Well first congestion isn't linear to vehicle miles. In traffic movement small things have a massive knock on effect. On my daily route to work I see the effect that adding just a few more cars to a road does. Adding 5% more cars doesn't increase congestion by 5% it actually brings traffic to a standstill where it was moving at an effective pace before.
Adding extra capacity can even make the problem worse because of what happens when increased capacity meets lower capacity. Human driver are terrible at going from two lanes down to two. You could say that this is bad design but in cities especially there are constraints that you can't really design around very easily without destroying massive parts of the city. This was done in the past to allow highways to penetrate right into cities but those highways just slowed to a crawl.
As for cost effectiveness bike lanes are a lot cheaper than extra road lanes and very much cheaper than elevated highways. Bus rapid transit is also extremely cheap. That's before you start looking at other cost benefits such as increased health for more exercise and less pollution.