A whopping 11 percent of the funds in the most recent highway bill (that’s $22 billion) were earmarks, McCaskill points out to LaHood, and over the 20 years the total for earmarks has been pegged at around $7.5 billion.
Writing for the Heritage Foundation, Ronald Utt, Ph.D., says that many members of Congress facing changes to earmark practices “are unenthusiastic about the change or even hostile to it. They believe that earmarking is an integral and valuable part of their duties.”
A common definition of earmarks, says Utt, is “a legislatively mandated expenditure that specifies the location or company and the project to receive the funding.”
The Case for P-P-Privatization
The antidote to traffic congestion and decaying infrastructure is not more government programs. The answer, says the author of a new book, is to turn motorists into consumers of American roads . . . not just users of them.
Only the increased use of public-private partnerships (PPPs or P3) can repair our roadways and boost our economy, he says.
And that, the writer concedes, means toll roads. But on the flip side, he says, it also takes politics out of the equation.
The Road to Renewal: Private investment in U.S. transportation infrastructure (The AEI Press, 2011) is written by R. Richard Geddes, an associate professor of policy analysis and management at Cornell University, who recently served as a commissioner on the National Surface Transportation Policy and Revenue Study Commission. Geddes is also an adjunct scholar at the American Enterprise Institute that published the book.
Former U.S. Secretary of Transportation Mary Peters calls the book “a must-read for those of us who seek to provide funding for America’s transportation system now and into the future.” And Robert Poole, director of transportation policy at the Reason Foundation, says it is “the best and most insightful book yet on the role that private investment can and should play in transportation infrastructure.”
In a P3, it is private investors (not taxpayers) who bear the costs and risks, argues Geddes, giving them strong incentives to complete projects on time and on budget, and introducing sharp, focused incentives necessary to operate, upgrade and expand key facilities. “Because investors stand to profit from P3s, it’s in their interest to attract motorists through efficient operation, rigorous safety standards and fast, thorough repairs — a customer service ethic that government-operated systems lack.”
P3s also make way for innovative pricing that can reduce congestion and decrease emissions, says Geddes. He also argues that they would bring private capital and new jobs to communities direly in need of both. Private funds can be used to build new highways from scratch, or be employed to take over existing roads, using two similar but different payback scenarios. And once privatized and commoditized, roads could become investment opportunities for such entities as pension funds, bringing even more private capital to bear on infrastructure.
“Most importantly, P3s turn motorists into consumers instead of merely users of America’s roadways. As consumers, motorists have the power to demand the services they need.” Presumably the argument also holds good for the trucking companies that deliver most of America’s freight. Citizens, Geddes maintains, own the vast majority of America’s roads “and deserve a competitive return on their investment.”
While existing P3s have shown that they can increase competition in such areas as facility design and construction, more competitive benefits would come in areas such as facility finance, maintenance, expansion and operation with the expansion of P3s, according to Geddes. To the relatively common claim that P3s decrease public control over critical transportation assets, Geddes argues that properly structured, they can improve public control and oversight, compared to roads that are publicly owned and operated.
“Some observers also assume that P3s can only be used on facilities that generate enough toll revenue to make them profitable. This is false,” Geddes writes. “Even if a facility loses money, competitive bidding through P3s ensures that the public pays the least possible subsidy required to keep it in operation – an approach that has been used in other countries. Noting that “much of America’s federal transportation spending today is directed by political calculations rather than by benefits to motorists and taxpayers,” Geddes argues that private money will go to high-volume needs because that’s where the return is. This approach would surely worry rural politicians and others who have few roads to attract investors, although the author’s “least possible subsidy model” may work in these cases. It would also massively upset the ubiquitous earmarkers in Congress who would rather have the money arrive in a grateful community with their name emblazoned on the bag.
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