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 March 4, 2011. Its reauthorization generated considerable legislative activity during the 111th Congress. Issues addressed by Congress 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: January 5, 2011
Number of Pages: 39
Order Number: R40431
Price: $29.95
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Glennon J. Harrison
Specialist in Industry Policy
Michaela D. Platzer
Specialist in Industrial Organization and Business
U.S. production of passenger vehicle and light truck tires has undergone significant change over the last two decades. What was once considered a major U.S. manufacturing sector is now part of a global industry that is largely controlled by foreign-headquartered corporations. The top four global tire companies, accounting for 49% of worldwide tire sales in 2009, included only one U.S.-headquartered company: Goodyear Tire and Rubber Company. Confronted with sharp declines in output, employment, and the number of plants in the consumer tire sector, numerous members of Congress have expressed concerns about the future of tire manufacturing in the United States.
The market for passenger vehicles and light truck tires is actually two distinct markets. Original equipment (OE) tires are sold to vehicle manufacturers rather than consumers and are usually tailored to car manufacturers’ specifications. The vast majority of OE tires used on Americanmade vehicles are made in the United States in order to reduce carmakers’ supply-chain risks and to protect the tire manufacturers’ proprietary production processes. U.S. production of OE tires can be expected to recover along with domestic light-vehicle output. However, increasing automation is allowing tire manufacturers to meet OE demand with fewer plants and fewer workers.
The larger portion of the consumer tire market involves replacement tires that are sold to consumers through various retail channels. Tire manufacturers have increasingly moved production of replacement tires from the United States to Asia, especially China, as imports undercut sales of domestically produced tires. Chinese production capacity far exceeds Chinese domestic demand for tires, and China has pursued an aggressive export agenda.
In response to a petition filed by the United Steel Workers with the U.S. International Trade Commission, the Obama Administration imposed punitive tariffs on Chinese tires for three years, starting in September 2009. A World Trade Organization (WTO) panel determined in December 2010 that the U.S. tariff measures were in compliance with its WTO obligations. The higher tariffs have caused an increase in imports of low-cost tires from countries other than China, notably Thailand and Mexico, but have not led manufacturers to shift production back to the United States.
Congress appears to have few policy levers with which to support tire manufacturing in the United States. To the extent that government policy encourages domestic production of small vehicles, most of which are now imported, there may be additional demand for U.S.-made OE tires. More stringent federal standards for tires also might encourage domestic production, albeit at the cost of higher prices for consumers. However, it seems unlikely that U.S. factories will return to large-scale production of low-cost replacement tires.
Date of Report: December 27, 2010
Number of Pages: 31
Order Number: R41551
Price: $29.95
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Robert S. Kirk
Specialist in Transportation Policy
William J. Mallett
Specialist in Transportation Policy
David Randall Peterman
Analyst in Transportation Policy
Earmarks—formally known as congressionally directed spending—have directed a significant amount of federal transportation spending in recent years. Proposals to ban earmarks in authorization and appropriations bills are under consideration in both houses of Congress. This report discusses how federal highway, transit, and aviation funding might be distributed under an earmark ban, and how members of Congress might influence the distribution.
Currently, about 80% of federal highway funds and 70% of transit funds are distributed by formulas set forth in statutes. The distribution of formula highway funds is under the control of the states. The bulk of formula transit funding is under the control of local governments and public transit agencies. Most federal funding for aviation is for operation of the air traffic control system and safety-related programs and is generally not earmarked. Most aviation infrastructure spending is distributed according to priorities set forth in national plans, but a small percentage is available for earmarking. Federal funding for maritime purposes is directed by statute and is not earmarked.
Most of the remaining federal transportation funding is distributed under discretionary programs. U.S. Department of Transportation (DOT) discretionary funds are typically distributed through a competitive grant-making process, within guidelines established by Congress and the department. In practice, however, much of this funding has been earmarked by Congress in recent years. The precise share of federal transportation dollars that is spent on earmarks cannot readily be calculated, but according to a DOT Inspector General report, in FY2006 approximately 13% of DOT’s total budgetary resources were earmarked.
