Contents

• Introduction
• Highway Program Funding Levels
• Types of Highway Funding
• Comparing Funding Levels Across Surface Transportation Authorization Acts
• Considerations for Congress
• Funding Levels
• Types of Funding
• Highway Trust Fund Insolvency
• Considerations for Congress
• Increase Reliance on the General Fund
• Raise Revenue
• Reduce Expenditures
• Federal-Aid Highway Formula and Competitive Discretionary Programs
• Formula Programs
• Core Formula Programs
• Formula Programs Funded Through Multiyear Advance Appropriations
• Competitive Discretionary Grant Programs
• Program Changes Under Previous Surface Transportation Authorization Acts
• Considerations for Congress
• Discontinue Existing Federal-Aid Highway Programs
• Maintain Existing Federal-Aid Highway Programs
• Create New Federal-Aid Highway Programs
• Change the Requirements for Existing Highway Programs
• Change the Highway Funding Formula

Summary

Federal funding for public roads is provided primarily through highway programs administered by the Department of Transportation's (DOT's) Federal Highway Administration (FHWA). Congress most recently authorized the federal highway programs for FY2022-FY2026 as part of the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58), a five-year surface transportation authorization act. Congress may consider future surface transportation authorization legislation, including issues and policy options related to highways. Three potential considerations are (1) the level of federal highway funding, (2) the potential insolvency of the Highway Trust Fund, and (3) the composition of the federal highway programs.

The level of funding for the federal highway programs is typically a major issue in surface transportation authorization. In the IIJA, Congress authorized a total of $365 billion for the highway programs: $304 billion in contract authority from the Highway Trust Fund, $47 billion in multiyear advance appropriations from the Treasury General Fund (general fund), and $15 billion in budget authority from the general fund subject to future appropriations. In nominal dollars, average annual authorizations increased by approximately 62% from the previous surface transportation authorization act to the IIJA. However, when adjusted for inflation, the purchasing power of the annual authorizations in FY2025 is less than the purchasing power of authorizations in FY2005, the first year of the Safe, Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA; P.L. 109-59). As Congress faces reauthorization of surface transportation law, it may choose to consider reducing funding, maintaining the same level of funding, or increasing funding for the highway programs.

The source of funding for the federal highway programs is also likely to be a major issue in reauthorization. Historically, the majority of funding for the highway programs has come from the Highway Trust Fund's highway account. If the current revenue and expenditure trends continue, then the highway account's balance is set to approach zero in FY2028. Congress has multiple options for addressing the growing gap between highway account revenue and expenditures. For example, Congress could increase reliance on the general fund by continuing to transfer money from the general fund to the Highway Trust Fund or by funding a greater portion of the highway programs through multiyear advance appropriations. Congress could increase Highway Trust Fund revenues by increasing existing taxes or establishing alternative revenue sources, such as taxes on electric vehicles, a vehicle miles traveled tax, or increased tolling. Congress could reduce expenditures by discontinuing certain programs, decreasing funding to some or all highway programs, or shifting the responsibility for funding highway projects to state and local governments. These options might lead to an overall reduction in investment in highway infrastructure.

Congress may also consider whether to discontinue or maintain existing highway programs and/or create new programs. In the Moving Ahead for Progress in the 21^st Century Act (P.L. 112-141), enacted in FY2012, Congress reduced the number of highway programs by roughly two-thirds, which resulted in six core formula programs and some competitive discretionary grant programs. Under the Fixing America's Surface Transportation Act (P.L. 114-94), Congress created one new formula program and a few new competitive discretionary grant programs. Under the IIJA, Congress created four new formula programs and many new competitive discretionary grant programs. The feasibility of maintaining the existing highway programs or creating new programs may depend on the sources and levels of funding Congress may choose.

Introduction

Congress periodically passes authorizing legislation for the federal surface transportation programs. Surface transportation authorization acts establish, continue, or discontinue federal programs and establish an upper limit on the amount of funds for such programs.¹ Previous surface transportation authorization acts covered programs related to highways, highway safety, transit, and intercity passenger rail. This report focuses on highway programs authorized in the most recent surface transportation reauthorization legislation, the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58). This includes programs authorized in Division A, Title I, of the IIJA, as well as certain programs authorized in Division J, Title VIII, that provide funding for public roads. The Federal Highway Administration (FHWA) identified such programs in its IIJA funding table.²

Surface transportation authorization acts have provided funding for multiple fiscal years. (See Table 1 for examples.)

Federal funding for public roads is provided primarily through highway programs administered by FHWA. In the IIJA, Congress authorized more than 30 such highway programs, which have different requirements and fund varying types of projects. These programs largely concern highway construction and generally do not support operations (e.g., employee salaries or fuel costs) or routine maintenance (e.g., mowing roadway fringes or filling potholes). Generally, federal money can be spent only on designated federal-aid highways, which make up roughly a quarter of U.S. public roads in terms of mileage.³

Surface transportation authorization legislation typically deals with wide-ranging policy considerations. This report addresses three selected issues likely to be of concern to Congress during development of a future surface transportation authorization act. The first issue concerns the level of funding for the highway programs and the types of highway funding. The IIJA provided an increase in highway funding compared with the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94) and increased the highway programs' reliance on the Treasury's general fund. Second, Congress may contend with the potential insolvency of the Highway Trust Fund, the main source of funding for the highway programs. The Congressional Budget Office (CBO) projects that, absent a change in policy, the Highway Trust Fund's balance will approach zero in FY2028. Third, Congress may consider changes to the highway formula and competitive discretionary grant programs to reflect shifting priorities.

Highway Program Funding Levels

Funding for the highway programs is typically a major issue in surface transportation authorization debates. Types of highway funding may also be debated.

