Budgeting for Capital Investment: Testimony Before the U.S. House of Representatives Committee on Transportation and Infrastructure


Publication Date: June 2008

Publisher: Tax Policy Center

Author(s): Rudolph G. Penner

Research Area: Government

Keywords: Economy; Federal Budgets & Fiscal Policy; Taxes, the Budget, and the Economy; Budget Issues

Type: Report


The unified budget of the U. S. government is, in most respects, a cash budget. It is somewhat biased against public investment, because the benefits of such investments accrue over a period of time whereas the cash outlay is immediate. This testimony looks at options for directing more funds to highways, mass transit, and other public investments. It examines higher fuel taxes, tolls and congestion fees; capital budgeting; infrastructure banks; a capital revolving fund; public-private partnerships; and approaches to improving the efficiency of current grants and subsidies. It concludes that tolls and congestion fees are very promising as are public-private partnerships. A capital revolving fund would be useful for agencies that only invest occasionally. A capital budget and infrastructure banks are less desirable.