Zero-Based Transportation Policy: Recommendations for 2021 Transportation Reauthorization

24 Pages Posted: 22 Apr 2021

Date Written: March 16, 2021


The devastating effects of the COVID-19 pandemic and associated lockdowns on various forms of transportation create an opportunity to review the successes and failures of federal transport policies before Congress reauthorizes federal highway and transit programs. After a one‐​year extension approved by Congress in September 2020, authorization for these programs will expire on September 30, 2021.

A close look at federal transportation programs reveals that user‐​fee‐​funded systems work far better than projects funded by subsidies or deficit spending. User‐​fee‐​funded infrastructure tends to be much better maintained than infrastructure funded by subsidies. Subsidies, meanwhile, take away the incentive for transportation managers to innovate or improve productivity. Worker productivity in urban transit, for example, has declined by more than 55 percent since Congress began funding transit in the 1960s.

The Interstate Highway System is the most successful megaproject in history, partly because it was built on a pay‐​as‐​you‐​go basis, being funded out of highway user fees only as those revenues were collected. This ensured that the roads were not built before they were needed (the way federally subsidized transcontinental railroads were) and so immediately produced enormous benefits as they were opened.

Another important lesson is that efforts to save energy, reduce pollution, and improve highway safety by getting people to drive less have failed miserably. Instead, we saved energy, reduced pollution, and improved safety by building more energy efficient, cleaner, and safer automobiles and safer roads. Efforts to reduce greenhouse gas emissions should similarly focus on building cleaner cars, not trying to reduce driving.

The COVID-19 pandemic highlights the need for a resilient transportation system, and motor vehicles and roads have proven far more resilient than any form of mass transportation. Unlike mass transportation, which requires continuing inputs of labor and funds, roads are available when they are needed even if a recession or other economic shock reduces revenues to highway agencies. Roads have also proven to be the best way to evacuate people and deliver rescue and recovery services in the event of natural disasters. “Road diets” and other programs that reduce roadway capacities are reducing the resiliency of our transportation system.

After elaborating on the data and arguments above, this paper concludes with specific recommendations for the 2021 surface transportation reauthorization.

Keywords: COVID-19, transportation, coronavirus, pandemic, transit funding, Department of Transportation, federal transport policies, federal highway, highway safety, pandemic highlights

JEL Classification: R10, R11, R13, R19, R40, R41, R42, R48, R49

Suggested Citation

Institute, Cato and O'Toole, Randal, Zero-Based Transportation Policy: Recommendations for 2021 Transportation Reauthorization (March 16, 2021). Cato Institute, Policy Analysis No. 913 (2021), Available at SSRN:

Cato Institute (Contact Author)

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

Randal O'Toole

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

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