Types of Highway Funding

In the IIJA, Congress authorized three types of funding for federal highway programs:

• 1. Contract authority from the Highway Trust Fund. Contract authority is a type of budget authority that is available for obligation without an appropriation, although appropriators later provide liquidating authority to pay the obligations.⁴ Contract authority from the Highway Trust Fund typically remains available for obligation for four fiscal years.⁵ The Highway Trust Fund is the primary source of funding for the federal highway programs.
• 2. Authorizations from the Treasury's general fund, subject to future appropriations. Congress may authorize these funds in surface transportation reauthorization acts but would need to appropriate these funds to make them available for obligation.⁶ Such funds are typically appropriated in annual appropriations legislation and usually remain available for one fiscal year. For some programs authorized in the IIJA, Congress did not appropriate such funds in subsequent appropriations acts.⁷
• 3. Authorizations from the general fund in the form of multiyear advance appropriations. Advance appropriations become available one or more fiscal years after the budget year covered by the appropriations act.⁸ In the IIJA, Congress appropriated funding that became available each fiscal year from FY2022 to FY2026. Unlike authorizations subject to future appropriations, multiyear advance appropriations do not require additional action from Congress to become available in subsequent years. The IIJA was the first surface transportation authorization act to include multiyear advance appropriations.

Prior to the IIJA, Congress funded the federal highway programs mainly through contract authority from the Highway Trust Fund and authorized smaller amounts from the general fund, subject to future appropriations. For example, the FAST Act authorized approximately $45 billion from the Highway Trust Fund and $210 million from the general fund, subject to future appropriations. Compared with prior surface transportation reauthorization acts, the IIJA authorized more funding from the Highway Trust Fund, more general fund dollars subject to future appropriations, and (for the first time) multiyear advance appropriations from the general fund (see Figure 1).

Figure 1. Average Annual Highway Program Authorized Funding in Surface Transportation Authorization Acts in nominal dollars; $billion

Source: Figure created by CRS using data from U.S. Department of Transportation (DOT), Federal Highway Administration (FHWA), Highway Authorizations: Safe, Accountable, Flexible, Efficient, Transportation Equity Act (SAFETEA-LU), P.L. 109-59, as Amended, January 31, 2012, https://www.fhwa.dot.gov/safetealu/fy12authtables.pdf; FHWA, Highway Authorizations: Moving Ahead for Progress in the 21st Century Act (MAP-21), July 2, 2012, https://www.fhwa.dot.gov/map21/docs/hamap21.pdf; FHWA, Federal-Aid Highway Program Authorizations Under the Fixing America's Surface Transportation (FAST) Act, accessed August 5, 2025, https://www.fhwa.dot.gov/fastact/estfy20162020auth.pdf; and FHWA, Highway Authorizations Under the Infrastructure Investment and Jobs Act (P.L. 117-58), November 30, 2021, https://www.fhwa.dot.gov/infrastructure-investment-and-jobs-act/docs/highway_authorizations_nov302021.pdf. Notes: SAFETEA = Safe, Accountable, Flexible, Efficient Transportation Equity Act (P.L. 109-59); MAP-21 = Moving Ahead for Progress in the 21st Century Act (P.L. 112-141); FAST Act = Fixing America's Surface Transportation Act (P.L. 114-94); and IIJA = Infrastructure Investment and Jobs Act (P.L. 117-58). In SAFETEA, Congress authorized "such sums as may be necessary," subject to future appropriations, for a few programs. As no dollar amount is associated with these programs, these authorizations are not reflected in Figure 1. The average annual authorizations for SAFETEA do not reflect the recissions required by Section 10212. In FY2010, Congress reversed the recission through the Hiring Incentives to Restore Employment Act (P.L. 111-147, §413). Authorizations in SAFETEA, MAP-21, and the FAST Act expired before Congress passed new surface transportation authorization legislation. In each case, Congress passed legislation to extend the federal-aid highway programs while negotiations over the new surface transportation reauthorization bill continued. These extensions are not considered in the figure.

In total, the IIJA authorized $365 billion for the highway programs: $304 billion in contract authority from the Highway Trust Fund, $47 billion in multiyear advance appropriations from the general fund, and $15 billion in budget authority from the general fund subject to future appropriations.⁹ In nominal dollars, average annual highway authorizations increased by approximately 62% from the FAST Act to the IIJA.

Comparing Funding Levels Across Surface Transportation Authorization Acts

Changes in economic, political, and policy landscapes between reauthorization cycles may hinder comparisons of funding levels across surface transportation authorization acts. For example, as illustrated in Table 1, Congress authorized an average of $41.35 billion per year (in nominal dollars) in the Safe, Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA; P.L. 109-59) enacted in FY2005 and an average of $40.72 billion per year in the Moving Ahead for Progress in the 21^st Century Act (MAP-21; P.L. 112-141) enacted in FY2012. Below is a list of selected events and decisions made between FY2005 and FY2012 that affected transportation policy and funding levels.

• The so-called "Great Recession" (December 2007-June 2009) reduced revenue for transportation budgets at the federal and state levels.¹⁰
• Congress enacted the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5), which among other things provided $27.5 billion for the highway programs outside of the regular surface transportation reauthorization cycle.¹¹
• The Highway Trust Fund faced an insolvency crisis, which Congress temporarily resolved with two multibillion-dollar transfers from the general fund.¹²
• SAFETEA authorized directed spending, including earmarked programs. Beginning in FY2011, Congress began observing an earmark moratorium. As a result, MAP-21 did not contain directed spending.¹³
• MAP-21 eliminated or consolidated many of the highway programs that had existed under SAFETEA, which reduced the total number of programs by roughly two-thirds.¹⁴

Inflation also complicates comparisons between the funding levels of recent surface transportation authorization acts. Table 2 shows the highway authorizations for FY2005-FY2024 in both nominal and inflation-adjusted dollars. In nominal dollars, average annual highway authorizations decreased slightly from SAFETEA to MAP-21 and have increased with every surface transportation authorization act from MAP-21 to the IIJA. However, when adjusted for inflation, the FY2005 authorizations exceed the purchasing power of every subsequent fiscal year to date. For FY2024, the IIJA authorized a total of $72 billion for highway programs; in 2023 dollars, the purchasing power of SAFETEA's authorizations for FY2005 was $89 billion.¹⁵ In 2023 dollars, the purchasing power of annual authorizations for MAP-21 and the FAST Act was between $57 billion and $60 billion.

