Federal Memo on State Highway Spending Faces Sharper Criticism

A controversial memo that has guided the Biden administration’s handling of new highway projects for the last year is on shaky footing, after Republicans secured two victories in recent days that undermine the basis for the policy blueprint.

Republicans have long chafed at the memo from last December written by Stephanie Pollack, the deputy administrator who ran the Federal Highway Administration at the time. They see it as a backdoor effort by the Biden administration to promote goals that were not included in the infrastructure law Congress passed last year.

In the memo, Pollack indicated that FHWA would encourage states to fix existing infrastructure before building new capacity. She said the Biden administration would also encourage projects that promote safety, mitigate dangers from climate change and promote “inclusion of disadvantaged and under-represented groups.”

But states—not the federal government—decide which projects get built with federal highway money, in the vast majority of cases.

Pollack and other Biden administration officials have argued that the memo was an internal document explaining how FHWA employees should carry out the work of the infrastructure law.

Republicans disagreed, and they asked the Government Accountability Office to decide whether the memo was significant enough to require formal vetting by Congress. (The Congressional Review Act requires agencies to submit major policy changes to Congress, including directions that do not have to go through the traditional administrative rulemaking process.)

Last week, the GAO ruled that the document made significant enough policy decisions that it needed to be treated like a formal rule. The memo, the federal watchdog said, “specifies a goal to inform decision-making and goes beyond simply restating the requirements in the law.”

An FHWA spokesperson declined to say how the administration would respond to the ruling, whether by submitting the memo to Congress or by withdrawing it.

U.S. Rep. Sam Graves, the top Republican on the House committee overseeing transportation and infrastructure, said the GAO ruling validated concerns from GOP lawmakers. Graves, who voted against the bipartisan infrastructure law, is expected to become chair of the committee when Republicans take control of the House in January.

The “determination is what we’ve known all along–the FHWA memo goes far beyond mere ‘guidance’ from the administration,” the Missouri lawmaker said in a statement. “The administration has repeatedly doubled down on discouraging states from expanding or building new roads they may need, despite this policy being in direct conflict with what Congress intended.”  

Graves said the Biden administration has “ignored” calls to rescind the memo, even though FHWA officials “know” the document “has caused significant confusion among states.”

The GAO “determination demonstrates the need to hold the administration accountable, prevent it from overstepping its authority, and ensure that the law is implemented as written,” Graves added. He also said that he is prepared if necessary to work with Senate Republicans to try to get the memo discarded under the Congressional Review Act.

On the other side of the rotunda, U.S. Sen. Tom Carper, the Democrat who chairs the Environment and Public Works Committee, called the GAO ruling “misguided.”

“This memo did not place any new requirements or penalties on states. Rather, the memo reasserted the authority of states to invest in infrastructure projects that best meet their individual needs,” he said.

“Congress should not be in the business of disapproving internal policy documents from any administration, Democratic or Republican, through the use of the Congressional Review Act. I will oppose any efforts to do so in this case as it would interfere with our ability to rebuild our nation’s roads, highways and bridges,” Carper added.

Shortly after the GAO dust-up, though, budget negotiators included language in a new spending deal that also appears to be aimed at reining in the FHWA.

Specifically, the agreement “directs the FHWA to continue to engage with stakeholders, including state DOTs and local governments, to clarify that the DOT is not seeking to discourage projects that are eligible under current law and will not penalize states that use highway formula funds for projects eligible under current law.”

The spokesperson said the FHWA “is aware of the language” in the spending agreement but reiterated the agency’s view that the memo “is an internal, non-binding FHWA policy document directed to FHWA staff, with no impact on states’ unquestioned statutory right to pursue projects of their choosing.”

Even the GAO decision acknowledged as much, the spokesperson pointed out. The oversight agency said, “states could potentially ignore the preferences that FHWA articulated in the memo and still receive funding from the agency to implement the projects they prioritize and select.”

The highway agency, the spokesperson said, “will continue to engage states accordingly.”

Since Pollack released the memo, the FHWA has given the greenlight to road widening projects, such as a proposed expansion of the Beltway in the Maryland suburbs of Washington, D.C. It has delayed road expansions in Houston and Portland, Oregon, but both of those projects appear to be moving forward again after state officials tried to address FHWA’s concerns.