This is the Cato Daily Podcast for Friday, March 6, 2015.

I'm Caleb Brown. Federal startup funds for local rail projects encourage local governments

to start something new, even though it may mean less money to

spend on life-saving maintenance of existing transit.

Randall O'Toole is a senior fellow at the Cato Institute, he talks about the costs and

benefits of federal carrots to build new rail transit.

Well Congress gives almost $2 billion a year to cities to build rail transit and it's called the New Starts Fund and this two billion

dollars a year is the last big discretionary fund in the federal transportation programs.

By discretionary I mean that cities apply for the money and then the money goes to essentially

the politically most powerful cities.

Our data show that cities that have gotten rail transit funds get as much as eight times

more money per transit rider than cities that are content to

rely on buses alone.

But moreover, we found that if you have a Democrat in your state who's on the House Transportation

and Infrastructure Committee your state gets 120 to 160 million

dollars more per year than states that don't have Democrats.

If you have a Republican on the committee, you might get anywhere from negative 20 to 50 million

more per year, but in some years having a Republican actually meant you got

less money than not having a Republican on the House Transportation and Infrastructure

Committee.

So this money is highly politicized and it's highly inequitable.

So urban areas have discovered the way to get federal money is to design really, really expensive transit projects and then they

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