rated: the fraction of all travel on freeways and principal arterial streets that is in congested conditions increased from 34 to 40 percent between 1987 and 2000 in urban areas with populations exceeding 3 million and from 18 to 22 percent in urban areas with populations under 500,000.

The 2002 study projected the effects of alternative rates of highway capital expenditure on highway user costs (travel time, vehicle operating costs, and accident costs) over the period 2001–2020. In the projections, the future level of highway travel depends on the cost of travel. The projections indicated that, if all highway capital projects nationwide with a benefit–cost ratio greater than 1 were carried out, annual capital spending would average $107 billion (in 2000 dollars). To maintain overall conditions and performance at 2000 levels, annual capital spending of $76 billion would be required, 17 percent above actual capital spending of $65 billion in 2000. The latter estimate suggests that the present spending level plus normal growth in spending may be nearly sufficient to maintain performance to 2020. The estimated discrepancy between actual and maximum justified spending in the 2002 report was somewhat less than in the previous report (USDOT 2000). The reduction presumably reflects the increased rate of highway spending in the late 1990s.

The 2002 report did not present estimates of returns on investment. However, the previous report estimated that if all projects with benefit–cost ratio greater than 1 were carried out over the 20-year period 1998–2017, the average benefit–cost ratio would be 3.7 (USDOT 2000). The projections showed that, at all spending levels analyzed up to the maximum economically justified level, congestion will be little improved. The fraction of urban travel that is under congested conditions increases by 2020, although annual hours lost to congestion per driver fall slightly at the higher spending levels (USDOT n.d., 9-8).

The Conditions and Performance studies also compare the mix of kinds of projects that USDOT estimates would be most beneficial with the mix that highway agencies have been carrying out in recent years. The 1999 study concluded that benefits would be increased if agencies shifted spending from capacity expansion to system preservation. The 2002 report, attributing the change in part to large investments in preservation starting in the mid-1990s, concluded the opposite—that the mix should now be shifted to expansion (USDOT n.d., iii).

The USDOT model used to produce these projections has been critiqued by a Transportation Research Board committee (TRB 2003, 56–58, 127) and by the General Accounting Office (GAO 2000), which concluded that the studies have value for the purposes intended. The model also was relied upon by the Congressional Budget Office to analyze highway spending effectiveness (CBO 1988, 4–20). CBO prioritized categories of highway investment in terms of national average rates of return (in the 1980s) as follows: projects to maintain current conditions, 30 to 40 percent annual rate of return; new construction in urban areas, 10 to 20 percent; projects to fix roads not meeting minimum engineering

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