The Now and Future Interstate System
A former head of the Federal Highway Administration reviews the systems —
past, present, and future.

by Mary Peters

The Interstate Highway System — a wonder to behold! Those ribbons of asphalt and concrete, stretching from coast to coast, border to border, linking our great nation together. The system has allowed our nation to grow and prosper, and our people to have unparalleled freedom of movement. Many Americans do not recall a time when the Interstate Highway System did not exist, and perhaps naively take for granted the significant benefits it provides.

As we celebrate the 50th anniversary of the Interstate in 2006, it presents an opportunity to reflect on both the public policy decisions that facilitated its development, and the appropriate public policy positions that will move our nation forward in the 21st century. To do so, it is appropriate that we also reflect on transportation challenges that led to the development of the Interstate system in the mid 1950s, as well as define current transportation challenges to be met in the future.

The Interstate Highway System has certainly lived up to the goals that led to its development — providing a safe and efficient national system of highways. The system has contributed significantly to the national economy, helped ensure national defense, and improved the quality of life for our nation’s citizens. The systems and funding structures put in place to build and finance the Interstate system have served us very well in accomplishing those goals. Are they, however, the right mechanisms to meet our nation’s transportation needs now and into the future? Perhaps a brief review of how and why the program was developed, and how things have changed, may help us answer that question.

Early days

In the early 1900s, the Federal-Aid highway program was put in place to get Americans off of dirt roads and out of the mud. The Bureau of Public Roads had responsibility for the program, consisting of primary and secondary roads of importance to the nation in getting goods to markets. The BPR was also responsible for setting the standards for these roads, and for research.

As America became more industrialized, the Bureau created an Interstate system of roads in 1944. Unfortunately, the system was neither funded nor authorized at the time. Several toll roads, including the Pennsylvania Turnpike, were developed by the private sector, and provided a good alternative to the farm-to-market roads.

Dwight D. Eisenhower had participated in a very difficult and lengthy cross-country military convoy as a young Army officer in the early 1900s, and later marveled at the efficiency of the German Autobahn system following World War II. When he was elected President of the United States, he recognized the need for a safe and efficient system of highways to connect our nation’s major cities and ensure national defense.

President Eisenhower established a commission to define the system and a method of financing it. The Clay Commission, as it came to be known, was tasked with working with the nation’s governors in developing recommendations, and was staffed by the Bureau of Public Roads. Interestingly, the President initially recommended tolling to pay for the system. The commission rejected that idea as unworkable, and Congress later rejected a proposal to pay for the system through bonding.

Ultimately, the proposal that was supported by both the President and Congress to pay for the 41,000-mile system was a $0.01 increase in the fuel tax, to be deposited into a Highway Trust Fund. The total estimated cost of the system was $25 billion, and it was to be completed by 1969. Federal funding would provide 90% of the cost of the system, to be matched by 10% from the states. President Eisenhower signed the legislation into law on June 29, 1956.  The U.S. Department of Transportation was established that same year, and the Bureau of Public Roads moved from the Department of Commerce to the new agency, and became the Federal Highway Administration.

As development of the Interstate Highway System progressed, it provided Americans with significantly greater mobility. Families could move to growing suburban areas, enjoy a high quality of life, and still easily commute to jobs in the cities. However, there was also a growing concern about the effect the highways were having on communities and the environment. In the 1960s Congress enacted the National Environmental Policy Act, balancing the natural and human environment and providing an opportunity for public involvement in the transportation planning process.

Progress versus costs

The cost to complete the system increased to $56.5 billion by 1968, and the completion date was pushed out to 1974. President Reagan sought to end the program in the 1980s, citing completion of the Interstate system and the need to end the program established to build it. In 1987, President Reagan vetoed the highway bill, criticizing both the continuance of the program and the level of earmarks in the bill. Congress promptly overrode his veto.

The program continued to evolve, most notably in the 1991 Intermodal Surface Transportation Efficiency Act, or ISTEA, which shifted focus from national to state and local. New programs such as the National Highway System, the Surface Transportation Program, and Congestion Mitigation and Air Quality established new, broader eligibilities for use of federal funds, and set-asides for safety and enhancements.

The Transportation Efficiency Act for the 21st Century, or TEA-21, was passed in 1998, providing firewalls for the highway trust fund and minimum guarantees of funding for the transportation program. States paying more into the transportation program than they received, or donor states, had been determined to get a better rate of return.  The legislation ultimately provided a substantial increase in funding for all states, along with a generous helping of earmarks.

Reaching agreement on authorizing legislation to follow TEA-21 became much more difficult. That bill, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, or SAFETEA-LU, ultimately passed in July 2005, 22 months and 12 extensions after expiration of TEA-21. The bill guaranteed all states a six-year average highway funding increase of at least 19%, and each state’s minimum rate of return on contributions to the highway trust fund will go from 90.5 to 92% by 2008, an issue that was critical to donor states. To provide this funding, the balance in the highway account of the highway trust fund will be drawn down to minimum levels through 2009. The bill also contained over 6,300 earmarks at a cost of $24 billion.

While many of us involved in developing and ultimately seeing the bill become law breathed a sigh of relief, we all recognized that much remains to be done in addressing the nation’s surface transportation needs. At the end of the day, the bill was more evolutionary than revolutionary, and did not address key policy issues, such as the appropriate federal role in the post-Interstate era.

What about the future?

The difficulty in reaching agreement on the legislation clearly signals the strong need for bold new thinking for the future. The compelling national interest that led to the development of the Interstate Highway System no longer exists, leading to an environment where every grant recipient argues for his or her own self-interest. The Federal-Aid highway programs have increasingly devolved to more of a public works program, as evidenced by the substantial level of earmarks in the recently passed legislation.

We have truly reached a crossroad in terms of the role of the federal government in surface transportation. It is fitting that as we celebrate the 50th anniversary of the Interstate system in 2006, commissions established by SAFETEA-LU will convene to focus on the future of federal surface transportation programs.

There is little dispute that needs far outstrip revenues available under the largely fossil-based fuel tax systems in place today. Highway infrastructure is significantly under-supplied relative to demand. There is not, however, agreement on how to close the gap. In fact, the unwillingness of elected officials to increase or index national fuel taxes is reflective of a lack of investor confidence in the current system.

This should come as no surprise since consumers have seen little real benefit from their investment in addressing the issues that many face daily, including congestion and the lack of capacity.  Nationally, nearly 30 percent of the roadway network is congested today, and if capacity is not increased to keep pace with demand, congestion is expected to affect nearly half of the roadway network by 2020.

The future of a federal surface transportation program is dependent on defining and agreeing on national transportation policy, and those issues that are truly in the federal interest. It is critical that these discussions address the issues and challenges ahead, including the increasing levels of congestion, aging infrastructure, reducing our dependence on foreign oil, less public discretionary funding available, and an aging population.

2006 is a year of opportunity — opportunity to celebrate our past success, evidenced by the 50th anniversary of the Interstate Highway System, and opportunity to develop a new transportation policy to serve our nation for the future. Just as the Interstate allowed America to grow our national economy, we have the opportunity to define systems and structures that will sustain our nation in the global economy for the future.

Mary Peters is a senior vice president and national director of transportation policy and consulting for HDR, based in the company’s Phoenix office. She was the Federal Highways Administrator from 2001 to 2005.

Reprinted from Better Roads Magazine
May 2006

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