Federalism Issues in Surface Transportation Policy: Past and Present

Robert Jay Dilger
Senior Specialist in American National Government

American federalism, which shapes the roles, responsibilities, and interactions among and between the federal government, the states, and local governments, is continuously evolving, adapting to changes in American society and American political institutions. The nature of federalism relationships in surface transportation policy has also evolved over time, with the federal government’s role becoming increasingly influential, especially since the Federal-Aid to Highway Act of 1956 which authorized the interstate highway system. In recent years, state and local government officials, through their public interest groups (especially the National Governors Association, National Conference of State Legislatures, National Association of Counties, National League of Cities, U.S. Conference of Mayors, and American Association of State Highway and Transportation Officials) have lobbied for increased federal assistance for surface transportation grants and increased flexibility in the use of those funds. They contend that they are better able to identify surface transportation needs in their states than federal officials and are capable of administering federal grant funds with relatively minimal federal oversight. They also argue that states have a long history of learning from one another. In their view, providing states flexibility in the use of federal funds results in better surface transportation policy because it enables states to experiment with innovative solutions to surface transportation problems and then share their experiences with other states. Others argue that the federal government has a responsibility to ensure that federal funds are used in the most efficient and effective manner possible to promote the national interest in expanding national economic growth and protecting the environment. In their view, providing states increased flexibility in the use of federal funds diminishes the federal government’s ability to ensure that national needs are met. Still others have argued for a fundamental restructuring of federal and state government responsibilities in surface transportation policy, with some responsibilities devolved to states and others remaining with the federal government.

Congressional attention to federalism issues in surface transportation policy tends to increase during reauthorizations of the federal highway and mass transit program. The current highway and mass transit program, the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2005: A Legacy for Users (SAFETEA; P.L. 109-59), after being extended several times, is set to expire on September 30, 2011. Its reauthorization is expected to generate considerable legislative activity during the 112th Congress. Issues addressed by Congress in the recent past, and expected to receive continued attention, include SAFETEA’s funding level and financing, especially proposals addressing the Highway Trust Fund’s fiscal sustainability, state funding guarantees, and congressional earmarks.

This report provides an historical perspective on contemporary federalism issues in surface transportation policy that are likely to be addressed by Congress during the 112th Congress, including possible devolution of programmatic responsibility to states and proposals to change state maintenance-of-effort requirements and state cost matching requirements.


Date of Report: April 20, 2011
Number of Pages: 39
Order Number: R40431
Price: $29.95

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Railroad Access and Competition Issues

John Frittelli
Specialist in Transportation Policy

Beginning in the late 1970s, Congress gave railroads flexibility to set rates and to enter into confidential contracts with their customers. Over the last decade, large railroads have consolidated and, particularly in recent years, have achieved higher profitability. These changes have left some bulk shippers, particularly those that claim to be “captive” to a single railroad, frustrated with what they perceive as poor rail service and exorbitant rates. “Captive shippers” claim that the railroad serving them acts like a monopoly—charging excessively high rates and providing less service than they require.

Such complaints have led Congress to consider whether the present, largely deregulated, regime should be revised to accommodate the interests of “captive shippers.” A major point of contention is whether current railroad industry practices should be changed to guarantee such shippers more railroad routing options. Legislation, supported by captive shippers and opposed by the railroads and other shippers, failed to reach the floor of either the House or Senate in the last Congress, and has been reintroduced in the 112th Congress (S. 49 and S. 158).

In the wake of renewed congressional interest, the Surface Transportation Board (STB or Board), successor agency of the Interstate Commerce Commission (ICC), is reviewing its policies with respect to railroad access and competition issues. It announced a hearing on “bottleneck rates” and “competitive access” matters. Changes in these policies might benefit some shippers of bulk products, such as coal and grain, but could be disadvantageous to shippers of other products, such as maritime containers and domestic truck trailers, that want railroads to maintain high levels of investment in order to provide fast, reliable service for high-value shipments.

The captive shipper issue has wider economic implications than just the division of revenue between railroads and their customers. Higher fuel prices, congestion on certain segments of the interstate highway system, and rising domestic and international trade volumes are driving shippers to demand more rail capacity. Freight revenues are a significant means of financing rail capacity because the railroads receive negligible public financing. If it acts in this area, Congress would face consideration of how a legislated or regulatory solution to the “captive shipper” problem would affect the development of a more robust and efficient railroad system.


Date of Report: April 4, 2011
Number of Pages: 16
Order Number: RL34117
Price: $29.95

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Transportation, Housing and Urban Development, and Related Agencies (THUD): FY2011 Appropriations

David Randall Peterman
Analyst in Transportation Policy

Maggie McCarty
Specialist in Housing Policy

President Obama requested a total of $123.7 billion for FY2011 for the Department of Transportation, the Department of Housing and Urban Development, and the related agencies that are funded through the annual Transportation, Housing and Urban Development, and Related Agencies Appropriations (THUD) act. This request represented an increase of approximately $1.6 billion (1.3%) over the $122.1 billion provided in the FY2010 THUD appropriations act.

