The Department of Transportation subsidizes and regulates highways, airports, air traffic control, urban transit, passenger rail, and other activities. However, taxpayers and consumers would be better off if many activities were privatized, which has been a worldwide trend. Opening up the financing and operation of transportation infrastructure to the private sector would save money, spur innovation, and reduce congestion.
The department will spend about $78 billion in 2016, or about $620 for every U.S. household. After adjusting for inflation, spending has increased 32 percent since 2000. The department employs 56,000 workers.
- Highways. Highway aid gets misallocated and federal interventions raise costs. Federal aid and fuel taxes should be ended, and the states should pursue toll highway projects with the private sector.
- Urban Transit. The federal government spends billions of dollars a year on urban rail systems even though buses are often more efficient. Without federal subsidies, cities would make better choices for their local transit needs.
- Air Traffic Control. The bureaucratic Federal Aviation Administration has struggled to modernize our air traffic control system. The system should be privatized as a self-funded nonprofit organization, along the lines of Canada’s successful reforms.
- Amtrak. Government-run railroads don’t work due to political meddling, high labor costs, and poor management. Amtrak should be privatized to provide more efficient service on routes that make economic sense.
- High-Speed Rail. Policymakers are subsidizing high-speed rail even though foreign systems are money losers and carry only a small share of intercity passengers.
James Madison, March 3, 1817. Veto of federal transportation spending.