19. Department Of Transportation (Summary)

Author: Diana Furchtgott-Roth

Summary

• The U.S. Department of Transportation (DOT) plays a crucial role in America’s economic prosperity by managing transportation systems, which include highways, aviation, railroads, and maritime operations.
• The DOT’s budget for FY 2023 is $142 billion, but its role has evolved from policy-making to direct funding of transportation projects, often bypassing local input and priorities.
• The department has become a grant-making organization, providing about $50 billion in discretionary and formula grants annually, which may disincentivize state and local governments from making fiscally responsible decisions.
• The DOT’s focus has shifted to aligning with congressional mandates rather than addressing the transportation needs most relevant to the public, such as the high cost of automobiles and inefficient infrastructure spending.
• The Build America Bureau (BAB) provides 30-year subsidized loans for transportation projects, potentially disintermediating private sector financing.
• Public-Private Partnerships (P3s) are highlighted as a way to fund infrastructure efficiently, though they must be managed carefully to avoid long-term financial burdens on taxpayers.
• The chapter emphasizes the importance of emerging technologies in transportation, urging DOT to set safety and privacy standards without stifling innovation, particularly in automated vehicles.
• Criticism is levied against the Corporate Average Fuel Economy (CAFE) standards under the Biden Administration, arguing that these standards increase the cost of vehicles and reduce safety by disincentivizing the purchase of newer, safer cars.
• The Federal Highway Administration (FHWA) is critiqued for expanding beyond its original mission, funding projects that could be managed by state and local governments.
• In aviation, the chapter criticizes the Biden Administration’s policies that potentially limit competition and innovation while pushing for reforms in the Federal Aviation Administration (FAA) to modernize its operations.
• The Federal Railroad Administration (FRA) is urged to make decisions based on safety rather than political considerations, with a focus on modernizing safety standards.
• The Maritime Administration (MARAD) is suggested to be better aligned under the Department of Homeland Security or the Department of Defense, rather than DOT, to better serve national security and maritime industry needs.

Analysis

• Decentralization of Transportation Funding: If the U.S. government implements the chapter’s suggestions, particularly decentralizing transportation funding to states, it could lead to more tailored and efficient infrastructure projects that better meet local needs. However, it might also reduce federal oversight and consistency across states.
• Increased Private Sector Involvement: Encouraging more private sector involvement through P3s and reducing federal grant-making could lead to more innovation and efficiency in infrastructure development. However, it could also increase costs for users if not properly managed.
• Reforming Fuel Economy Standards: Rolling back CAFE standards to levels that are more feasible for ICE vehicles could lower vehicle costs and improve safety by making newer cars more affordable. However, this could slow the transition to electric vehicles and potentially impact environmental goals.
• FAA and DOT Reforms: Modernizing the FAA and restructuring its funding could improve U.S. leadership in aviation safety and innovation. However, separating the FAA from DOT or its ATO from the FAA could introduce new administrative challenges.
• National Security and MARAD: Transferring MARAD to DHS or DoD could strengthen national security but may require significant restructuring and could impact the focus on commercial maritime interests.

Tags

• Transportation Infrastructure
• Public-Private Partnerships
• Fuel Economy Standards
• Federal Aviation Administration
• Maritime Administration

Read the original chapter text here: https://static.project2025.org/2025_MandateForLeadership_FULL.pdf#page=652

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