Highway Congestion and Federal Policy

According to one widely cited study, highway congestion caused 4.2 billion hours of delay and the use of 2.9 billion gallons of additional fuel in 2005, at a cost of $78 billion to highway users.1 Other similar studies have found that highway users faced significant delays and costs because of congestion at major urban intersec­tions, on major transportation corridors between cities, and at locations with large amounts of truck traffic.2 Moreover, the costs of highway congestion extend beyond the highway users themselves. One recent study estimated that highway congestion cost businesses in one major metropolitan area up to $1 billion per year in increased production and distribution costs, over and above the costs borne by highway users themselves.3 Congestion is estimated to represent half of all the “external costs” that an automobile user imposes on other members of society. (Other external costs include costs imposed by pollution generally, greenhouse gases, and accidents.)4

Highway congestion is defined as the delay a vehicle causes to other vehicles on the highway. Delays frequently occur when the number of vehicles approaches the high­way’s theoretical capacity. Those bottleneck delays are the single largest cause of delays nationwide (see Figure 1-1). But highways that were completely uncongested all the time would not necessarily be desirable from a social point of view; the cost of such a system would greatly exceed the benefits of any time saved.

Figure 1-1. 

Sources of Highway Congestion

Figure 1-1

Source: Cambridge Systematics, Traffic Congestion and Reliabil­ity: Trends and Advanced Strategies for Congestion Miti­gation (prepared for the Department of Transportation, Federal Highway Administration, September 1, 2005), p. 3.

Highway congestion has been increasing and is expected to be even more prevalent in the coming years. According to estimates by the Department of Transportation’s Fed­eral Highway Administration (FHWA), 11 percent of the major highways in the United States experienced peak-period congestion in 2002, but by 2035, that figure is expected to rise to 40 percent (see Figure 1-2).

Figure 1-2. 

Peak-Period Congestion in the National Highway System, 2002 and 2035

Figure 1-2

Source: Federal Highway Administration.

Until recently, federal highway policy was not designed to reduce congestion.5 The Federal-Aid Highway Act of 1956 acknowledged traffic congestion in urban areas, but the primary purpose of the legislation was to authorize construction of the Interstate Highway System. The Highway Revenue Act of 1956 authorized creation of the Highway Trust Fund to finance the construction and expansion of the federal-aid highway system. Revenues paid to the trust fund come almost entirely from the fed­eral tax on gasoline and other transportation-related excise taxes. Consequently, drivers pay about the same amount to use highways regardless of the number of vehi­cles on them at a given time or place.

Through the 1960s, the federal-aid highway program focused primarily on completing the Interstate Highway System. By the 1970s, with most of that system built, attention turned to energy efficiency, emissions, and highway safety. Since the 1980s, the number of highway lane miles has been essentially unchanged, while the number of vehicle miles traveled has nearly doubled (see Figure 1-3). The result was increased congestion that has brought the problem to the attention of policymakers.

Figure 1-3. 

The Amount of Traffic Compared with the Stock of Roads

(Index, 1980 = 100)

Figure 1-3

Source: Congressional Budget Office based on data as follows: for vehicle miles traveled, Department of Transportation, Federal Highway Administration, Highway Statistics Summary to 1995, Table VM201, “Annual Vehicle Distance Traveled by Vehicle Type and Highway Category,” and Highway Statistics, Table VM-1, “Annual Vehicle Distance Traveled”; for lane miles, Department of Transportation, Federal Highway Administration, Highway Statistics Summary to 1995, Table HM260, “Estimated Lane Length,” and Highway Statistics, Table HM-60, “Functional System Lane Length”; for stock of roads, Department of Commerce, Bureau of Economic Analysis, Fixed Asset Table 7.2B, “Chain-Type Quantity Indexes for Net Stock of Government Fixed Assets,” Line 14, available at
, accessed on January 16, 2009.

Note: “Vehicle Miles Traveled” conveys the increase since 1980 in the total amount of traffic. The “Stock of Roads” expresses the increase over the same period in the value of roads, bridges, signs, and other such capital—representing a rough measure of the condition of the highway system. “Lane Miles” is a physical measure of the stock of roads.

The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA, 23 U.S.C. 1001 et seq.) recognized that traffic congestion in urban areas was becoming a growing problem.6 Increasing air pollution from greater highway use and the growing amount of resources needed to maintain the mature highway system made it difficult to solve the problem by expanding capacity. Instead, ISTEA sought to improve the efficiency with which the existing highway system was used. States and localities were encouraged to use the money they received from the Highway Trust Fund to develop their own solutions to local congestion problems.

