Nation is underinvesting in all modes of transportation.  Unless the relative market share for other modes—including rail, bus, and water—grows, even significant increases in highway capacity cannot meet the scale of future projected demand.

• “Many municipalities have…shipping at night, commuting, having trucks and trailers and containers move up and down the system during non-peak hours. But in many cases…non-peak hours almost don't exist any more.” – Jerry Tidwell, Senior Vice President, Supply Operations, Safeway Corporation, at the Commission’s Los Angeles field hearing.

  America’s economic leadership in the world will be jeopardized when we cannot reliably and efficiently move our goods.  The declining performance of the surface transportation network—as a result of both inadequate capacity and inefficient management—will choke economic progress, preventing the U.S. economy from growing to its full potential.  It is not an overstatement to say that the Nation’s potential for the creation of wealth will depend in great part on the success of its freight efficiency.  Without changes, countries such as China and India, with more dynamic policies for transportation and economic growth, will challenge the U.S. in economic power and world influence.
• Excessive delays in making investments will continue to waste public and private funds. Federal funds are currently distributed to State and local transportation agencies along with many “procedural strings” that lead to excessive delays. Particularly for larger projects, the complex process of planning, evaluating environmental impacts, and arranging project funding can take as long as 15 years—an unacceptably long time in the face of immediate and growing transportation problems and in contrast to the ever-shortening cycle of private sector and entrepreneurial decision making.  These delays lead to unnecessary cost increases that waste taxpayer funds.  The same is true for the construction and expansion of private sector transportation facilities, such as rail lines and intermodal terminals, when such facilities require public approval.
• Transportation policies will remain in conflict with other national policy goals.  Despite good intentions, the Nation’s government programs don’t always fit together very neatly.  Current transportation and land use policies are not well coordinated.  This, in turn, undermines national security, energy, and environmental goals by contributing to greater reliance on foreign petroleum, higher greenhouse gas emissions, and adverse public health impacts.   
• Transportation financing will continue to be politicized.  The political process is important in ensuring that the needs of various constituencies are met.  In recent years, for example, that process helped to greatly increase the overall Federal investment in highways and transit.  Sometimes, however, politics can get in the way of good decision making.  Congressional earmarking has increased from 10 projects in 1982 to more than 6,300 projects in SAFETEA-LU (2005).  In addition, the lack of transparent analyses of costs and benefits of alternative investments makes achieving the best portfolio of investments unlikely.  The American public will have little confidence in infrastructure investment decisions that are the result of highly politicized public and private sector deals. 

Future Surface Transportation Investment Requirements

At the public hearings and in other testimony, perhaps the most common theme the Commission heard was the large investment required in all modes to maintain the condition of the Nation’s existing infrastructure, relieve congestion, and improve essential services.  Recognizing the uncertainties in how transportation services might be improved, especially 30 and 50 years in the future, the Commission developed a range of potential investment requirements based on differing assumptions.  Among the assumptions were (1) the extent to which operational strategies are deployed; (2) the extent to which State and local agencies use pricing to relieve congestion; (3) the extent to which advanced technologies such as Vehicle Infrastructure Integration (VII) are implemented; (4) the extent of physical capacity expansion pursued; and (5) the level of performance wanted from the system. 

The table below summarizes ranges of potential investment levels for different modes for the time periods 2005 to 2020, 2020 to 2035, and 2035 to 2055.  See Chapter 4 of Volume II for a complete discussion of these analyses and findings.

PRWG Proposed 2050 Intercity Passenger Rail Network

This table shows the range of potential annual investment levels in highways, transit, freight rail and passenger rail and the equivalent fuel tax increase that would be required to fill the gap between current sustainable investment levels and the high investment levels shown in the table. Each range represents average annual amounts from the current year through the date shown. Source: Commission Staff analysis.

The “High Capital Investment” levels shown in the table represent the amount of funding estimated to be adequate to improve key condition and performance measures for each mode in the future relative to their current levels.  Where available data and analytical tools permitted a more refined analysis, investment levels were set at the maximum level for which potentially cost-beneficial investments could be identified.  These provisional estimates were developed to support an informed discussion of alternative financing options, but ultimately would be supplanted by the amounts generated by the capital investment plans the Commission is recommending, which would be based on a more rigorous analysis for all components of the transportation system. 

For highways and, to a lesser degree, transit, the staff was able to modify existing analytical tools to develop independent estimates of future investment requirements.  For other modes such as freight and passenger rail, for which the available data and analytical tools were insufficient to conduct such analyses, the Commission reached out to industry experts to develop estimates. 

