The United States federal government should close the United States Department of Transportation

Exts – Federal Control Fails

Federal control over transportation fails -- guarantees congestion and decay -- only market forces create efficient and localized solutions.

2. Transportation Ranked Low on Budget Priorities. As part of the federal budget, transportation programs must—in practice and in theory—compete with other federal programs for available resources. Until 2008, highway and transit spending escaped this constraint by virtue of a dedicated funding source (federal fuel taxes) and a trust fund that protected these revenues from congressional and presidential predation. But after several years of spending more than it earned, the trust fund required its first ever infusion of general revenues in 2008, and many more infusions are predicted unless dedicated revenues are increased or spending is cut. Implications This mode of operation makes little sense from an economic perspective. Transportation services represent a vital commercial activity providing benefits to every American and every American business. Yet the amount of transportation service provided is based on overall budget priorities rather than the needs and desires of transportation users. Such a system is also independent of consumers’ willingness to “buy” more transportation services, since no market exists to accommodate an increase in demand. This results in more congestion and more infrastructure decay. While it may be possible for a socialist enterprise to mimic the market, the politicization of transportation programs work to undermine that effort. Most Americans want to drive their cars on congestion-free roads, yet most federal, state, and local elected officials and department employees intervene by mandating the provision of non-road transportation products that most transportation consumers do not want. In a functioning market, a report to the president of a national restaurant chain that sales of apple pies have jumped would induce him to order more apple pie production, yet if today’s transportation officials ran that chain, they would respond by ordering more salad. In today’s transportation world, that salad is street cars, high-speed rail, Amtrak, and bicycle paths. What’s Next? Over the next few months, this new Heritage transportation reform series will present several reports on ways in which market processes can be integrated into the current transportation system in ways that offset diminished budget resources and the poor investment and spending choices of the past. These reports will include analyses of the benefits of competitive contracting and deregulation in transit and passenger rail, public–private partnerships for operations and infrastructure investment, general privatization, and the use of tolls and other user fees to supplement existing financial resources.

Maybe urging bureaucrats and politicians to set economically rational prices is like advocating vegetarianism to wolves. It just is not in their nature. Bureaucrats talk about orderly systems, not maximizing resource use. Politicians talk about fairness, not efficiency. Both kinds of officials tend to defer to those with a large concentrated interest at stake rather than the larger constituency of people with dispersed interests. The market offers a better prospect than government for furthering the general public interest. Transport service companies in a competitive environment will be forced by the needs of their owners and creditors to charge pretty much what the market will bear, which happens to be about what will maximize the efficiency of the system. They will not survive if they offer gridlock. They will strive to match supply and demand, or "clear" markets, as economists say. When they have an underworked asset they will strive to drum up some revenue and use it. And if they happen to make superprofits for a while, that will generate the revenue and attract the capital for an expansion of capacity.

Government is inefficient and fails.

Winston, 2k-- fellow at the AEI-Brookings Joint Center for Regulatory Studies and a

senior fellow at the Brookings Institution (Clifford, “Government Failure in Urban Transportation.”, AEI-Brookings Joint Center for Regulatory Studies, November, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=259788)//EM

