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Economics

Clinton’s Budget Director Backs Congestion Pricing, VMT Tax

Alice Rivlin, now at the Brookings Institution, is one of the capital's most experienced economic hands.

rivlina_portrait.jpgAlice Rivlin (Photo: Brookings)

She served as the founding director of the Congressional Budget Office (CBO) and former President Clinton's budget director before moving on to become vice chairman of the Federal Reserve. During the economic stimulus debate earlier this year, Rivlin was among the few voices pushing for strong long-term infrastructure investment that would be tackled separately from short-term spending.

So it's reasonable to ask how Rivlin would approach the federal government's transportation funding crisis. And she answered the question yesterday during a legal conference. The Bond Buyer, a trade newspaper, put her remarks near the end of a related story (emphasis mine):

[Rivlin] argued on an earlier panel that major metropolitan areas, ratherthan state or local governments, should play a key role in financingand executing major infrastructure projects.

Metro areas are the focal points of the nation’s economy, she said,pointing out that while the 100 largest metropolitan areas nationwideaccount for just 12% of the land nationwide, they contain 65% of thecountry’s population and produce more than 75% of its gross domesticproduct. ...

Furthermore, she said the nation needs to overhaul how it financesits infrastructure needs, calling the gas tax flawed and increasinglyoutdated as consumers turn more and more to fuel-efficient vehicles.

“We need a major shift in the financing methods for roads andtransit to incent efficiency and send stronger price signals,” she said.

Instead, infrastructure needs should be funded by a vehiclemiles-traveled tax in conjunction with fees imposed on drivers usingcongested roads during peak travel times, she said.

Given Congress' increasing resistance to tackling tough problems, it's unlikely that Rivlin's advice will be heard immediately on Capitol Hill. But her endorsement of those solutions is a pretty good sign.

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