Expressing investment requirements in terms of cents per gallon of fuel tax should not be construed to mean that the Commission believes the fuel tax should necessarily be the only source for all surface transportation funding.  A number of State and local transportation agencies have been using other sources of funds because voters have been unwilling to approve fuel tax increases.  Among those other funding sources are tolls, sales taxes, property taxes, and private sector financing.

A New Beginning

The Commission believes that it is critical to America’s future to:

Create and sustain the preeminent surface transportation system in the world.   
This new transportation vision is fundamental to any significant effort to identify and rectify the shortcomings of the current national surface transportation system.  Achieving this vision is within the means of the wealthiest country on Earth assuming leaders at all levels of government and the private sector will take ownership and act on it accordingly and expeditiously.  The American people can no longer tolerate more “business as usual” in the surface transportation arena. 

The Commission’s vision is rooted in an understanding of the longstanding and increasing importance of transportation to the Nation in a global economy.  Our families and firms can no longer tolerate excessive transportation constraints that waste our collective resources—time, money, fuel, clean air, and our competitive edge.  Concern for the system goes beyond the tangible pieces of infrastructure that can be plotted on a map.  Although that engineering perspective was effective in the early days of building our rail, highway, transit, and port systems, it focuses on only the infrastructure side of a complex and sophisticated network essential to moving people and goods reliably and efficiently.  By updating our focus to include the performance that this system provides, we can identify current and future failures that will come, for example, with insufficient capacity, inadequate intermodal linkages, and poor system operation. 

The Commission believes the National Interest in quality transportation is best served when:

• FACILITIES ARE WELL MAINTAINED.  The infrastructure that serves as the backbone of national surface transportation systems is in at least good condition—Federal-aid highways (including the Eisenhower System of Interstate and Defense Highways and the National Highway System), transit assets, intercity passenger and freight rail lines, and network connectors between our modes that complete the overall system.  
• MOBILITY WITHIN AND BETWEEN METROPOLITAN AREAS IS RELIABLE.  Chokepoints that consistently impede national and regional movements of people and goods across the current passenger and freight systems are eliminated.  Highway, transit, and rail systems are expanded and managed to meet future growth.
• TRANSPORTATION SYSTEMS ARE APPROPRIATELY PRICED.  To avoid imbalances between the transportation capacity available at any particular time and the demand for it, pricing can help provide a guide for the most efficient use of scarce investment dollars.

• The Nation’s surface transportation network is part of a broader network that also includes aviation.  Although beyond the scope of this study, the interaction between surface and air has not been ignored.  Airborne freight ultimately makes its way to trucks.  With 517 primary and non-primary commercial airports across the United States, connections between airports and surface transportation modes such as highways and transit are critical for moving millions of passengers.  In places like the Northeastern United States, intercity passenger rail is an option for people who do not want to use regional air transportation.

  MODES ARE REBALANCED AND TRAVEL OPTIONS ARE PLENTIFUL.  Passengers and shippers should have options to travel within and between regions by road, rail, and water, helping to reduce congestion and accommodating future growth on the highways and in the air.  Public transportation and intercity passenger rail will play a significantly larger role in Americans’ mobility; Federal, State, and local transportation policies should not only accommodate, but encourage its development.  Shares of these modes will grow as part of a robust surface transportation system that includes increased investment in highways, transit, and intercity passenger and freight rail infrastructure capacity.
• FREIGHT MOVEMENT IS EXPLICITLY VALUED.  Operation of private and public sector freight systems (including rail, trucking, waterways, and ports) that fully serve the needs of the Nation’s economy is a priority. 
• SAFETY IS ASSURED.  Users of our surface transportation systems must not be at risk of death or injury due to unsafe facilities or operations.
• TRANSPORTATION DECISIONS AND RESOURCE IMPACTS ARE INTEGRATED.  The Nation’s population is expected to swell to 420 million residents by 2050.  Given the immensity of this increase, it is essential that the surface transportation system be transitioned away from fossil fuels, and that planners incorporate transportation into thoughtfully planned, efficient, and environmentally sustainable communities.  
• RATIONAL REGULATORY POLICY PREVAILS.  Ensuring the necessary free flow of capital into the rail industry and other private sector providers of transportation requires that regulatory policies promote efficient operations and encourage investment.  National networks require uniform and national regulatory structures to further the Nation’s commerce.

The Commission believes that to meet 21st Century transportation needs, it is necessary for Congress to establish a new Federal Compact with the American people.  