Public provision of urban transportation is, in theory, socially desirable. Rail and bus operations exhibit economies of traffic density that could lead to destructive competition in an unregulated market. Highways are traditionally perceived as public goods that require enormous capital and maintenance investments that the private sector is unlikely to finance. Improving the urban mobility of elderly and low-income citizens is an important social goal that should be addressed by government. But in their official capacity as regulators, service providers, and investors, public officials have generally instituted policies that have led to inefficient and inequitable urban transportation. A case for privatizing urban transport is developing because these actual government failures most likely outweigh potential market failures. Governmental involvement in the transportation systems of U.S. cities illustrates the problem. Local governments, with state and federal financial support, are quasimonopoly providers of urban bus and rail transit. Most U.S. roads and bridges are owned and operated by federal, state, or local governments. How has the public system performed? City roads are jammed at an ever expanding rush hour, causing infuriating delays. Bus service, never fast, has deteriorated over the years, while fares have risen. Pressures to expand rail service to outlying suburbs remains strong, even though current rail operations cannot attract enough riders to cover more than a small fraction of their total expenses including capital costs. Popular opinion seems to be that the United States can—and should—spend its way out of this mess by building more roads, running more buses, and installing more track. Indeed, in the Transportation Equity Act for the 21st Century, T21 for short, Congress greatly increased federal support for transit and highways for 1998-2003. Many transportation analysts are skeptical and argue that although more public spending for urban transport may result in some improvements for travelers, its primary effects will be 2 to swell transportation deficits and waste tax revenues. Instead, they suggest that government pursue more “efficient” policies such as charging motorists for the congestion they cause and balancing costs and benefits when deciding transit frequencies, route coverage, and vehicle sizes. I have come to believe that it is futile to expect public officials to consider such changes because urban transportation policy is largely shaped by entrenched political forces. The forces that have led to inefficient prices and service, excessive labor costs, bloated bureaucracies, and construction-cost overruns promise more of the same for the future. The only realistic way to improve the system is to shield it from those influences and expose it to market forces by privatizing it. Preliminary evidence from the United Kingdom and elsewhere suggests that although a private urban transportation sector should not be expected to perform flawlessly, it could eliminate most government failures and allow innovation and state-of-the-art technology to flourish free of government interference. The real uncertainty is what could spur policymakers to initiate change.

Federal control leads to higher costs -- earmarks prove.

Racheter, 7 [Dr. Don, Public Interest Institute, http://heartland.org/sites/all/modules/custom/heartland_migration/files/pdfs/22799.pdf, “Spending Our Transportation Dollars Wisely”, Accessed Jun 19, //SH]

One factor that has contributed to the discussion of increasing transportation revenue is the rising cost of the materials and labor needed for construction of highways or roadways. The increasing cost of construction materials results in less “bang for the buck” of transportation revenue. There is also the risk that an increase in the fuel tax or other proposals that would raise the amount of revenue available to spend on transportation projects will encourage even higher prices for road projects. When the government is paying the tab, there is often no thought given to economizing or trying to keep costs down. An issue at the federal level that impacts state transportation spending is the earmarking of federal funds for a specific project. If Congress would give up the privilege of earmarking funds, more of the current funding could be used for transportation projects such as critical bridge repair, rather than spending current funds on bike paths and museums, then raising additional taxes for higher- priority projects.

Status quo proves the government cannot invest money -- education, infrastructure, and taxation -- projects should be deregulated.

Epstein 10 (Richard A.the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, is the Laurence A. Tisch Professor of Law, New York University Law School, and a senior lecturer at the University of Chicago. His areas of expertise include constitutional law, intellectual property, and property rights., “Deregulate now” Hoover Institute, 2010 No.2 4/21/12 http://www.hoover.org/publications/hoover-digest/article/5298//Mkoo)