Two factors have made it difficult for the federal govern­ment to direct money where it is most needed to reduce congestion nationwide. First, funding has been limited by the formula to allocate funds among states, which has tended to equalize the resources among states. Sec­ond, identifying where to invest has been problematic because the costs of congestion have sometimes been borne by people far removed from where the congestion occurs. In an effort to address those problems, ISTEA provided funding for five demonstration projects in the Congestion Pricing Pilot Program; provided funding for technology-based approaches, termed intelligent trans­portation systems; and made it easier to use federal-aid funds to build and maintain toll roads.7

In 1998, the Congress enacted the Transportation Equity Act for the 21st Century (TEA-21, Public Law 105-178), essentially continuing the congestion-mitigation policies begun in ISTEA.8 The Congestion Pricing Pilot Program was renamed the Value Pricing Pilot Program, and fund­ing for it and intelligent transportation systems was increased.

In 2005, the Safe, Accountable, Flexible, Efficient Transportation Equity Act—A Legacy for Users (SAFETEA-LU, 23 U.S.C. 101-166) was enacted.9 That law again continued the policies begun by ISTEA. It increased the funding of the Value Pricing Pilot Program (from $51 million to $59 million over five years), again increased funding for intelligent transportation systems, and changed rules to make it easier for state and local governments to use federal-aid funds to build and main­tain toll roads. However, the formula to allocate funds among states again tended to equalize resources, making it more difficult to direct money to where it was most needed to reduce congestion. SAFETEA-LU also pro­vided legal authority, but not federal funding, to convert high-occupancy vehicle (HOV) lanes to high-occupancy toll (HOT) lanes (23 U.S.C. section 1121).


Texas A&M University, Texas Transportation Institute, Urban Mobility Report (2007), p. 1, available at The Texas Transportation Institute (TTI) provides the most widely cited estimates, but exact measures of congestion would be very difficult to develop. TTI’s estimates do not include congestion on roads in smaller towns or rural areas and therefore may underestimate the amount of congestion nationwide. However, some observers note that TTI measures congestion relative to free flows of traffic and uses theoretical rela­tionships rather than actual operational data. Those factors would cause TTI to overestimate traffic congestion in urban areas. In addition, the organization’s figure on the amount of fuel wasted may be an overestimate because it relies on dated information on fuel consumption.


For a discussion of delays at major urban intersections, see American Highway Users Alliance, Unclogging America’s Arteries: Effective Relief for Highway Bottlenecks, 19992004 (Washington, D.C., February 2004), available at; transportation corridors between cities, see Department of Transportation, Federal Highway Administration, Office of Freight Management and Operation, Measuring Travel Time in Freight Significant Corridors (April 2005), available at; locations with large amounts of truck traffic, see Cambridge Systematics, An Initial Assessment of Freight Bottlenecks on High­ways (prepared for the Department of Transportation, Federal Highway Administration, October 2005), available at


Transportation Research Board, National Cooperative Highway Research Program, Economic Implications of Congestion, Report 463 (Washington, D.C., 2001), available at http://online­


Ian W. H. Parry, Margaret Walls, and Winston Harrington, “Automobile Externalities and Policies,” Journal of Economic Literature, vol. 45, no. 2 (June 2007), p. 384.


For a more extensive discussion of related legislative issues, see William J. Mallett, Surface Transportation and Congestion: Policy and Issues (Congressional Research Service, May 2007), available at 9958-4F05-816C-1EC02069BAE3/0/SurfaceTransportationCongestionPolicyandIssuesCRS.pdf.


See Senate Committee on Environment and Public Works, The Surface Transportation Efficiency Act of 1991, S. Rept. 102-71 (June 4, 1991); and House Committee on Public Works and Transportation, Intermodal Surface Transportation Infrastructure Act of 1991, H. Rept. 102-171(I) (July 26, 1991).


Intelligent transportation systems use a variety of computer, com­munication, and sensor technologies to improve highways and mass transit. See Congressional Budget Office, High-Tech High­ways: Intelligent Transportation Systems and Policy (October 1995).


For information on major provisions, see Federal Highway Administration, Transportation Equity Act for the 21st Century, A Summary (July 14, 1998), available at


See John W. Fischer, Safe, Accountable, Flexible, Efficient Trans­portation Equity ActA Legacy for Users (SAFETEA-LU or SAFETEA): Selected Major Provisions (Congressional Research Service, October 18, 2005), available at, for a summary of major provisions of SAFETEA-LU.

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