The key elements of that “compact” are:

• The United States is not the only major industrialized Nation reviewing the state of its surface transportation infrastructure.  In December 2006, Sir Rod Eddington presented a long-awaited report to the government of Great Britain that outlined major recommendations for its transportation system.  Eddington recommended that, over the next 20 years, the British government focus on congestion relief, key corridors between Britain’s largest cities, and international gateways that are showing signs of increasing congestion and unreliability.  “The policy process needs to be rigorous and systematic,” the report concluded.  “Start with the three strategic economic priorities, define the problems, consider the full range of modal options using appraisal techniques that include full environmental and social costs and benefits, and ensure that spending is focused on the best policies.”  To expedite major transportation initiatives, the report endorsed creation of a new Independent Planning Commission. The report noted that widespread road pricing could deliver significant economic and environmental benefits, and that pricing could substantially reduce the amount of additional roads needed to alleviate congestion.

  A strong Federal role in surface transportation that will evolve to meet the national interest;
• Increased expenditures from all levels of government and the private sector to compensate for past investment failures while addressing significant increases in future demand;
• A commitment to make more effective use of taxpayers’ funds for the national interest;
• Federal funding that is performance-based and focused on cost-beneficial outcomes with accountability for the full range of economic, environmental, and social costs and benefits of investments; and
• Far-reaching program reform to eliminate waste and delays in Federally funded program delivery.

Recommendations to Reform Institutions and Programs

We propose the new Compact with the American people be fulfilled through a performance-based approach that identifies and establishes priorities, and avoids parochial and wasteful spending. 

The Commission concludes that the current Federal surface transportation programs should not be “re-authorized” in their current form. We must begin anew.  This New Beginning is the dawn of the third era in the modern history of the Federal surface transportation program.  The first era began 50 years ago with construction of the Interstate highway system, which served as the unifying principle of Federal effort for three decades.  While it was an immense undertaking, the basic purpose of the Interstate enterprise was to convert lines on a highway map into miles of concrete, asphalt, and steel.  The completed system connected the Nation as President Eisenhower envisioned, and it still stands as one of the engineering marvels of the world.

The second era was ushered in with the passage of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA).  The “TEA” era has been characterized by the unprecedented flexibility afforded to State and local officials to invest Federal highway dollars in new modes and approaches.  Overall, State and local transportation officials invested heavily in their systems, matching Federal funds with State and local funds.  However, without easy-to-understand, system-wide performance targets, it is difficult to assure the public that the over $650 billion in transportation investments improved the national system and thereby met the Federal interest.  Ultimately, the TEA era may be viewed as a transition from the Interstate program to a third era of renewed Federal purpose that we seek to inaugurate with this report.

This third era will not be dominated by a single transportation mode, as was the Interstate program.  While funding flexibility will continue to have its place, it must be used to meet specific and measurable objectives to improve the Nation’s highway, rail, and public transportation networks.  In brief, the new user-financed Federal surface transportation program the Commission proposes will be performance-driven, outcome-based, generally mode-neutral, and refocused to pursue activities of genuine national interest, as outlined below.

Overview

To make the vision of a New Beginning a reality, Federal leadership and Federal surface transportation investments must be carefully aligned with the “National Interest” as defined above.  The Commission believes that several new structural features will be key to the successful program reform necessary to achieve the Commission’s vision.

• Developing a comprehensive, performance-based approach.
• Reforming program and project development processes to reduce the excessive time required to move projects from initiation to completion, improving overall project decisions, reducing project and overall program costs, and realizing project benefits sooner.
• Concentrating Federal surface transportation investment in 10 program areas:
  • Rebuilding America:  A National Asset Management Program
    
  • Freight Transportation:  A Program to Enhance U.S. Global Competitiveness
    
  • Congestion Relief: A Program for Improved Metropolitan Mobility
    
  • Saving Lives: A National Safe Mobility Program
    
  • Connecting America:  A National Access Program for Smaller Cities and Rural Areas
    
  • Intercity Passenger Rail:  A Program to Serve High-Growth Corridors by Rail
    
  • Environmental Stewardship:  Transportation Investment Program to Support a Healthy Environment
    
  • Energy Security:  A Program to Accelerate the Development of Environmentally-Friendly Replacement Fuels
    
  • Federal Lands:  A Program for Providing Public Access
    
  • Research, Development, & Technology:  A Coherent Transportation Research Program for the Nation.
• Harnessing the technical strengths of the USDOT and the surface transportation industry, developing a national strategic plan to guide public sector investment in these programs that will serve a growing and vibrant population and economy.
• Based on a Congressional charter, establishing an independent and permanent National Surface Transportation Commission (NASTRAC) that would use the national strategic plan to recommend appropriate authorization and revenue levels to Congress. 

The analyses that resulted in the Commission’s recommendations are explained in further detail in Chapter 6 of Volume II.   In synopsis, the planning process would begin with the USDOT, working collaboratively with its partners and stakeholders, by establishing the appropriate performance standards critical to serve the national interest under the targeted new program structured described below.  National transportation targets would be set for the long run to advance critical national goals for condition of transportation infrastructure, efficiency and mobility, safety, rural accessibility, environmental quality, energy conservation, access to Federal lands, and research. 