Considerations for Congress

Funding Levels

Congress may consider the funding level to authorize for the highway programs. Congress could reduce funding, maintain the same level of funding, or increase funding. Congress has taken a variety of approaches in the past. In nominal dollars, average annual highway authorizations decreased from SAFETEA to MAP-21 and increased by about $4 billion under the FAST Act. From the FAST Act to IIJA, average annual highway authorizations increased by approximately $28 billion.

The availability of funds from the Highway Trust Fund may affect highway funding levels (see "Highway Trust Fund Insolvency," below). Funding levels may also be influenced by decisions regarding the number and scope of federal highway programs (see "Federal-Aid Highway Formula and Competitive Discretionary Programs," below).

Federal highway funding levels can affect the number and scope of highway projects on federal-aid highways over several years following a surface transportation authorization, as well as the number and scope of highway research and planning efforts. A reduction in federal funding for highways may shift responsibility for highway funding to state and local governments. Some state and local governments may be able to absorb additional highway costs or raise additional funds for highway projects without disruption of ongoing or planned highway projects while other state and local governments may not. States with a high percentage of highway assets in poor condition may be more sensitive to a reduction in federal highway funding levels.¹⁶

Types of Funding

Congress also may consider the types of federal highway funding. Historically, the highway programs have drawn funding from the Highway Trust Fund, but the fund has become increasingly reliant on transfers from the General Fund to remain solvent. In the IIJA, Congress (for the first time) provided funding to the highway programs in the form of multiyear advance appropriations directly from the general fund. Congress may consider whether to continue funding the highway programs through the Highway Trust Fund and, if so, how to ensure the solvency of the Highway Trust Fund. Congress may also consider whether to continue funding the highway programs through multiyear advance appropriations or not. For a full discussion of these issues and options, see "Highway Trust Fund Insolvency."

Highway Trust Fund Insolvency

While developing MAP-21, the FAST Act, and the IIJA, Congress considered the size of the Highway Trust Fund, which first faced insolvency in FY2007.¹⁷ The Highway Trust Fund is a federal accounting mechanism that provides a dedicated source of funding for certain federal surface transportation programs.¹⁸ The Highway Trust Fund has two accounts: the highway account, through which the majority of funds flow, and the mass transit account.¹⁹ The mass transit account provides funding for "making capital or capital related expenditures" on public transportation projects.²⁰ The highway account provides funding primarily for the federal-aid highway program and highway and vehicle safety programs, as well as for highway research, which is outside the scope of this report.²¹

The Highway Trust Fund receives revenue from fuel taxes and other transportation-related excise taxes.²² Fuel taxes typically make up roughly 85% of the highway account's annual revenue: about 60% from the gasoline tax and about 25% from the diesel tax. Congress last raised fuel taxes in FY1993 when it set the gasoline tax at 18.30 cents per gallon, of which the highway account receives an allocation equivalent to 15.44 cents, and the diesel tax at 24.30 cents per gallon, of which the highway account receives an allocation equivalent to 21.44 cents.²³

For many years, highway account revenue exceeded or was roughly equal to expenditures. Since FY2001, expenditures have exceeded revenue. The decline in revenue is due in part to inflation, which has caused a 73% decline in the purchasing power of the gasoline and diesel taxes since FY1993.²⁴ Other factors contributing to the decline in the value of the fuel taxes include the slowing rate of increase in the total number of miles driven in the United States, the increasing fuel economy of internal combustion engine vehicles, and the increasing percentage of electric and hybrid vehicles on the roads.²⁵

According to the Congressional Budget Office (CBO), the gap between highway account revenue and expenditures is expected to increase. Figure 2 shows CBO's baseline projections for the highway account as of January 2025. The gap between revenue and outlays was approximately $14 billion in FY2024. By FY2035, CBO projects the gap will be $38 billion.²⁶

Figure 2. CBO's Projected Gap Between Revenue and Outlays for the Highway Trust Fund's Highway Account nominal dollars in billions

Source: Figure created by CRS using Congressional Budget Office, Baseline Projections: Highway Trust Fund Accounts, August 12, 2025, https://www.cbo.gov/system/files/2025-01/51300-2025-01-highwaytrustfund.pdf. Note: Revenue includes interest.

If current revenue and expenditure trends were to continue, the highway account balance would approach zero in FY2028. (The balance of the mass transit account is also projected to approach zero in FY2028.) The Highway Trust Fund cannot incur a negative balance. Absent other action, if the Highway Trust Fund were to be depleted, DOT may slow payments to state and local governments for completed work on federal-aid projects²⁷ and reduce apportionments to states.²⁸

Considerations for Congress

Increase Reliance on the General Fund

Congress could resolve concerns about the solvency of the Highway Trust Fund by increasing the highway programs' reliance on the general fund either through transfers from the general fund to the Highway Trust Fund or by bypassing the Highway Trust Fund entirely. Since 2008, Congress has addressed the gap between Highway Trust Fund revenue and expenditures by transferring increasing amounts from the General Fund to the highway account, including $90 billion transferred through the IIJA in FY2021.²⁹ As discussed in "Types of Highway Funding," for some of the funding in the IIJA, Congress bypassed the Highway Trust Fund and provided direct funding from the general fund in the form of multiyear advance appropriations.

