Can Sean Duffy’s New USDOT Transportation Order Bring Economic Growth?
For years, Strong Towns has called for a fundamental shift in how the federal government approaches transportation spending, particularly in how it influences our development patterns. Both major parties have, in different ways, been hesitant to implement the kind of meaningful reforms needed to create financially productive, resilient places — ones that support long-term prosperity rather than just short-term economic stimulus.
Instead, the status quo has persisted — one where projects are driven by short-term political cycles rather than long-term financial viability. Costly highway expansions continue to burden local budgets, while transit projects face layers of bureaucratic hurdles that often prioritize process over results. The push for shovel-ready projects, perpetual road widening, and the rapid spending spree of the Bipartisan Infrastructure Law all exemplify this approach.
Now, a new order from the U.S. Department of Transportation (DOT) is proposing a markedly different approach. If implemented, it could deliver long-overdue reforms, the kind Strong Towns has long supported. However, the specifics raise serious concerns.
Are we truly advancing meaningful reform, or are we merely exchanging one flawed top-down system for another?
A New Approach for Economic Prosperity — or A “New” Status Quo?
The DOT order emphasizes the need for economic analysis and financial justification in transportation policies and programs, stating that the Department shall ensure that all transportation policies, programs and activities are “based on sound economic principles and analysis supported by rigorous cost-benefit requirements and data-driven decisions." On the surface, this aligns with our long-standing call for sound economic decision-making in infrastructure investment. If this order results in transportation dollars being spent in places where projects have a real chance of generating wealth and improving long-term financial stability, it will be a welcome change.
For example, with the I-49 Connector in Shreveport, Louisiana, economic studies projected massive benefits, ignored long-term liabilities and used financial gimmicks to justify the spending. These reports exaggerated job creation estimates, equated tiny amounts of saved time with huge financial windfalls, and cherry-picked equations that supported more driving — while ignoring equations in the same report that showed diminishing returns. All of this was done to make the project appear more financially viable than it actually was. This kind of thing needs to end.
Or, take the smaller case of McGilchrist Avenue. Salem, Oregon, is set to spend $15.2 million on an "improvement" project, supplemented by $13.2 million in federal grants, with claims of boosting economic development and walkability. The assumed economic benefits rely on nonsensically speculative levels of redevelopment. The city's own benefit-cost analysis projects an increase in property values of $19.3 million, an amount that will (optimistically) take decades to achieve yet still be insufficient to recoup the city's investment. This makes McGilchrist merely another example of how federal funding steers cities toward large, costly projects instead of small, productive investments.
Overstating economic benefits while downplaying costs and risks is a deeply embedded approach that has plagued transportation spending for decades. We applaud the notion of using "sound economic principles," but that will mean deep institutional changes, not just a different way of abusing flawed but accepted practices.
Marriage, Birth Rates and Infrastructure Funds
Parts of the order hint at unseriousness. Among them is the directive that the Department shall “give preference to communities with marriage and birth rates higher than the national average." This is an unusual framework, to say the least, one that correlates less with financially sound investment and more with party politics.
Recent data shows that Republican-leaning states tend to have higher birth and marriage rates, while Democratic-leaning states tend to have lower rates. States such as Utah, Nebraska and Texas lead the nation in both birth rates and marriage rates, while states like Vermont, Maine and Connecticut rank among the lowest. If transportation investment decisions are tied to these trends, it could result in a policy shift that de-emphasizes productive urban development in favor of highway expansion in growing suburban and rural regions. That shift is the opposite of financially sound.
There are potential justifications for considering demographic trends in long-term infrastructure planning. After all, areas with higher birth rates may see population growth that requires expanded infrastructure. However, using birth and marriage rates as a primary investment criterion overlooks the fact that many low-birthrate states have dense and highly productive urban centers. If this new framework shifts funding away from investments in these areas, it is a signal that this order is more about handouts for friends and family than making productive investments in broad American prosperity.