Speeding Project Delivery

Efforts to mitigate the environmental impacts of transportation projects through the National Environmental Policy Act often become bogged down in procedures and challenges, crippling the ability of State and local governments to respond promptly to inefficiencies in our surface transportation system.  These transportation inefficiencies hurt the economy in many ways, reducing business growth, employment prospects, mobility, and the leisure time of many Americans.  

Simply put, the Commission believes that it takes too long and costs too much to deliver transportation projects, and that waste due to delay in the form of administrative and planning costs, inflation, and lost opportunities for alternative use of the capital hinder us from achieving the very goals our communities set.  Information compiled by the Federal Highway Administration (FHWA) indicates that major highway projects take approximately 13 years to advance from project initiation to completion.  A large part of this time is associated with the environmental review process.  In recent years the median time to complete environmental impact statements (EISs) for highway projects has varied from 54 to 80 months.  FHWA has set a 2007 target of 36 months to complete EISs. 

The rapidly eroding purchasing power of the dollar for transportation construction in recent years has called particular attention to the costs of what many experts consider to be the excessively long time that it takes to bring a transportation project from concept to reality.  For some major projects, the time needed to complete planning, environmental, and construction activities can be 14 years or longer.  During this period, a project initially estimated to cost one amount can increase sharply in cost, undermining finance plans and construction schedules. 

The table below illustrates the impact of delay and inflation on a transportation project initially estimated to cost $500 million if construction begins at the start of 2008.  The project is estimated to take 4 years to construct.  Three cases are considered: construction begins immediately in 2008 and ends in 2011; construction begins in 2011 and ends in 2014; and construction begins in 2018 and ends in 2021.  The rate of inflation in highway construction costs in this illustration is assumed to be 7.2 percent a year (representing the average rate of cost increase for highway projects from 2000 to 2006 as measured by the FHWA’s Price Trends for Federal-Aid Highway Construction (or Bid Price Index [BPI]).

As is evident, the high rate of escalation in construction costs would cause the completed cost of the project at the end of 2021 to cost half a billion dollars more than had it been completed 10 years earlier.  Allowing for 3 years of planning and environmental review beginning in 2008, the project would cost $616 million if construction starts in 2011 and completes in 2014.  This latter case represents a 23 percent cost increase over the 2011 project completion date, but is still almost $400 million less than were its completion delayed until the end of 2021.

Project development activities under Federal Transit Administration’s (FTA) New Starts program experience similar delays.  From 2002 to 2005, the average project development time was more than 10 years, although it fell somewhat in 2006.  In light of the rapid increase in construction costs over the past several years, delays in completing projects have become very expensive.  Using the average increase in highway and bridge construction costs since 1997, if the average project development time for highway projects could be reduced from 13 years to 6 years, the cost of the project could be reduced by almost 40 percent.  This savings could then be applied to other projects, substantially reducing overall funding needed for highway construction programs.  The same would be true for other modes as well.

To reduce overall project delivery times for major transportation projects, the time to complete environmental reviews must be shortened, in conjunction with other measures that address conventional strategies for implementing projects once they clear environmental review.  Many fear that reducing the time devoted to the environmental review process or other aspects of project development will ultimately lead to projects that do not adequately address environmental and other community impacts.  Several things can be done to reduce the time required for the environmental review process without adversely affecting the quality of that process.  Two sources of delay can and should be addressed in the short term: 

• Redundancies in the National Environmental Policy Act (NEPA) Process. Draft EISs represent the culmination of several years of planning, public involvement, and coordination and collaboration with resource agencies, some of which could be done prior to formally beginning the NEPA process to ensure it is fully recognized.  The current process can create numerous redundancies, including the need to backtrack to revisit alternatives that were previously rejected, or to duplicate environmental analyses that were previously endorsed during planning or scoping but may not have been formally recognized by other agencies when done outside the formal NEPA process.  Another frequent byproduct is that repetitive additional analyses and studies must be prepared for issues that already have been adequately addressed prior to the start of the NEPA process.

• “Time is money, and our customers deserve the courtesy of us moving forward and making decisions…we consider federal agencies to be our partners.  We want them to be in the roles of interpreting regulations to help us meet our goals with project delivery.  But we also want them to interpret the laws to facilitate, to help us and not to hinder.” – Susan Martinovich, Director, Nevada Department of Transportation, at the Commission’s Las Vegas field hearing.