The political mood of the country can be captured in one word: glum. In particular, there is widespread recognition at the state level that conditions have reached near-crisis proportions. In states such as California, Illinois, and New York, large deficits and service cutbacks loom, as traditional tax bases can no longer support the ambitious entitlement programs that rest precariously upon them. Tax revenues are down 10 percent across all states, even as taxes are raised in half of them. The consequences are serious. Just look at the implosion in higher education taking place at the University of California. State revenues have gone dry, budgets have been slashed; yet student and labor protests make it difficult to raise the tuition and fees needed to maintain a strong institutional base. More and more students are unable to complete their education in four years, and unpaid furloughs will drive the best professors, administrators, and students elsewhere. Tragically, the economic lesson often goes unheeded. Too many professors and students link arms with union organizers in the naive hope of extracting blood from a stone. A bankrupt state cannot increase allocations to the university. Meanwhile, affluent citizens pack their bags to move to low-tax jurisdictions; those who stay do more tax-free work at home or participate more heavily in the underground economy. It won’t work to reaffirm the deadly triumvirate that drives this misery: tax the rich, greater local control over real estate development, and special privileges for organized labor. What’s needed is to break from the past with some unimaginative but necessary resolutions in the areas of taxation, real estate, and labor. On taxation, don’t play the mug’s game of imposing ever higher marginal tax rates on ever lower amounts of income. Play it smart for the long haul: low income-tax rates (and no estate taxes) will attract into states and communities energetic individuals who would otherwise choose to live and work elsewhere. Treasure their efforts to enlarge the overall pie. Don’t resent their great wealth; remember the benefits their successes generate for their employees, customers, and suppliers. Repudiate the politics of envy for the social destruction it creates. Don’t fret about the states and communities left behind; let them adopt the same sound policies to keep people at home. Enterprise is infectious. The outcome won’t be a zero-sum game. Open markets are the rising tide that raises all ships; high taxation is the tsunami that sinks them. On real estate, change the culture so that getting permits for yourself and blocking them for everyone else is no longer the pre-eminent developer’s skill. The government can still prevent buildings from falling down and fund infrastructure through general taxation. But take a stand against letting entrenched landowners and businesses raise NIMBY (not in my backyard) politics to a fine art. Today our dysfunctional land-use processes too often build thousands of dollars and years of delay into the price of every square foot of new construction. The requirements on aesthetics and disability access should be junked, along with the crazy-quilt system of real estate exactions that asks new developments to fund improvements whose benefit largely accrues to incumbent landowners. And for heaven’s sake, learn the lesson of Kelo v. City of New London and stop using the state’s power of condemnation for the benefit of private developers. On labor, state and local governments must junk the progressive mind-set in both the public and the private sector. State and local governments should never, repeat never, be forced to negotiate with local unions. The huge pensions garnered by prison guards in California or transportation workers in New York present the intolerable spectacle of ordinary citizens paying huge subsidies to union workers far richer than themselves. On the private side, don’t force developers to hire union workers on construction sites or to block the construction of new facilities that hire nonunion labor. If unions are really efficient—and they aren’t—let them compete like everyone else. A bankrupt state cannot increase allocations to its flagship university. Meanwhile, affluent citizens pack their bags to move to low-tax jurisdictions. On other labor fronts, we should kill off minimum-wage laws that reduce opportunities for youthful employees and overtime legislation that distorts labor markets. And yes, take on the sacred cow by repealing the antidiscrimination laws on race, sex, and especially age. None of this activity costs the public a dime. All of it will increase tax revenues and reduce administrative expenses. The best test of a good policy is whether it is sustainable over the long haul, and we know now that the progressive regime flunks this key test. At this point, all good libertarians can only take cold comfort that they have fought these destructive policies tooth and nail. The next step can be summed up in two words: deregulate now.
Federal action fails -- misallocation, stifles innovation, and increase costs.

Roth 10--civil engineer, transportation economist, research fellow at the Independent Institute (Gabriel, Federal Highway Funding, CATO Institute, June 2010, http://www.downsizinggovernment.org/transportation/highway-funding)//EM

The federal government plays a large role in transportation policy through subsidy programs for state governments and a growing array of regulatory mandates. Modern federal highway aid to the states began in 1916. Then the interstate highway system was launched in 1956 and federal involvement in transportation has been growing ever since. Today, the interstate highway system is long complete and federal financing has become an increasingly inefficient way to modernize America's highways. Federal spending is often misallocated to low-value activities, and the regulations that go hand-in-hand with federal aid stifle innovation and boost highway costs.

The government sucks at planning transportation projects.

O’Toole, 8--senior fellow with the Cato Institute (Randal, “Roadmap to Gridlock The Failure of Long-Range Metropolitan Transportation Planning”, 5/27 http://www.cato.org/pubs/pas/pa-617.pdf)//EM

No plan did sensitivity analyses of critical assumptions. None bothered to project potential benefits or cost-effectiveness of projects considered. All but a handful of plans failed to include any realistic alternatives, and many failed to project the effects of the proposed plan on transportation. As a result, plans lacked transparency: taxpayers and other readers of most plans would have no idea how projects were selected, whether those projects or the plans themselves were cost effective at meeting plan goals, or even, in many cases, whether the plans met any goals.

Public management raises costs -- bureaucracy, high wages, and large amounts of maintenance.