The Potential Shift in Transit Funding
In "Confessions of a Recovering Engineer," I am highly critical of the way the federal government funds transit projects. Our current approach treats transit as a "charitable overlay to a dysfunctional auto-based transportation system." For most places, it is an afterthought. That is unfortunate because, as I argue in "Confessions," transit should be the greatest wealth accelerator for our cities. Transit funding needs reform, for sure. But again, shifting transit funding from major urban areas to smaller cities and rural communities feels more like partisan patronage than a sound investment approach.
One of the most significant concerns is how this order will impact the Federal Transit Administration’s Capital Investment Grant (CIG) program. The order directs the Department’s Operating Administrations to “update and revise all Notices of Funding Opportunity” and to “review their existing grant agreements, loan agreements, and contracts, and, to the extent permitted by law, unilaterally amend the general terms and conditions as necessary” to comply with the new direction.
Traditionally, this program has provided funding for transit projects based on factors such as projected ridership, cost-effectiveness and long-term economic impact. Those existing criteria have led to a lot of bad projects and wasted investment — a lot of transit stops at park-and-rides, behind big-box stores and in stagnant neighborhoods that are opposed to adding any additional housing. Even so, a new focus on demographics isn't the starting point for a shift to productivity, especially if the favored demographics are found in smaller towns and more rural areas.
Achieving economic sustainability is the right objective, but it will require not just different projects but also a different federal relationship with cities. Transit investments can't be funded primarily to juice federal GDP numbers. They have to be done to make cities strong, resilient and financially productive. To make that happen, the federal government needs to give cities more tools, not less. If we want transit systems to be economically sustainable, the U.S. DOT should be devolving more than redirecting.
The Future of the Highway Trust Fund
A serious conversation about reforming transportation spending must acknowledge the growing call to eliminate the Highway Trust Fund. This fund, established in 1956 to finance the initial construction of the Interstate Highway System, has long outlived its founding purpose. Originally meant to fund system expansion, it now fuels a system that prioritizes adding new roads over maintaining existing infrastructure, burdening local and state governments with unsustainable financial liabilities in the process.
The Highway Trust Fund has run persistent deficits since 2008, with gas tax revenue now covering only a fraction of transportation spending. Instead of confronting this unsustainable trajectory, federal policymakers repeatedly bail out the fund with general tax revenue, further entrenching an outdated funding model that encourages expansion rather than productivity. This cycle has distorted transportation priorities, pushing cities and states toward projects that promise federal dollars instead of those that deliver lasting economic value.
If this new DOT order signals a shift toward political favoritism and unsound economic principles, then eliminating the Highway Trust Fund should be broadly seen as the necessary response. Let's defund this craziness.
Conversely, if the order leads to genuine reforms — focusing on making better use of existing infrastructure and prioritizing financially productive projects — then the need for a dedicated federal expansion fund diminishes. Either way, the continued existence of the Highway Trust Fund is increasingly difficult to justify in a world where maintenance and optimization, not expansion, should be the priority.
We’ll See if This Fixes Our Broken Infrastructure Spending
Ultimately, this U.S. DOT order suggests a non-traditional approach to transportation investment. In itself, that is not necessarily a bad thing. Given how broken our infrastructure funding model has been, any effort to rethink priorities is worth examining. However, the real test of this policy will be whether it produces better outcomes. Does it lead to more productive, financially viable transportation investments? Or does it merely shift the same broken funding model to different locations?
We’ll be watching closely to see how this plays out. Strong Towns has long advocated for reforms that focus on financial productivity and incremental, small-scale investment — regardless of political considerations. If this order aligns with those principles, it could be a step in the right direction. If it doesn’t, it will just be a new way to make old mistakes.
Charles Marohn (known as “Chuck” to friends and colleagues) is the founder and president of Strong Towns and the bestselling author of “Escaping the Housing Trap: The Strong Towns Response to the Housing Crisis.” With decades of experience as a land use planner and civil engineer, Marohn is on a mission to help cities and towns become stronger and more prosperous. He spreads the Strong Towns message through in-person presentations, the Strong Towns Podcast, and his books and articles. In recognition of his efforts and impact, Planetizen named him one of the 15 Most Influential Urbanists of all time in 2017 and 2023.