  Permit Process Can Add Significant Time.  In addition to the delays associated with NEPA compliance, projects often are held up pending permit approvals from Federal agencies such as the U.S. Fish and Wildlife Service and the Army Corps of Engineers.  Permit applications often languish for months, and it is not uncommon for Federal agencies to disagree with one another in exercising their independent oversight responsibilities.

The Commission recommends that a series of reforms be advanced to address problems with the project development process.  These issues can be addressed through statutory or regulatory approaches.  Changes in the current legal and regulatory framework for environmental reviews would be needed before any significant time-savings could be realized.  Specifically, the Congress and USDOT should consider changes in the following areas:

• Legislatively provide for a simplified NEPA process that offers the equivalent of a 1040 EZ tax return for projects with few significant impacts.
• Revise Council on Environmental Quality (CEQ) regulations to allow additional factors to narrow the number of alternatives considered as “reasonable alternatives”:
  • Alternatives should be appropriate for project-level (rather than planning-level) decisions
  • Alternatives should reflect community values
  • Alternatives should reflect funding realities
• Revise CEQ regulations for implementing NEPA to allow for a single EIS rather than the current requirement for a draft and final EIS, while preserving adequate opportunities for public comment and review.
• In parallel with revisions to CEQ regulations, FHWA would set minimum conditions for what must occur during a “robust scoping period” before publishing the Notice of Intent and formally beginning NEPA. Some requirements could include:
  • Determination of general project location
  • Determination of modal choice
  • Development of a risk management plan
• Handle impacts identification and mitigation issues early by considering them in an integrated fashion, looking at overall resources rather than in a sequential, project-by-project basis.  This might involve addressing these issues at the programmatic level earlier in the planning process.
• Standardize the “risk design” approach under Federal regulations so that project sponsors can proceed with design activities at risk during the EIS process.  The USDOT recently issued similar guidance for bridge projects in wake of the Minneapolis bridge collapse.
• Require greater coordination among Federal agencies reviewing transportation project permits, including:
  • Setting time limits for review
  • Using Federal transportation funds to pay for regulatory staff to speed reviews and comply with time limits
  • Establishing a Cabinet-level appeal process where USDOT can seek redress for adverse decisions.

Advancing the Federal Interest: 10 Programs

The 10 programs described below represent the key areas identified by the Commission for Federal participation and funding.  Each description explains why a Federal role is appropriate, how performance measures and standards would be set, potential strategies for meeting performance standards, and proposed Federal funding shares for qualifying projects.  These 10 new programs are intended to replace the dozens of separate highway and transit funding categories in SAFETEA-LU. 

An important element of many programs would be the development of national plans to accomplish key national program goals.  These plans would also serve as the basis for apportioning funds to the States on a cost-to-complete basis, much as was done for initial construction of the Interstate System.  National plans would be developed for the Rebuilding America; Freight Transportation; Metropolitan Mobility; Safe Mobility; Connecting America; Intercity Passenger Rail; Federal Lands; and Research, Development, and Technology programs.  These plans would then be consolidated into a national strategic plan for Federal investment by the USDOT. 

Except for the Federal Lands and Research, Development, and Technology programs, national program plans would be based on individual plans developed by each State and major metropolitan area.  The USDOT, in cooperation with State and local governments, multi-State coalitions, transportation system users, and the full range of public and private stakeholders, would develop national performance standards for each applicable program area. Those standards would be closely coordinated with key environmental and energy objectives. The USDOT would then work with each State and major metropolitan area to develop performance standards for their programs.  The time frames for meeting national standards could vary for individual areas depending on local circumstances, but eventually each State and metropolitan area would be expected to meet national standards.

State and local performance standards would form the basis for State and metropolitan plans.  These plans would replace the long-range and short-range plans that currently are required, but would be expected to include many of the same elements.  Major differences between current plans and the plans under the new program are that major projects under the new plans would have to be shown to be cost-beneficial and plans would have to be developed to meet specific performance standards.  Progress toward meeting performance standards would be measured. 

The Federal government should be a full partner with the State and local governments and the private sector in meeting the significant investment requirements of this new approach.  Since the plans would be the basis for apportioning funds among the States, a high degree of uniformity would be required.  Only projects in the plans would be eligible for Federal funds, so plans would have to be comprehensive, especially for the near term.  Since transportation needs are dynamic, plans would have to be updated, especially prior to each surface transportation reauthorization.  Also, because there are overlaps among programs, plans developed for one program must be consistent with plans developed for other programs. 

