Last night, the Daily Caller unearthed a 2007 speech by Barack Obama in New Hampshire that was deemed a "bombshell." You can watch the speech here and judge for yourself, but we were struck by one line that the Drudge Report has been highlighting, in which Obama said, "We don’t need to build more highways out in the suburbs ..."

(Robert Thomson/The Washington Post)

It's not clear exactly what Obama meant by this — in context, he appears to be arguing for a shift to more investment in inner cities. But there's a policy proposal embedded in here that's worth a bit more discussion. Many transportation experts, both liberal and conservative, have been arguing against building more highways out into the suburbs for years. The idea is that we should generally focus our dollars on fixing and upgrading existing infrastructure rather than continuing to build sprawling new roads.

When it comes to infrastructure, politicians usually prefer shiny new projects over humdrum repairs. A brand-new highway is exciting: There’s a ribbon-cutting, and there’s less need to clog up existing lanes with orange cones and repair crews. So it’s not surprising that 57 percent of all state highway funding goes toward new construction, often stretching out to the suburbs, even though new roads represent just 1.3 percent of the overall system.

Many transportation reformers think this is a wrong-headed approach. Taxpayers for Common Sense, a conservative group in favor of rooting out government waste, has long argued that it doesn't make much sense to allocate so many scarce transportation dollars to new roads when, for example, 11.5 percent of the nation's 600,000 existing bridges are "structurally deficient” in some way. 

Last year, UCLA economist Matthew Kahn and the University of Minnesota’s David Levinson made a more detailed case for a “fix-it first” strategy. They noted that, at the moment, federal highway spending doesn't get subjected to strict cost-benefit analysis, and governments often build new roads when they arguably shouldn't. When a highway gets clogged, states find it more palatable to simply build new lanes rather than, say, put in place congestion fees — even though research has found that widening highways does little to alleviate traffic jams.

Among other things, there's a solid economic case for making repairs a much higher priority. As Kahn and Levinson explain, road pavement tends to deteriorate slowly at first but then more quickly over time. It’s much, much cheaper to repair a road early on, when it’s still in “fair” condition, than when it drops down to “serious” condition.  And that’s to say nothing of data suggesting that poor road conditions are a “significant factor” in one-third of all fatal crashes, and cause extra wear and tear on cars.

Kahn and Levinson also cite research by John Fernald showing that, although the initial productivity gains from the Interstate Highway System were very high, subsequent expansions have offered a much smaller boost. That's one piece of evidence suggesting that we're not seeing much economic gain from continuing to expand out into the suburbs.

Yet as president, Obama has pushed his preferred approach only halfheartedly — his American Jobs Act proposal contained about $50 billion in infrastructure spending, of which a good chunk, $27 billion, would go toward "rebuilding roads and bridges." And Congress has shown even less interest. Back in June, the House and Senate agreed on a 27-month, $120 billion highway bill that left out a provision pushing states to fix their existing bridges and roads first. More generally, the highway bill that Obama signed didn't do much to shift funding from suburban highways to inner-city transit.

In any case, this all might be reading too much into what Obama meant by his line. But there's a strong policy case that we could stand to build fewer new highways out to the suburbs, at least for the time being.

Related: For more on this, see Matt Yglesias, who makes a plug for both congestion pricing and urban freeway removal. Or see Mitt Romney, who was a huge fan of "fix-it-first" as governor of Massachusetts and had a number of creative ideas about promoting smart growth as an alternative to further suburban sprawl.