During the second session of the 111th Congress, the House passed an FY2011 THUD appropriations bill (H.R. 5850) that would have provided $126.4 billion (3.5% over the FY2010 enacted level). The Senate did not pass an FY2011 THUD appropriations bill; the Senate Committee on Appropriations reported out an FY2011 THUD appropriations bill (S. 3644) that recommended $122.8 billion (less than 1% over FY2010). In the absence of passage of a THUD appropriations act for FY2011, Congress has provided funding for the THUD agencies (and other government agencies) through a series of continuing resolutions (CRs). The 111th Congress provided funding through March 4, 2011 (P.L. 111-322), at roughly FY2010 funding levels.

The 112th Congress resumed the FY2011 appropriations process, with the House under new leadership and expressing an intent to reduce non-security-related federal discretionary spending. With only a little over half of FY2011 left when the March 4 CR expired, and the budget request for FY2012 already submitted, debate over FY2011 appropriations shifted to the question of how much would be cut from the current total discretionary funding level. On February 18, 2011, the House passed H.R. 1, a bill to fund the government for the remainder of the fiscal year, which would have cut discretionary funding not only below the FY2011 requested level but also below the FY2010 enacted level. It would have provided $108.0 billion in total budgetary resources for THUD, 11% below the FY2010 enacted level. On March 9, 2011, the Senate considered, but failed to pass, both H.R. 1 and a Senate amendment to H.R. 1 (S.Amdt. 149) that would have cut total discretionary funding below the FY2011 request but left it above the FY2010 enacted level. It would have provided $118.3 billion for THUD, 3% less than the FY2010 enacted level. For the Department of Transportation (DOT), the President’s FY2011 budget requested a total of $77.7 billion. That was $2.0 billion (2.6%) above the $75.7 billion provided for FY2010. The House-passed H.R. 5850 (111th Congress) would have provided $79.4 billion ($3.7 billion over FY2010); the 111th Congress’s Senate Committee on Appropriations recommended $75.8 billion ($0.1 billion over FY2010). In the 112th Congress, H.R. 1 would have provided $68.3 billion ($7.4 billion below FY2010); S.Amdt. 149 would have provided $73.7 billion ($2.0 billion below FY2010).

For the Department of Housing and Urban Development (HUD), the President’s FY2011 budget requested about $45.6 billion in net new budget authority, a decrease of about 1% from the FY2010 enacted level. However, the requested decrease in net new budget authority actually represented a 3% increase in new funding for HUD programs, as the overall increase in appropriations would have been more than offset by a substantial increase in offsetting collections and receipts, which were expected to come from proposed changes to the Federal Housing Administration (FHA) mortgage insurance programs. Both the FY2011 House and Senate bills in the 111th Congress would have provided a 5% increase over FY2010 in appropriations for HUD programs in aggregate. In the 112th Congress, H.R. 1 would have provided $38.6 billion (about $7 billion below FY2010). S.Amdt. 149 would have provided $44.9 billion (over $1 billion below FY2010).


Date of Report: April 7, 2011
Number of Pages: 34
Order Number: R41492
Price: $29.95

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Earthquake Risk and U.S. Highway Infrastructure: Frequently Asked Questions

William J. Mallett
Specialist in Transportation Policy

Nicole T. Carter
Specialist in Natural Resources Policy

Peter Folger
Specialist in Energy and Natural Resources Policy

The 9.0 magnitude earthquake that struck off the coast of Sendai, Japan, on March 11, 2011, has renewed concerns about the seismic risk to America’s infrastructure, including its highways. Concerns about the U.S. highway system’s seismic risk stem from interest in protecting public safety, facilitating response and recovery efforts, and minimizing economic loss and social disruption. Seismic resilience of the U.S. highway system has improved in recent decades as investments have been made to build new, more resilient infrastructure and to retrofit existing structures. However, not all existing highway infrastructure has been retrofitted, and no infrastructure can be cost-effectively constructed to be immune from the most intense earthquakes, so some seismic risk to the U.S. highway system remains.

Although earthquake hazards in the United States generally are well documented, little national or federal data exist about the seismic risk to U.S. highway infrastructure; instead, seismic highway risks typically are assessed and addressed by state and local entities which are generally responsible for building and maintaining that infrastructure. The federal government supports these nonfederal efforts by providing data on the seismic hazard for different locations, assisting in the development of construction standards and guidelines, and undertaking research, training, and the development of tools to assist in risk reduction. In limited circumstances, the federal government invests directly in improving resiliency of specific highway structures.

This report addresses frequently asked questions about the risk from earthquakes to highway systems, including bridges, tunnels, pavements, and other highway components. Particular attention is given to highway bridges, which often are the most vulnerable highway structures.1 The report also discusses federal and nonfederal actions to reduce seismic risk to the U.S. highway system.

Japan is generally regarded as the country with the most earthquake-resilient infrastructure. Research into the performance of Japan’s highway structures and systems during and after the massive Sendai earthquake and resulting tsunami is ongoing. Japanese and U.S. earthquake science and engineering researchers have well-established collaborations aimed at gathering empirical data and drawing lessons from significant events. It is too soon to know how the events in Japan will affect understanding of the seismic risk of U.S. highway infrastructure, and whether changes in U.S. seismic highway design standards and guidance will result.


Date of Report: March 30, 2011
Number of Pages: 10
Order Number: R41746
Price: $29.95

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