(1) REBUILDING AMERICA: A National Asset Management Program.  Our economic and social wellbeing depends on the multi-trillion dollar investment we have made over the course of the Nation’s history on transportation infrastructure and services.  All levels of government and the private sector have contributed to this inheritance.  Accordingly, it is clearly in the interest of all parties, starting with the Federal government and its own immense investment in this system, that we not squander this legacy through underinvestment in its preservation and maintenance.  Therefore, the first of the 10 programs proposed by the Commission would put and keep the Nation’s infrastructure in a state of good repair in the most efficient and cost-effective manner possible.  More specifically, this program would address the portions of the surface transportation network in which there is a strong Federal interest: Federal-aid Highways, including the Eisenhower System of Interstate and Defense Highways and the National Highway System, major transit assets, intercity passenger and freight rail lines, and network connectors between our modes that complete the overall system. 

The collapse of Minnesota’s Interstate 35W bridge on August 1, 2007, illustrated the fragile nature of the Nation’s surface transportation system.  “The country’s new and long overdue look at underinvestment in bridges, roads and transit should illustrate that government can’t build and maintain infrastructure overnight,” noted Minneapolis Mayor R.T. Rybak.  “It takes long term, consistent investment, even when there isn’t a constituency lobbying for more money.”  Photo Source:  FHWA.

This program underlies all of the other recommended programs, and would need to be closely coordinated with them.  The USDOT would define appropriate performance standards for each facility type, in conjunction with States and stakeholders.  The full range of stakeholders (including system owners, operators, and users) would be convened by each State Department of Transportation and public transit operator.  This group would use its participants’ plans based on information that inventories shortcomings in the physical infrastructure in order to develop estimates of the cost to restore these facilities, putting into place best practices of capital budgeting with full consideration of life-cycle costs.  These estimates would include the costs of technological and safety upgrades to be made in conjunction with these rebuilding and preservation projects, to improve the operational and safety performance of existing facilities.  States would be able to use Transportation Asset Management methods and tools (such as pavement management systems) to establish that the projects contained in their plans are the most cost-effective actions.   

To assure the maximum effectiveness of Federal capital investment support, States, local governments, and other entities accepting Federal capital support must develop, fund, and implement a program of asset maintenance and support over the useful life of the asset that conforms to nationally accepted standards and that is independently audited.  The Federal contribution to funding each of the eligible projects would be established at 80 percent of the project costs.

(2) FREIGHT TRANSPORTATION: A Program to Enhance U.S. Global Competitiveness.  Interstate commerce is the historic cornerstone defining the Federal role in transportation. The Federal interest in promoting efficient interstate and international flows of goods and services has motivated the Federal government to support road, canal, and railroad building since the early days of the Nation. Over the last several decades, however, the investment has not kept pace with the demands of modern, trade-driven supply chains that stretch from the United States to virtually everywhere in the world. Growing volumes of freight that now move along our roads, rails, and waterways are increasingly choked by a lack of adequate capacity. These chokepoints at major gateways and trade corridors are a potential trade barrier as threatening as tariffs, and often represent environmental hot spots.  Economic forecasts indicate that by 2020, freight volumes will be 70 percent greater than they were in 1998. Without improvements to the surface transportation network (especially key freight transportation corridors), freight transportation will become less efficient and reliable, hampering the ability of American businesses to compete in the global marketplace.

Projected Growth in Container Imports to the U.S. Merchandise Trade by Export Region, 2000-2015

This chart shows that containerized imports have grown dramatically in recent years, particularly from China. The growing dominance of China in the containerized trade is expected to continue in the future.

The Commission believes that the Federal government must return to its historic role of ensuring that the transportation needs of interstate commerce are met.  The Commission supports the creation and funding of a national freight transportation program that would, in conjunction with States and metropolitan areas and consistent with a National Freight Transportation Plan, implement highway, rail, and other improvements that eliminate chokepoints and increase throughput.

The program would provide public investment in crucial, high-cost transportation infrastructure.  This would include projects to increase capacity on the Federal-aid highway system (predominantly the Interstate System and portions of the National Highway System) significantly impacted by national and regional freight movements.  It would also include public-private projects that have potential national and regional benefits, including facilitating international trade and relieving congestion.  Such projects would include intermodal connectors—roads that link intermodal facilities with an interstate highway—and key sections of interstate highways, such as those near port facilities, where congestion increases air pollution from mobile sources and adds time and costs to the supply chain. Eligible projects could also include assistance for strategic national rail bridges where cost of construction exceeds return on private invested capital, implementation of train control technology, and assistance in corridor development. In addition, eligibility would include development of “green” intermodal facilities and operations, and on/near dock facilities.  These projects can reduce vehicular congestion, emissions, and noise—and can improve safety.