The Highway Trust Fund was initially established in part to ensure that highways had a dedicated source of funding.³⁰ By using the general fund to fund highways, Congress would effectively fund the highways from the same account from which most other programs and activities derive funding. As a result, the highway program would directly compete with other congressional priorities. Research suggests instability or uncertainty in federal highway funding can lead to higher costs and project delays.³¹

The fuel taxes are often described as "user fees" because the amount a driver pays in taxes roughly scales to the distance driven. The relationship between miles driven and gallons of gas consumed is imperfect, given the variance in fuel efficiency among different cars. Reliance on the general fund would weaken or eliminate the principle in highway funding that the entities using the highways are also funding the highway programs.

Highway Trust Fund spending has a split budgetary classification.³² Thus, programs funded through the Highway Trust Fund generally are not subject to the budgetary processes that control spending for most other programs. If Congress were to fund highway programs through the general fund, highway funding may be subject to certain reductions, such as across-the-board cuts or statutory caps on discretionary budget authority.

Raise Revenue

Congress could address the disparity between Highway Trust Fund revenues and expenditures by increasing the value of the revenues dedicated for the fund or establishing additional funding mechanisms.

Increase Existing Taxes

One option to raise revenue for the Highway Trust Fund is to increase the existing taxes dedicated to the fund, such as the gasoline or diesel tax. The fuel taxes are not tied to inflation, and so the purchasing power of the taxes declines over time. Congress may consider tying the fuel taxes to some measure of inflation or a specified cost index.

Proposals since 1993 to increase existing fuel taxes have been unsuccessful. For example, in the early 2000s, "congressional efforts to develop a 6-year program that included a 2-cent indexed increase to the gas tax following the expiration of TEA-21 garnered little support."³³ While negotiating the IIJA, some Members of Congress proposed increasing the gasoline tax, but the enacted legislation did not include any such provision.³⁴ Some opponents of fuel tax increases argue that such increases depress consumer and business spending, are regressive, and affect rural areas disproportionately.³⁵

In addition, several of the transportation-related excise taxes are set to expire or be reduced at the end of FY2028. For example, the gasoline and diesel taxes each are to be reduced from 18.30 cents per gallon and 24.30 cents per gallon, respectively, to 4.30 cents per gallon. (See Table A-1 for information about the other transportation-related excise taxes.) Should Congress not extend the expiration and reduction dates for these taxes, revenue for the Highway Trust Fund would likely decline more quickly.

Alternatives to the Fuel Taxes

Should hybrid and electric cars make up a greater share of the vehicle fleet, then gasoline and diesel purchases are likely to decline, undercutting Highway Trust Fund revenue. In this case, the tax burden of highway funding would increasingly fall on a diminishing percentage of drivers who use internal combustion engine vehicles.³⁶ To address the issue, Congress could consider raising revenues via a new tax on electric vehicles and hybrid vehicles. Congress could also replace the fuel taxes with an alternative tax or taxes on all vehicles regardless of fuel type.

Such taxes could take many forms, such as a vehicle miles traveled (VMT) tax, an annual tax on vehicles (such as a registration tax), a tax on EV charging, or a tax on EV manufacturers and importers. Each of these approaches has benefits and drawbacks. For a discussion of these options, see CRS In Focus IF13064, Electric Vehicle Taxes and the Federal Highway Trust Fund, by Nicholas E. Buffie, Anthony A. Cilluffo, and Ali E. Lohman.

Toll Federal-Aid Highways

In general, federal law bans tolling on roads that receive federal funds,³⁷ although Congress has created some exceptions to this ban.³⁸ Congress could eliminate the ban on tolling federal-aid highways or expand exceptions to the ban. Congress could also encourage states and local governments to impose tolls for use of federal-aid highways or a portion of federal-aid highways. Revenue from tolling projects generally does not accrue to the federal government, so an expansion of existing tolling on its own would not replenish the highway account. Congress could consider changing the allocation of tolling revenue or shifting more responsibility for funding highways to state and local governments.

Some publicly owned toll roads have been financially successful, but others have struggled. To be financially successful, a toll road must have sufficient traffic and drivers willing to pay a high-enough toll to cover construction, maintenance, and toll collection costs. Many federal-aid highways are rural or have low traffic volumes; those would be unlikely to generate sufficient toll revenue to make the facilities self-sustaining. Tolling may be more financially viable as a mechanism to raise revenue on higher-traffic roads.

Reduce Expenditures

Congress could address the disparity between Highway Trust Fund revenues and expenditures by reducing expenditures. For example, Congress could eliminate some of the existing federal highway programs, reduce funding for certain programs, or reduce funding for all programs. Pursuing the options discussed below might lead to an overall reduction in investment in highway infrastructure if states and localities were unable or unwilling to provide additional funds. In 2023, federal government spending accounted for 22.53% of total government spending on highways.³⁹

Eliminate or Reduce Funding for Existing Highway Programs

Congress could reduce expenditures by eliminating or reducing funding for some of the existing highway programs. Eliminating programs does not necessarily reduce spending. For example, MAP-21 (P.L. 112-141) reduced the number of federal highway programs by roughly two-thirds, but (as illustrated in Figure 1) average annual highway authorizations under MAP-21 were roughly similar to those under SAFETEA, the preceding surface transportation authorization act. For a discussion of how highway programs have changed under previous surface transportation authorization acts, see "Federal-Aid Highway Formula and Competitive Discretionary Programs," below.

