Investing in Transportation to Escape the Energy Trap

America's vast transportation network -- roads, bridges, and railways -- is in dire straits, marked most notably by a huge backlog of repair needs and not enough government funding to fix the problems. There's simply not enough public money for transportation and politicians remain reluctant to raise the gasoline tax.

Since 1993 the gas tax, which feeds into the National Highway Trust fund for highway projects, has stood at 18.4 cents a gallon. Here's an interesting fact: According to the Bureau of Labor Statistics, adjusted for inflation the gas tax would need to be 29 cents a gallon to buy what it did back then. Not gonna happen. Why? Largely because of anti-tax fervor among elected officials these days, making the very rational case for raising more revenue for transportation from higher user fees at the pump one of the few things that both the White House and Congress agree upon.

Even without the propect of a higher gas tax people are still paying a lot at the pump, which is especially tough during this recession. According to a new report from the New America Foundation entitled The Price-Induced Energy Trap: Exploring the Impacts of Transportation Expenditures on the American Economythe total cost of gasoline purchases by consumers will rise this year by almost 25% -- from $391 billion to $489 billion (despite a projected 1.8% decline in gasoline consumption). So, even with drivers paying for less gas overall, they'll still be paying more because of the high cost of gasoline. In fact, Americans will spend $100 million more on gasoline this year than we did in 2010. 

This is what the New America Foundation calls "the energy trap" -- and its having an impact American consumers and businesses alike. Gas prices represent a persistent drain on family budgets. As the report states:

"Gasoline and transit spending isn't fair. As you'd expect, wealthier families spend a smaller percentage of their income of gasoline than those with less money. But the cost of getting to work doesn't fall evenly across the income spectrum. Using preliminary data from our survey of 2000 households, cut up by income levels, it's clear that some working households drive further, in less efficient cars, and need more car repairs than those with more money. Some families squarely in the middle appear to pay higher insurance costs than those richer and poorer than them. trap -- the necessity of buying gasoline -- hits households at different income levels in unique ways."

Certainly middle class families feel the pinch when filling up at the pump, but lower-income Americans can find themselves priced out completely. Think of it as another significant factor in the “great divide” since transportation from affordable housing locations to work locations is often too pricey, reducing job opportunities and worker opportunities for business. As the New America Foundation's report makes clear: the lack of low-cost transportation options to driving is the cause of this inelasticity of demand. And the energy trap is driving up costs of transportation, making the U.S. less productive and globally competitive.

What America needs then is a more redundant, robust, resilient, and reliable transportation system to compete in the global economy. If Congress and the president fail to invest in building such a system, our energy costs for transportation will continue to rise, low income households will suffer even more, and we will lose global market leadership. The New America Foundation offers a solution aimed at avoiding the energy trap:

"There's a clear opportunity for policies to help working families, or communities with high costs of transit, reduce the total cost of their transit spending. Ranging from programs to make efficient vehicles more affordable, to increasing transit options, such programs could also include local initiatives to help people repair their cars."

This aspect of the report reminded me of the misguided view of many people who rely soley on their cars to get around. They wonder why federal funding should be devoted to any transportation projects other than highways. In other words, why "waste" limited resources on trains, buses or bike lanes? U.S. Transportation Secretary Ray LaHood recently provided the perfect response to this very question:

"We simply can’t have everyone using the same way of getting around. If we did, our trains and buses would be packed like sardine cans, or our roads would be impassable with congestion, or pedestrians would be overrun by bicyclists. Investing in transit helps take cars off the road; that actually benefits those who choose to drive or bike. And the plain truth is that people in this country like their cars; I still remember my own first car with more than a little fondness. The Obama administration has worked hard to help our cars get better gas mileage and operate more cleanly, and so we will continue needing good, well-maintained roads for many years to come. Everywhere I go, people tell me they want more options for getting around, not fewer, and that’s what we’re trying to do."

The New America Foundation echoed this view in its report in a section entitled "Cars Mean More Cost, Less Freedom":

"Cars have always symbolized -- and provided -- a certain kind of freedom for Americans. But that may be changing...Most of what [survey respondents] said didn't have much to do with their cars per se, but with their implications: Costs, gasoline, parking, traffic, and the cost of repairs. The cars, in other words, seemed to trap their income."

Sure, most people love their cars yet everyone loathes the hassles of driving, such as poor roads and heavy traffic. By finding the political will to fund needed investments in America's transportation infrastructure, drivers will benefit along with commuters who travel by train, bus or bike. Let's get moving.