The USDOT would take a strong role in formulating the National Freight Transportation Plan by establishing a set of performance standards related to efficient management of increasing freight volumes. The development and accomplishment of the State plans would in most cases require multi-State cooperation. Multi-State and State freight planning groups would use stakeholder-provided information to develop a consensus on future investments in major highways, freight rail facilities, waterways, ports, and intermodal facilities. States would be required to evaluate the projects in their plans using benefit-cost analysis from the point of view of the public benefit, looking at the full range of potential solutions to freight chokepoints to find the best value for society. Project funding should be merit-based and grantees should be accountable for meeting freight mobility performance standards, and consistent with national environmental and energy goals.

It will be important to standardize public benefit methodology for evaluating and negotiating partnerships between private entities (such as railroads), States, and local and Federal interests.  This will ensure that private entities are not subsidized and, concomitantly, that they are not required to pay for public benefits.  Government support for infrastructure projects could actually result in a net reduction of overall needed capacity expansion if private investment is diverted to projects with primarily public benefits.  Similarly, publicly funded projects should not require non-economic private investment or service, or supplant or diminish private investment.

Federal participation in individual projects would be 80 percent, with higher participation levels justified based on their national benefits, particularly when benefits fall primarily outside of the region. Apart from demonstrating that proposed projects under this plan are cost-effective and justified, additional Federal requirements would be kept to a minimum. 

(3) CONGESTION RELIEF: A Program for Improved Metropolitan Mobility.  The Nation’s largest urban areas generate 60 percent of the value of U.S. goods and services.  The efficient movement of citizens and goods within these areas is critical to their productivity, and by extension, to the economic productivity of the Nation itself.  Clearly, the Nation has a vital interest in guaranteeing efficient metropolitan mobility.  Therefore, the Commission recommends that a distinct program be established to fund projects that reduce congestion in our largest metropolitan areas (of 1 million or more in population).

Analyses conducted by the Commission indicate that a 20 percent reduction in per-vehicle delay on major urban highways is possible by 2025.  The analyses show, however, that this goal cannot be met without a comprehensive set of strategies to manage demand, improve operations, significantly increase transit capacity and ridership, and significantly expand highway capacity.  Many of these strategies, especially expanded transit systems and additional highway capacity, will involve substantial capital investment. 

Metropolitan Areas Over 1 Million in Population Share of U.S. Totals for Selected Characteristics

Large metropolitan areas account for a large share of the total population, economic output, transit commuters, air pollution exposure to people, and traffic delay in the United States. Source: Metropolitan Transportation Commission

Meeting this goal will require broad coordination among agencies at multiple levels of government. The USDOT would set mobility goals for large metropolitan areas by first establishing standardized measures of mobility (e.g., hours of delay per 1000 vehicle miles traveled [VMT]).  It would then specify national mobility standards for metropolitan areas.  The full range of public and private stakeholders (including system owners, operators, and users) involved in the planning, construction, and operation of regional transportation in such metropolitan areas would be convened to assure consideration of the urban interests in defining national standards.  This would help integrate transportation planning into other urban planning activities.

The Commission expects that the Metropolitan Mobility plans in most metropolitan areas will include an increasing emphasis on public transportation, especially electrified railways. Federal transportation policy must more effectively support and encourage the use of public transportation as part of a balanced approach to metropolitan mobility. Traditional bus and rail transit and, where appropriate, intercity passenger rail must be an increasingly important component of metropolitan mobility strategies due to their ability to move large volumes of people into and out of areas that cannot handle more automobiles. Not only is transit an important element of congestion relief strategies, it supports policies to reduce transportation energy consumption, greenhouse gas emissions, and air pollution if sufficient use is demonstrated. The Commission believes that public transportation is essential to meeting our future mobility needs in metropolitan areas. But even with transit playing a much bigger role in the future, the Commission believes that many of the plans will also include significant increases in highway capacity as part of a robust nationwide surface transportation system.

U.S. Carbon Emissions from Fossil Energy Consumption by End-Use Sector in 2005

The chart shows that the transportation sector is the largest contributor of greenhouse gas emissions in the United States. Source: Energy Information Administration

The Commission recognizes that road pricing has great potential to reduce congestion and improve system efficiency because of its ability to better utilize the Nation’s existing infrastructure. Congestion pricing provides an incentive for personal travelers to drive during off-peak hours, or to change their mode of transportation for time-sensitive journeys. Such fees are higher in times or places with heavy traffic, and lower in other times and places with light traffic. They are already used at a variety of highways, bridges, and tunnels throughout the U.S. Such fees promote the efficient use of existing infrastructure. To the extent that some drivers choose other modes or routes or to travel at less congested times of day rather than pay the fee, congestion is reduced. Congestion fees have a further critical benefit in that they send price signals about the need to add capacity, thus promoting the efficient use of investment dollars in the long run.  Mobility goals also should reflect the fact that high traffic urban highways can generate significant revenues from congestion pricing, requiring less tax-based funding.  Metropolitan areas of 1 million or more in population would use these performance standards and national goals to develop their own performance standards, developing Metropolitan Mobility plans to meet these standards in a cost-beneficial manner.    The Commission also expects that the major metropolitan areas will be guided by these standards in their accommodation of new economic and population growth.   

