FAST Act Debrief: A Few Policy Notes on the Latest Highway Bill

Last Friday, December 4, President Obama signed into law the FAST Act, which reauthorizes federal surface transportation programs through Fiscal Year 2020 to the tune of $305 billion (about $61 billion annually). AASHTO has a detailed funding table here. You can see how much your state will receive for its highways here.

On funding, CEI has long urged Congress to adhere to the users-pay/users-benefit principle and to reject general fund bailouts of the Highway Trust Fund. The Highway Trust Fund traditionally funds the lion’s share of surface transportation. Under the FAST Act, the Highway Trust Fund’s share of total federal surface transportation spending is more than 92 percent. Unfortunately, the FAST Act’s bailout of the Highway Trust Fund totals around $70 billion, or about 25 percent of total Highway Trust Fund spending through FY 2020.

Congress could have reduced outlays to match projected receipts, ended the status quo of mass transit receiving nearly 20 percent of federal funding while accounting for just 2 percent of trips (see here for my summary of the problem), reformed spending programs, and empowered states to raise more of their own revenue by, for instance, ending the federal prohibition on states tolling their own Interstate segments.

Unfortunately, they chose not to do so and failed to fix the underlying problems driving the Highway Trust Fund to insolvency. In five years, finding the budget offsets necessary to support these reckless spending levels will be even more difficult. And we will experience yet another Washington-manufactured “crisis” in transportation funding.

But funding isn’t everything. The FAST Act contained some policy changes. The most offensively stupid was the reauthorization of the Ex-Im bank through FY 2019 (Sec. 51001). This has absolutely nothing to do with highway and transit policy and should not have been attached by the Boeing-lovers in Congress. My colleague Ryan Young has more on this here.

Nearly as offensively stupid, but even more troubling, is a provision allowing the IRS to push the State Department to revoke the passports of people who owe more than $50,000 to the taxman (Sec. 32101). See my colleague Iain Murray here for more on the mobility bill’s attack on mobility.

But in the 1,300 pages of the FAST Act, Congress managed to include some items beyond corporate welfare and deprivations of fundamental human rights. I’ll highlight the three I found to be most interesting.

One provision, Sec. 6020, seemingly recognizes the slow-motion implosion of the fuel-tax model and provides $95 million in grant funding to states interested in piloting alternatives to fuel taxes. This should be read as federal support for mileage-based user fee pilot programs, something CEI strongly supports.

Another, Sec. 6017, attempts to restore the independence of the Bureau of Transportation Statistics (BTS). Long story short, for years administrations have put pressure on BTS to not do research they find inconvenient to their bundle of policy positions (e.g., Democratic administrations do not like mode-to-mode subsidy rate comparison research that shows mass transit to be a massive money pit).

Lately, there have been some reorganizations that troubled the research community. The most recent, which spurred the Sec. 6017 reform, occurred in 2014 when BTS was transferred to the Office of the Secretary of Transportation (OST), the wholly partisan office within the U.S. Department of Transportation (USDOT).

OST basically serves as the transportation mouthpiece for the White House. This is fine for policy—of course it will be politicized and partisan! But the valuable research conducted by BTS should not be influenced by the whims and prejudices of the executive. Under Sec. 6017, BTS will remain within OST but language was added to 49 U.S.C. § 6302 to promote the independence of BTS.

Finally, Sec. 6025 orders the Government Accountability Office (GAO) to conduct a study that assesses the status of connected vehicle and autonomous vehicle policy, assesses the organizational readiness of USDOT, and recommends implementation paths for these vehicles. This is an important first step to figuring out where regulatory conflicts may exist, particularly between the technology and the detailed technical rules that litter the National Highway Traffic Safety Administration’s (NHTSA) Federal Motor Vehicle Safety Standards (FMVSS).

In CEI’s most recent Agenda for Congress, we included the following:

Congress should examine current motor vehicle safety standards, order the National Highway Traffic Safety Administration (NHTSA) to consider the relationships between existing rules and emerging technologies, such as road vehicle automation, and authorize funding for the agency to do so. For instance, NHTSA currently requires that side-view mirrors be installed on all highway vehicles (49 CFR § 571.111). Tesla Motors recently petitioned the agency to revise its mirror rule to allow it to install cameras as mirror replacements.

In addition, NHTSA recently issued an advance notice of proposed rulemaking on vehicle-to-vehicle (V2V) communications systems (“Advance Notice of Proposed Rulemaking in the Matter of Federal Motor Vehicle Safety Standards: Vehicle-to-Vehicle (V2V) Communications,” Docket no. NHTSA-2014-0022, August 20, 2014). At present, those systems are aimed at providing audible and visual alerts, such as advanced collision warnings to drivers. However, if drivers are no longer responsible or able to manually control vehicles, as is the case with fully automated vehicles, mandating V2V warning systems would provide no benefits while increasing costs.

Congress should convene a series of hearings to discuss the future relevance of NHTSA’s federal motor vehicle safety standards in an age of rapidly developing “smart car” technology. In addition, NHTSA should be required to examine current rules that may pose barriers to innovation and should produce a report of its findings to Congress.

While we do not expect GAO to conduct the needed audit of NHTSA’s FMVSS regime, we at the very least hope GAO recommends this as a future necessary action for assessing the readiness of USDOT. Without this audit and resulting reforms, automated vehicles are likely to hit a regulatory brick wall in the coming years. That would be bad for all of us.