Devote Highway Trust Fund Revenue Exclusively to Highways

The mass transit account typically receives between 12% and 14% of the Highway Trust Fund's annual revenue.⁴⁰ Congress could eliminate the mass transit account and dedicate its portion of the revenue to the highway account, thereby increasing funding for highways. However, if all Highway Trust Fund revenue were dedicated to highways, this would likely delay the shortfall by one year, if at all. By FY2029, CBO projects that total revenue for the Highway Trust Fund, including the highway account and the mass transit account, will be about $43 billion and spending on highways about $64 billion.⁴¹

Reduce the Federal Share for Highway Projects

Congress could link a reduction in spending to a shift in the distribution of responsibility between the federal government and states for funding highway projects. Today, most projects on the Interstate Highway System receive a maximum of 90% of funding from the federal government; for projects on other eligible roads, the maximum federal share is 80%.⁴² Prior to the 1950s, the federal share for most highway projects was 50%.⁴³

A reduction in the federal share would lower the expenditures from the Highway Trust Fund and require greater matching funding from state and local governments. As discussed above, reducing the federal share might lead to an overall reduction in investment in highway infrastructure if states and localities were unable or unwilling to provide additional funds.

Devolve the Federal-Aid Highway Program to States

"Devolution," in this report, means to shift most current federal responsibility for building and maintaining highways from the federal government to states. Surface transportation devolution proposals generally have certain characteristics in common: they would reduce or eliminate existing federal programs, reduce the federal taxes on motor fuels, and have states provide replacement funding for highway purposes if they wish to do so. Most devolution proposals would retain existing federal programs to maintain roads on federal lands, fund transportation research, and provide relief to rebuild roads and bridges damaged in natural disasters.⁴⁴

Federal-Aid Highway Formula and Competitive Discretionary Programs

FHWA administers more than 30 federal highway programs, and highway projects are also eligible for funding under multimodal programs administered by other DOT agencies.⁴⁵ This report focuses on (1) the formula programs (also known as apportionment programs), especially the core formula programs and the two new formula programs funded through multiyear advance appropriations, and (2) the competitive discretionary grant programs.⁴⁶

The authorizing language for each federal highway program establishes what activities are eligible for funding under that program. Some highway programs have a broad range of eligible activities, and others are more narrowly focused. The authorizing language may include other requirements, such as the type of highway on which the project is located,⁴⁷ the geographic location,⁴⁸ and minimum or maximum project costs.⁴⁹ One project may meet the eligibility requirements for multiple programs.

On January 20, 2025, President Trump issued executive orders requiring federal agencies to terminate or pause certain programs, policies, and activities related to climate change, electric vehicles, and diversity, equity, inclusion, and accessibility.⁵⁰ On January 29, 2025, the Secretary of Transportation ordered the modal administrations and the Office of the Secretary (OST) to "initiate all lawful actions necessary to rescind, cancel, revoke, and terminate all DOT orders, directives, rules, regulations, notices, guidance documents, funding agreements, programs, policy statements, or portions thereof, which are subject to the relevant executive orders and which are not required by clear and express statutory language."⁵¹ FHWA and OST removed guidance,⁵² updated requirements,⁵³ and suspended funding for certain highway programs.⁵⁴ In September 2025, OST reportedly terminated grant agreements under multiple competitive discretionary grant programs.⁵⁵ OST cited a federal regulation allowing a federal award to be terminated by the federal agency "pursuant to the terms and conditions of the Federal award, including, to the extent authorized by law, if an award no longer effectuates the program goals or agency priorities."⁵⁶

Formula Programs

For the formula programs,⁵⁷ FHWA apportions funds to states by formula at the beginning of each fiscal year.⁵⁸ State departments of transportation largely determine which projects receive formula funds, enter into contracts, and oversee project development and construction.

Most federal highway funding is distributed to states by formula. Under the IIJA, the formula programs account for roughly 90% of authorized funding from the Highway Trust Fund, similar to the percentage of formula funding under MAP-21 and the FAST Act. Unlike MAP-21 and the FAST Act, the IIJA included multiyear advance appropriations; of the multiyear advance appropriations, the formula programs account for 72%. Because of the multiyear advance appropriations, the discretionary programs, including the competitive discretionary grant programs, received a higher proportion of highway funding under IIJA than under previous surface transportation authorization acts.⁵⁹

Core Formula Programs

Under MAP-21, Congress restructured and consolidated the previously existing formula and discretionary programs, which reduced the number of programs by roughly two-thirds. Congress established six "core" formula programs:⁶⁰

• 1. The National Highway Performance Program (NHPP; 23 U.S.C. §119) supports improvement of the condition and performance of the National Highway System, which includes the Interstate Highway System and virtually all other major highways. NHPP funds projects to achieve national performance goals consistent with state and metropolitan planning.⁶¹
• 2. The Surface Transportation Block Grant Program (STBG; 23 U.S.C. §133) has broader eligibility criteria than the other highway formula programs. Funds can be used on any federal-aid highway and for bridge projects on any public road, as well as on public transportation projects. Of each year's allocation, a state is to suballocate 55% to areas within the state on the basis of population. States are to set aside a further 10% for bicycle paths, walkways, and other transportation alternatives.⁶²
• 3. The Highway Safety Improvement Program (HSIP; 23 U.S.C. §148) supports projects that improve the safety of road infrastructure by correcting hazardous road locations, such as dangerous intersections, or making road improvements, such as adding striping or rumble strips.⁶³
• 4. The Congestion Mitigation and Air Quality Improvement Program (CMAQ; 23 U.S.C. §149) funds projects and programs that may reduce the emission of transportation-related air pollutants.⁶⁴
• 5. The Metropolitan Planning Program (MPP; 23 U.S.C. §134) establishes a cooperative framework for making transportation investment decisions in metropolitan areas. The program funds metropolitan planning organizations (MPOs) and planning activities.
• 6. The Rail-Highway Crossing Program (RHCP; 23 U.S.C. §130) funds projects to improve safety at at-grade crossings between rail and highway infrastructure, such as by installing protective devices or relocating a road to eliminate the crossing.⁶⁵
• The FAST Act created another core formula program:
• 7. The National Highway Freight Program (NHFP; 23 U.S.C. §167) provides funds to help states and MPOs remove impediments to the movement of goods.⁶⁶