Funds authorized under the Metropolitan Mobility program would be reserved for urban areas of 1 million or more in population.  Although these major metropolitan areas comprise about 60 percent of total U.S. population, they capture over 85 percent of national market share for three critical transportation indicators: traffic congestion, transit ridership, and population exposure to auto-related air pollution.

Planning and project selection authority in the Metropolitan Mobility program would be vested in a transportation agency designated by the Governor and leading local elected officials from the metropolitan area.  This could be the Metropolitan Planning Organization (MPO), another regional transportation agency, or the State department of transportation.  In multi-State metropolitan areas, authority could be vested in a consortium of agencies through interstate compact.  The Federal funding share of Metropolitan Mobility projects would be 80 percent of project cost.

We urge Congress to broadly define “metropolitan area” for the purposes of the program, such as employing the concept of combined statistical areas defined by the Office of Management and Budget.

(4) SAVING LIVES: A National Safe Mobility Program.  Travelers on the Nation’s surface transportation system have a right to expect safe and uniform transportation conditions from coast to coast.  The Federal role in establishing safe conditions for travel is well established through agencies such as the National Transportation Safety Board, the Federal Motor Carrier Safety Administration, and the National Highway Traffic Safety Administration, and through Federal safety regulation of air, land, and sea travel.  It is, therefore, the Commission’s recommendation that a national plan for safety be developed that both informs investments in all other transportation programs and leads to transportation investments undertaken purely for safety purposes. 

Currently, highway travel accounts for 94 percent of the fatalities and 99 percent of the injuries on the Nation’s surface transportation system.  In 2006, 42,642 persons were killed and approximately 2,575,000 were injured in highway crashes.  Significant progress has been made over the last 50 years in improving highway safety.  Fatality rates dropped from 5.3 fatalities per 100 million VMT in 1965 to 1.42 fatalities per 100 million VMT as of 2006.  However, compared with other developed countries, a few of which have fatality rates at or below 1.0 fatalities per 100 million VMT, it is clear that the U.S. still has much room to improve its highway safety.  Were we presently at a rate of 1.0 fatalities per 100 million VMT, total highway fatalities would be at just over 30,000 per year—still much too high but some 12,600 fewer than we currently sustain as a Nation , year after year.

Fatalities and Injuries in Motor Vehicle Crashes in the U.S., 1988–2006

The chart indicates that total fatalities on highways in the United States have been relatively stable over the last two decades. The total number of injuries in motor vehicle crashes has steadily declined since peaking in the mid 1990s. Source: National Highway Traffic Safety Administration

The USDOT would define safety performance metrics (e.g., fatalities and serious injuries per 100 million VMT) to be used by all Federal, State, and local agencies to measure progress.  The Commission recommends that the USDOT establish national safety standards, beginning with an ambitious but reachable goal to cut surface transportation fatalities in half from current levels by 2025.  Specific standards for individual States and metropolitan areas would be established through consultations with safety interests including State and local departments of transportation and other governmental units.  States and metropolitan areas would then develop strategies for reaching their specific safety goals, both by incorporating safety projects within the Safety plan and by including safety features into projects listed in the various Freight Transportation, Metropolitan Mobility, and Rebuilding America plans proposed by the Commission.  Reflecting the importance the Commission assigns to improved safety, it recommends that the Federal share of the funding of qualifying safety projects be 90 percent of the project cost.

Because the users of every transportation mode are affected by injuries and fatalities, the solutions to improving the overall level of transportation safety must be broad and multifaceted.  The following strategies should be considered in State and local plans: 

• Highway improvements to reduce roadway departures, create a safer environment for pedestrians and bicyclists, and reduce intersection crashes
• Stronger enforcement of safety laws including speed limits, seat belt laws, and impaired driving laws, making the maximum use of technology to do so
• Enhanced adjudication of highway safety laws to impose penalties commensurate with the seriousness of the offenses
• Enhanced motor carrier safety programs to reduce crashes caused by driver fatigue, unsafe operators, and automobile drivers who do not know how to share the road with large trucks
• Stronger licensing requirements that take into account age and experience
• Highly visible public education campaigns to make everyone aware of the severity of highway safety problems
• Low-cost safety enhancements such as guardrails and striping
• Enhanced efforts to deploy technology, equipment and grade separate r