Banning earmarks would not eliminate the opportunity for members to direct the allocation of transportation resources. The funding formulas and eligibility rules in authorization bills can be shaped to favor particular states, congressional districts, and projects. “Soft” earmarks can be used to identify a project as a congressional priority in appropriations bill report language apparently without violating an earmark ban, based on current House and Senate rules, by not specifying an amount of funding. Without earmarking, members could continue to call or write DOT in support of projects. Members may also seek to influence the priority a project receives under mandated state and local planning procedures, which can increase the likelihood of federal funding without an earmark.
Date of Report: January 3, 2011
Number of Pages: 15
Order Number: R41554
Price: $29.95
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John Williamson
Information Research Specialist
This report consolidates budget information on selected programs of the U.S. Department of Transportation (DOT): the Office of the Secretary of Transportation (OST); the Federal Aviation Administration (FAA); the Federal Highway Administration (FHWA); the Federal Motor Carrier Safety Administration (FMCSA); the National Highway Traffic Safety Administration (NHTSA); the Federal Railroad Administration (FRA); the Federal Transit Administration (FTA); the Research and Special Programs Administration (RSPA), which was split in 2004 into the Pipeline and Hazardous Materials Safety Administration (PHMSA) and the Research and Innovative Technology Administration (RITA); and the Maritime Administration (MARAD). The period covered, FY2000 through FY2010, provides information on the budget treatment of these programs during the last year of the Clinton Administration, the Bush Administration, and the first year of the Obama Administration. In addition to footnotes on each affected table, a separate table has been created to reflect program funding in the DOT under the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5, 123 Stat. 115). The data in this report, presented in a series of tables, provide an overview of spending trends for the period and information on congressional appropriations actions at the House, Senate, and conference committee levels.
Date of Report: December 2, 2010
Number of Pages: 24
Order Number: R41541
Price: $29.95
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Robert S. Kirk, Coordinator
Specialist in Transportation Policy
William J. Mallett
Specialist in Transportation Policy
David Randall Peterman
Analyst in Transportation Policy
John Frittelli
Specialist in Transportation Policy
Linda Luther
Analyst in Environmental Policy
James E. McCarthy
Specialist in Environmental Policy
Brent D. Yacobucci
Specialist in Energy and Environmental Policy
The law authorizing federal surface transportation programs expired at the end of FY2009, but Congress has failed to enact a new authorization. Surface transportation programs continue to operate on the basis of authority provided in extension legislation.
This situation should not be a surprise to those familiar with the history of the reauthorization process. Especially during the last two decades, reauthorization has become a difficult undertaking. This is primarily due to controversy over how and to whom federal-aid highway funds should be distributed. The most recent law, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU or SAFETEA) (P.L. 109-59), was enacted 22 months after previous legislation had originally expired. Previous reauthorization bills also were enacted well behind schedule.
The most difficult issue to be considered during reauthorization is how to finance it. The highway trust fund and the revenue sources that feed it have been a reliable mechanism for financing highway and transit programs for five decades, but this is no longer the case. Fuel taxes, which provide most of the money for surface transportation, are unlikely to provide a solid long-term foundation for this desired growth, even if Congress were to raise them modestly. The choice for policymakers, therefore, is to find new sources of income for an expanded program, or alternately to settle for a smaller program that might look very different from the one currently in place.
One perennial subject of debate concerning the highway program is whether grants to individual states are in line with the taxes those states’ motorists pay into the highway trust fund—the socalled donor-donee issue. The use of earmarks and possible programmatic reorganization will likely be prominent concerns in committee discussions of reauthorization. Specific programs, such as the Highway Bridge Program, can be expected to receive extensive congressional attention due to public concerns about the condition of the nation’s transportation infrastructure. Congress also can be expected to look closely at transit program spending levels and priorities.
Freight issues have also been of growing importance in recent years and figure to get significantly more attention as part of the reauthorization debate.
Date of Report: December 1, 2010
Number of Pages: 34
Order Number: R41512
Price: $29.95
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Document available via e-mail as a pdf file or in paper form.
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