The IIJA created two more core formula programs:

• 1. The Carbon Reduction Program (CRP; 23 U.S.C. §175) funds projects to reduce carbon dioxide emissions from motor vehicles, such as traffic monitoring and management, bike and pedestrian paths, truck stop electrification, and public transportation. Sixty-five percent of CRP funds are suballocated within urbanized areas of each state based on population.⁶⁷
• 2. The Promoting Resilient Operations for Transformative, Efficient, and Cost-Saving Transportation Formula Program (PROTECT Formula; 23 U.S.C. §176) supports projects to improve the resilience of transportation infrastructure and provide evacuation routes in the event of a disaster.⁶⁸

The nine core formula programs are funded by authorizations from the Highway Trust Fund. Title 23, Section 104, of the U.S. Code establishes the formula by which these funds are distributed between states and divided among the programs.⁶⁹ Prior to MAP-21, the formula programs used a variety of formulas that took into account factors such as each state's share of the national land area, population, road mileage, lane miles, and VMT. Since MAP-21, the core formula programs use a single formula that preserves each state's share of the funds in a certain fiscal year: FY2009 under MAP-21, FY2015 under the FAST Act, and FY2021 under the IIJA.⁷⁰ Per the core formula, FHWA adjusts the shares every year to guarantee each state receives

• at least 95% of the state's estimated highway tax payments to the highway account of the Highway Trust Fund based on the most recent fiscal year for which data are available;
• at least 2% greater than the state's apportionment for FY2021; and
• at least 1% greater than the state's apportionment for the previous fiscal year.⁷¹

Table 3 shows the funding authorized for each program from FY2021 to FY2026.

Title 23, Section 126, of the U.S. Code permits states to transfer funds between the following core formula programs: NHPP, STBG, HSIP, CMAQ, NHFP, CRP, and the PROTECT Formula Program. States may transfer up to 50% of the funds apportioned to each program in a fiscal year, and Congress has placed restrictions on the transferability of certain formula program funds.⁷² According to a 2022 report published through the National Cooperative Highway Research Program, from FY2013 to FY2020 all states and the District of Columbia transferred almost $25 billion between formula programs, and $21 billion was transferred into STBG, which has broader eligibility criteria than the other formula programs.⁷³

Formula Programs Funded Through Multiyear Advance Appropriations

The IIJA created two more formula programs that are funded through multiyear advance appropriations from the general fund:

• 1. The Bridge Formula Program (BFP) provides funding to replace, rehabilitate, preserve, protect, and construct highway bridges.⁷⁴
• 2. The National Electric Vehicle Infrastructure Formula Program (NEVI) funds the installation of publicly accessible EV charging infrastructure.⁷⁵

Table 4 shows the funding appropriated for BFP and NEVI from FY2022 to FY2026.

Unlike the core formula programs, the BFP has a separate formula determining how funds are divided between states. The BFP formulas are based on each state's relative cost to replace poor-condition bridges and rehabilitate fair-condition bridges relative to the national total. The NEVI formula relies on the same base apportionment as the core formula programs, with adjustments to provide funding for Puerto Rico and the territories.

Competitive Discretionary Grant Programs

For the competitive discretionary grant programs, an agency, usually FHWA,⁷⁶ selects a recipient through a competitive process. Competitive discretionary grant award amounts are based on the requested funding in successful applications.⁷⁷ While state departments of transportation are the primary recipients of the formula grants, the competitive discretionary grants can be awarded to a wider range of recipients, including but not limited to states; political subdivisions of a state; local governments; MPOs; regional transportation planning organizations; special purpose districts or public authorities with a transportation function; U.S. territories; tribal governments; federal land management agencies; multistate corridor organizations; and nonprofits.⁷⁸

For consistency, this section addresses only programs included in FHWA's funding tables for highway authorizations under MAP-21, the FAST Act, and the IIJA.⁷⁹ These tables informed the analysis of funding levels in "Highway Program Funding Level." These funding tables include programs administered by FHWA. They also include some programs that provide funding for highway projects (among other modes) that are administered by the Office of the Secretary of Transportation (OST), such as the Rural Surface Transportation Grant Program and the Reconnecting Communities Pilot Program (see below); they do not include others, such the Safe Streets and Roads for All Program.⁸⁰

Program Changes Under Previous Surface Transportation Authorization Acts

Prior to MAP-21, which was enacted in FY2012, fewer discretionary highway grant programs were competitive. While the awarding agency was granted discretion to select grant recipients, for many of the highway programs, Congress established criteria for some or all of the recipients. For example, in SAFETEA, the Nonmotorized Transportation Pilot Program (NTPP) required that the Secretary of Transportation "establish and carry out a nonmotorized transportation pilot program" in four communities identified in the act: (1) Columbia, MO; (2) Marin County, CA; (3) Minneapolis-St. Paul, MN; and (4) Sheboygan County, WI.⁸¹ Under SAFETEA, Congress also established the competitive Projects of National and Regional Significance (PNRS) Program to provide funding to high-cost projects deemed to be of national or regional importance. SAFETEA required the Secretary of Transportation to set aside between 10% and 25% of annual program funds between FY2005 and FY2009 to carry out specific projects identified in the law.⁸² Congress provided funding to the PNRS Program equal to what was required to fund the designated projects, with no additional funding for competitive awards.⁸³

MAP-21

MAP-21 eliminated nearly all the preexisting discretionary highway programs.⁸⁴ The eliminated discretionary programs included congressionally directed programs, such as the NTPP, the National Corridor Infrastructure Improvement Program,⁸⁵ and the Transportation Improvements Program.⁸⁶ The eliminated programs also included competitive programs, such as the Highways for LIFE Pilot Program,⁸⁷ the National Historic Covered Bridge Preservation Program,⁸⁸ the Transportation, Community, and System Preservation Program,⁸⁹ and the Truck Parking Facilities Program.⁹⁰ Many of the activities that had been eligible under the eliminated discretionary programs were absorbed into the formula programs.

