WASHINGTON -- In these deficit-conscious times, Congress should not pour more money into developing transportation infrastructure, but rather should ensure that existing highways and airports are managed better to get more use out of them, two economists said Monday.
Their comments at an infrastructure financing symposium come amid signs that both the Clinton Administration and Congress have taken infrastructure issues off the front burner in the wake of the defeat last spring of President Bill Clinton's $16 billion infrastructure and job stimulus bill.
"The answer to congestion is not to spend more money" expanding highways and building new airports, said Barry Bosworth, a senior fellow at the Brookings Institute who was an economic adviser to President Jimmy Carter. "Most of the problem is a peak-load one. It really is a management problem."
Bosworth pointed out that travelers do not usually encounter delays during off-peak hours at airports or on the road. "The problem is, everyone wants to leave the city between 4 p.m. and 6 p.m.," he said.
"Americans want to live in the middle of nowhere and still have a trouble-free commute and be no more than 45 minutes from where they work," Bosworth added.
Better use could be made of the airports by charging the airlines and passengers more for the right to use the runways during rush hours, he said. But he acknowledged that such "congestion pricing" of the highways would be much more difficult to achieve, both practically and politically.
Charles Hulten, an economics professor at the University of Maryland, agreed that studies in recent years purportedly documenting the need for billions of dollars more in infrastructure spending have been overblown.
"If there is a crisis, it is a crisis of management," Hulten said.
While a case can be made for more capital spending, he said, the decline in infrastructure spending as a percentage of the gross domestic product in recent years has been due largely to such factors as the completion of the interstate highway system and the aging of the baby boom generation.
The country does not need to build new facilities so much as maintain the existing ones, Hulten said. "The solution is not to spend more money but to look at the way we spend it."
While politicians often point out that our chief economic competitor, Japan, spends far more on infrastructure, Hulten said Japan and other Far Eastern countries actually have achieved their high rates of economic growth despite inadequate transportation systems.
One speaker at the symposium disagreed with the economists' assessment, however. Rep. James Oberstar, D-Minn., the chairman of the House Public Works and Transportation Committee's aviation subcommittee, said the country faces an "urban apocalypse" of collapsing physical structures unless it puts dramatically more into capital spending.
Even passage in recent years of $50 billion for airport improvements and of the Intermodal Surface Transportation Efficiency Act of 1991, with its $150 billion for highways and mass transit, has hardly begun to put a dent in the problem, Oberstar said. He estimated that airport delays alone continue to cost the public and the airlines $7 billion a year.
Oberstar and several others at the symposium advocated the creation of a new category of tax-exempt infrastructure bonds as one solution to the underinvestment problem. He described such bonds as a "good idea" that would nevertheless be difficult to get through Congress.
Both Bosworth and Hulten ridiculed another solution proposed earlier this year by the Infrastructure Investment Commission: tapping $4 trillion of pension funds by creating a taxable infrastructure security to be issued by a national infrastructure bank.
"That seems to me to be the screwiest way of financing infrastructure," said Bosworth, because it would pull pension funds out of private investments at a time when the government should be encouraging private savings. A financing bank also is unnecessary in light of the "enormous advantage" state and local issuers already enjoy with their access to tax-exempt capital for infrastructure development, he said.
"If a large part of our crisis is due to mismanagement, I don't think we need a national infrastructure bank," Hulten said.