Winston, 2k-- fellow at the AEI-Brookings Joint Center for Regulatory Studies and a

senior fellow at the Brookings Institution (Clifford, “Government Failure in Urban Transportation.”, AEI-Brookings Joint Center for Regulatory Studies, November, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=259788)//EM

Travel on urban thoroughfares is also not produced at minimum cost. Gabriel Roth (1996) argues that highways make inefficient use of their capacity and actually run a substantial deficit when depreciation of highway capital is taken into account. Small, Winston, and Evans (1989) found that highway pavement is generally too thin, which raises maintenance costs. Public management of construction projects also raises costs because bureaucratic rules prevent the government from using the latest technologies, causing some investments to need upgrading shortly after completion. Project managers also specify detailed regulations that force contractors to adhere to the letter of the contract instead of seeking higher-quality, efficient alternatives. Finally, highway labor costs have been elevated by the Davis-Bacon Act, which requires that prevailing union wages must be paid on all federal construction contracts.
The federal government can’t plan effectively -- that hurts efficiency, increase congestion, decreases mobility and safety.

O’Toole, 8--senior fellow with the Cato Institute (Randal, “Roadmap to Gridlock The Failure of Long-Range Metropolitan Transportation Planning”, 5/27 http://www.cato.org/pubs/pas/pa-617.pdf)//EM

Federal law requires metropolitan planning organizations in urban areas of more than 50,000 people to write long-range (20- to 30year) metropolitan transportation plans and to revise or update those plans every 4 to 5 years. A review of plans for more than 75 of the nation’s largest metropolitan areas reveals that virtually all of them fail to follow standard planning methods. As a result, taxpayers and travelers have little assurance that the plans make effective use of available resources to reduce congestion, maximize mobility, and provide safe transportation facilities.

Government regulation are vague and often conflicting.

O’Toole, 8--senior fellow with the Cato Institute (Randal, “Roadmap to Gridlock The Failure of Long-Range Metropolitan Transportation Planning”, 5/27 http://www.cato.org/pubs/pas/pa-617.pdf)//EM

Part of the problem is that Congress has required planners to include or consider a number of vague goals, including supporting economic vitality, enabling global competitiveness, promoting energy conservation, and accessibility. 47 Having set the precedent by requiring unquantifiable, vague, and/or conflicting goals, Congress has effectively encouraged planners to add more such goals of their own. Most plans offer little hint as to how planners account for the tradeoffs between these goals. But the plan for Nashville includes a system of scoring projects that provides a revealing glimpse into planners’ priorities.
Federal funding sends the signal that efficiency and cost aren’t important -- it also encourages high-cost, useless projects.

O’Toole, 6-- director of the Thoreau Institute and an adjunct scholar at the Cato Institute (Randal, “A Desire Named Streetcar How Federal Subsidies Encourage Wasteful Local Transit Systems”, Cato Policy Analysis, 1/5, http://www.cato.org/pubs/pas/pa559.pdf)//EM

Yet the demand for pork from politicians and interest groups isn’t enough to explain the present-day stampede to fund inefficient 19thcentury rail travel. Economist Charles Lave blames federal funding for the transit industry’s increasing cost per transit rider. Federal funding “sent the wrong signals to management and labor,” says Lave. “Management interpreted the message to mean: efficiency was no longer primary; rather, it was more important to expand passenger-demand and to provide social services. So routes were extended into inherently unprofitable areas and fares were lowered to the point where no one would find them burdensome. Labor interpreted the message to mean: Management now has a Sugar Daddy who can pay for improvements in wages and working conditions.”49 Indeed, prior to the Urban Mass Transportation Act of 1964, the San Francisco Bay Area was the only region of the country seriously considering construction of new rail lines. Lave is correct in a general sense. But the problem is caused by more than the simple act of federal funding. Congress has also deliberately or accidentally built numerous incentives into the law that encourage transit agencies to focus on high-cost, low-benefit alternatives. The U.S. Department of Transportation has added to those incentives with its rules tied to the administration of transportation funds. Although the ideal solution would be to devolve all transportation funding to state and local governments, eliminating the perverse incentives can solve at least some of the problems in the short term.

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