MAP-21 created a new competitive grant program, the Tribal High Priority Projects Program (MAP-21, §1123), a set-aside within the Tribal Transportation Program, to provide funding for high-priority or emergency projects on tribal transportation facilities.⁹¹

FAST Act

The FAST Act established several new competitive grant programs,⁹² such as those described below:

• The Nationally Significant Freight and Highway Projects Grant Program (known as INFRA; 23 U.S.C. §117) (§1105) is a multimodal program that provides funding to projects to improve freight movement.⁹³
• The Nationally Significant Federal Lands and Tribal Projects Program (§1123) is a multimodal program that provides funding for a variety of transportation projects on federal or tribal lands.⁹⁴
• The Surface Transportation System Funding Alternatives Program (STSFA; §6020) funded projects that demonstrated user-based alternatives to the federal fuel taxes.⁹⁵
• The Advanced Transportation and Congestion Management Technologies Deployment Program (23 U.S.C. §503(c)(4)) (§6004) funded "development of model deployment sites for large scale installation and operation of advanced transportation technologies to improve safety, efficiency, system performance, and infrastructure return on investment."⁹⁶ This program now known as the Advanced Transportation Technologies and Innovative Mobility Deployment Program, also called ATTAIN.⁹⁷

IIJA

The IIJA continued some of the competitive grant programs established under the FAST Act and created new ones. Below are examples of new competitive discretionary grant programs established in the IIJA:

• The Bridge Investment Program (BIP; 23 U.S.C. §124) (§11118) funds projects to replace, rehabilitate, preserve, or protect bridges in the National Bridge Inventory. The program is funded at an annual average of $2.5 billion through the Highway Trust Fund and multiyear advance appropriations from the general fund. Section 11101(b)(2)(A)(i) of the IIJA authorized an additional average of $653 million per year subject to appropriation.⁹⁸
• The Congestion Relief Program (23 U.S.C. §129(d)) (§11404) funds projects that advance innovative integrated and multimodal solutions to congestion relief. The program is funded at $50 million per year from the Highway Trust Fund.⁹⁹
• The Charging and Fueling Infrastructure Discretionary Grant Program (CFI; 23 U.S.C. §151(f)) (§11401) funds contracts with private entities to acquire and install publicly accessible EV, hydrogen, propane, or natural gas charging or fueling infrastructure. This program is funded at an annual average of $500 million from the Highway Trust Fund.¹⁰⁰
• The Rural Surface Transportation Grant Program (23 U.S.C. §173) (§11132) funds projects to improve and expand rural surface transportation infrastructure. The program is funded at an annual average of $400 million from the Highway Trust Fund.¹⁰¹
• The Promoting Resilient Operations for Transformative, Efficient, and Cost-saving Transportation Discretionary Grant Program (PROTECT; 23 U.S.C. §176(d)) (§11405) is divided into four set-asides for Planning grants, Resilience Improvement grants, Community Resilience and Evacuation routes grants, and At-risk Coastal Infrastructure grants. The program is funded at an annual average of $280 million from the Highway Trust Fund.¹⁰²
• The Reduction of Truck Emissions at Port Facilities Program (§11402) funds projects that test, evaluate, and deploy strategies to electrify port operations and reduce truck idling and emissions at port facilities. The program is funded at $80 million per year: $50 million annually from the Highway Trust Fund and $30 million annually from multiyear advance appropriations through the general fund.¹⁰³
• The Wildlife Crossing Pilot Program (23 U.S.C. §171) (§11123(b)(1)) provides grants for projects intended to reduce wildlife-vehicle collisions or increase habitat connectivity. The program is funded at an annual average of $70 million from the Highway Trust Fund.¹⁰⁴
• The Prioritization Process Pilot Program (§11204) supports data-driven approaches to planning that allow for an accessible and transparent prioritization process. The program is funded at $10 million per year from the Highway Trust Fund.¹⁰⁵
• The Reconnecting Communities Pilot Program (§11509) funds planning and construction grants for removing, retrofitting, or mitigating transportation facilities, such as viaducts or limited access highways, that create barriers to community connectivity. The program is funded at an annual average of $200 million through multiyear advance appropriations from the general fund.¹⁰⁶

Considerations for Congress

Congress may discontinue certain existing federal highway programs, maintain the existing programs, and/or create new programs. Congress could also change the requirements for highway programs or change how funding for highways is distributed to the states.

Discontinue Existing Federal-Aid Highway Programs

Congress could discontinue one or more existing federal highway programs, with one potential rationale being that a program no longer aligns with congressional priorities. Another approach could be to eliminate narrowly focused programs that provide funding for activities that are also eligible under a broader program or could be incorporated into a broader program. For example, many of the activities eligible for funding under the programs discontinued in MAP-21 were absorbed into the core formula programs. This approach would not eliminate federal funding for a given activity but would require the recipient of federal funding to choose or balance that activity amid other eligible activities.

Congress could create a broad highway program to provide the recipient with flexibility to select highway projects that are most appropriate for local conditions and priorities. In contrast, a narrow program would ensure recipients spend federal funds on a type of project that Congress has deemed a priority. For example, after the Silver Bridge on the Ohio River collapsed in 1967, Congress established the first stand-alone federal highway bridge funding program, the Special Bridge Replacement Program, a discretionary program.¹⁰⁷ Congress later replaced the Special Bridge Replacement Program with the Highway Bridge Replacement and Rehabilitation Program, a formula program. Under MAP-21, Congress discontinued the Highway Bridge Replacement and Rehabilitation Program, but bridges continued to be eligible under other highway programs, such as STBG and NHPP.¹⁰⁸ Under the IIJA, Congress determined that bridges required more funding than they had received through the broader programs and established two new programs dedicated to bridges: BFP and BIP.

