House Passes Spending Bill

The House of Representatives passed a transportation reauthorization bill called the INVEST Act, but it really should be called the SPEND Act. Spending money is only an investment if the spender expects to get something in return for the cost, and much of the money in the INVEST Act will produce no real returns.

The bill, which has yet to be approved by the Senate, represents the normal reauthorization of the Highway Trust Fund, meaning federal spending on highways and transit, which happens about every six years. Normally this mainly deals with how the gas taxes and other federal highway user fees are spent. But this year, the House has gone overboard, agreeing to spend $715 billion over five years, which more than twice as much money as the Highway Trust Fund is likely to collect.

Admittedly, part of that $715 billion includes $168 billion for water infrastructure, which has never previously been a part of a transportation reauthorization bill. It also includes $95 billion for Amtrak, which is also not from the Highway Trust Fund. Spending on highways and transit would total to $452 billion, which is still more than twice as much as is likely to be collected in highway user fees. The federal government collected less than $45 billion in user fees in 2019 and, since collections in 2020 and 2021 will be smaller, total revenues are likely to be less than $220 billion over the five years of the bill.

That bill includes $109 billion for transit, which is about a 68 percent increase over the previous reauthorization. Congress has given transit agencies more than $300 billion since 1985, yet per capita transit travel has declined from 51 trips per urban resident in 1985 to 37 in 2019. The pandemic has accelerated all of the trends that have contributed to transit’s decline: decentralization of jobs, decentralization of residences, and an increase of people working at home. Spending more federal dollars on transit won’t overcome these trends.

Similarly, the $95 billion the bill would spend on Amtrak is more than triple current spending, yet is not likely to significantly increase Amtrak ridership. Despite $100 billion in subsidies in the past 50 years, Amtrak’s share of passenger travel has declined from 0.16 percent to 0.10 percent, and is not likely to increase even with a tripling of spending. This also duplicates the $80 billion that Biden wants to spend on Amtrak in the infrastructure bill; since all of it is likely to be wasted, Congress doesn’t need to do both.

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The bill also joyfully includes nearly $15 billion worth of “member-designated projects,” in other words, earmarks. Earmarks, which have been kept out of transportation bills since 2010, allow members of Congress to take credit for projects that either would have been funded anyway or should not have been funded at all.

Congress requires the states to spend millions of dollars each year writing long-range transportation plans that are supposed to set priorities for how the states will spend federal dollars. Earmarks come out of the money that states would have normally received for transportation but limit how they can spend the money. If the earmarked projects were on the state priority lists, they would have been funded even without the earmarks. If they were not on the priority lists, the earmarks reduce the money available for higher priority projects. In effect, Congress is saying that it doesn’t believe the state transportation planning process is worthwhile and so it overrules it, even as it continues to mandate it.

The House Transportation and Infrastructure Committee thoughtfully provides a spreadsheet listing all 2,383 earmarks included in the bill along with the name of the U.S. representative who can be blamed for each earmark (in fact, the list is in alphabetical order of representatives’ names). The spreadsheet doesn’t reveal whether each earmark comes out of highway or transit money, but either way, to the extent that the earmarks override local priorities, they reduce the benefits of transportation spending.

Spending on water wasn’t in the original draft of the INVEST Act, so — like the Amtrak money — the House must have added it in order to take credit for projects that Biden wanted to include in his $2.3 trillion infrastructure bill. The House passed a similar INVEST Act, minus the water projects, in 2020 but the Senate did not agree to it. It appears likely that the Senate won’t give much consideration to this bill, either, at least until debate over the infrastructure bill has been resolved.