Discontinuation of a program or programs may or may not reduce authorizations from the Highway Trust Fund. As discussed, in MAP-21, Congress reduced the number of highway programs by two-thirds but reduced authorizations from the Highway Trust Fund by an annual average of 1.5% in nominal dollars.

If Congress were to discontinue a program and reduce highway authorizations, the reduction in expenditures from the Highway Trust Fund likely would not be immediate. Once contract authority becomes available for obligation, it remains available for four fiscal years (e.g., funds available in FY2026, the last year of authorizations under the IIJA, could be obligated at the end of FY2029). Once funds are obligated to a specific project, they remain in the Highway Trust Fund until the funding recipient submits a request to FHWA for reimbursement for work completed on the project. Some highway projects are large and complex and can take years to finish. Therefore, recipients may be submitting requests for reimbursement for projects funded by IIJA authorizations years after FY2029.¹⁰⁹ In the meantime, Congress may consider additional steps to make good on existing and future highway obligations, such as those discussed in "Highway Trust Fund Insolvency."

Maintain Existing Federal-Aid Highway Programs

Congress could maintain the existing highway programs. The feasibility of this option may depend on how Congress chooses to fund the highway programs and address the projected insolvency of the Highway Trust Fund. Without a change in revenue or sources of funding, it would not be possible to maintain the existing highway programs at current funding levels.

Congress could maintain the existing programs but reduce funding for some or all programs. If Congress were to reduce funding for certain programs, one approach could be to select programs that are no longer high congressional priorities. Another approach could be to identify the programs with lower demand. For the core formula programs, Congress could assess from which programs the state departments of transportations tend to transfer funds. For the competitive discretionary programs, Congress could review the ratio of funds requested via applications compared with the funds available for award.

Create New Federal-Aid Highway Programs

Congress could create new highway programs. The potential insolvency of the Highway Trust Fund could present challenges for funding new highway programs if Congress does not make other changes to highway program funding. For example, in the IIJA, Congress provided funding for multiple new formula and competitive discretionary grant programs through multiyear advance appropriations, a novel funding mechanism for highway programs.

In the past, Congress created new highway programs, including narrowly focused programs to ensure federal funding is spent on an activity or activities deemed high-priority (see "Discontinue Existing Federal-Aid Highway Programs"). Oftentimes, these activities were also eligible for funding under broader programs but might not have been prioritized by funding recipients. Congress created other new programs, such as the Rural Program and the Reconnecting Communities Pilot Program, to direct funding to specific areas or communities.

Change the Requirements for Existing Highway Programs

Congress could change the requirements for existing highway programs. In the past, Congress has made new activities eligible under a program, created set-asides within a program for certain activities, or narrowed the eligibility requirements for a program. Congress could also change procedural requirements to provide FHWA and other agencies within DOT more or less latitude to set program priorities using agency regulations, guidance, and notices of funding opportunities.

Change the Highway Funding Formula

Certain stakeholders and some Members of Congress have argued that the highway funding formula for the core formula programs is based on outdated information. For example, some Members of Congress from states where the population has increased in the last two decennial censuses have argued that the formula should be updated to account for the changing share of population in each state.¹¹⁰

If Congress were to revise the highway funding formula, stakeholder groups would likely advocate to include or exclude various factors and weight some factors more heavily than others. For example, for a report published in 2025, the GAO interviewed representatives of state departments of transportation, tribes, MPOs, consultants, and transportation stakeholder associations about variables that could factor into a new highway funding formula or formulas. The interviewees expressed support for 27 variables related to infrastructure condition; freight movement and economic vitality; safety; system reliability; and congestion reduction.¹¹¹

Appendix A. Highway Trust Fund Revenue and Transfers from the General Fund

Appendix B. Split Budgetary Classification for Highway Trust Fund Programs

Congressional budgetary procedures distinguish between two types of spending: discretionary and mandatory (or direct) spending. Both types of spending provide statutory authority for agencies to enter into obligations, but they are distinct in most other respects, such as formulation, consideration, and restrictions.¹¹²

For most spending, the budget authority and outlays have the same classification. For example, the Congressional Budget Office (CBO) treated the multiyear advance appropriations and budget authority subject to future appropriations in the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58) as appropriations legislation.¹¹³ As such, the budget authority and outlays for spending authorized in Division J, Title VIII, of the IIJA are classified as discretionary.

In contrast, programs funded through the Highway Trust Fund have a "split budgetary classification": the budget authority is classified as mandatory, and the outlays are classified as discretionary. Contract authority from the Highway Trust Fund is subject to obligation limitations specified in annual appropriation acts, so CBO accounts for outlays from the Highway Trust Fund when scoring annual appropriations bills rather than when scoring surface transportation reauthorization bills.¹¹⁴ For example, CBO's analysis of Division A, Title I, of the IIJA, which covers the federal-aid highway programs, provides estimates for increases in budget authority but not in outlays.¹¹⁵

In the 2014 report, The Highway Trust Fund and the Treatment of Surface Transportation Programs in the Federal Budget, CBO provides an explanation about the effect of split budgetary classification:

Surface transportation programs funded from the Highway Trust Fund are generally not subject to the processes that control spending for most other programs:

Spending for mandatory programs is usually subject to certain reductions—mostly across-the-board cuts—under budget rules. However, outlays for the trust fund's surface transportation programs are not subject to those rules because they are considered discretionary.

Spending for most discretionary programs is controlled by statutory caps on discretionary budget authority. However, outlays for the trust fund's surface transportation programs are not constrained by those caps because the budget authority for those programs is considered mandatory.¹¹⁶

Footnotes