GAO calls FHWA infrastructure law memo a rule Congress can review

The Government Accountability Office concluded a December 2021 memo issued by the Federal Highway Administration to guide states on using infrastructure law funds went beyond listing legal requirements and instead expressed a policy preference.

The GAO determined the internal memo, which indicates states should prioritize fixing existing assets over highway expansions, meets the definition of a regulation under the Administrative Procedure Act and could be reviewed by Congress.

The Congressional Review Act allows Congress to overturn rules issued by federal agencies. If Congress passes a joint resolution expressing disapproval that is signed by the president, the rule does not go into effect.

Senate Environment and Public Works Committee ranking member Shelley Moore Capito (R-W.Va.), who requested the GAO analysis in February, said GAO's ruling means she will introduce a CRA resolution of disapproval of the memo, which has long been a source of angst for Republicans.

"The Infrastructure Investment and Jobs Act was crafted and negotiated in a purposeful way, but through memos and guidance documents issued to states the administration has since attempted to contradict the law and impose policies that were specifically left out of the law," Capito said in a statement.

FHWA said in a response letter to GAO that the memo "restates a preexisting statutory or regulatory requirement for informational purposes." GAO disagreed with that assessment.

FHWA spokesperson Cole Leiter said GAO's decision confirms the agency's and DOT's position that "the memorandum 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."

Leiter noted that GAO's ruling says states can ignore the agency's preferences expressed in the memo. In the last year, 13 new projects that expanded highway capacity cleared the National Environmental Policy Act process despite GOP concerns that the memo would impose new policies on states.

Senate EPW Chair Tom Carper (D-Del.) said in a statement he was disappointed with GAO's decision, arguing "this memo did not place any new requirements or penalties on states."

"Ultimately, 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," Carper said. "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.”

Background: In December 2021, FHWA distributed an internal memo that aimed to encourage state DOTs to use new federal infrastructure law dollars for repairing highways over highway expansions. The language was similar to a provision offered by House Transportation Committee chair Peter DeFazio (D-Ore.) that ultimately didn't make it into the law.

In response to questions from Capito and others, DOT secretary Pete Buttigieg said at a Senate EPW hearing in March that states ultimately have the final say on how infrastructure dollars set by formula levels are spent. Buttigieg has said that the memo does apply to how DOT evaluates competitive grant applications.

"It certainly reflects our priorities when it comes to discretionary grants, for example, as provided for in the law," Buttigieg said, adding that DOT will consider "safety, the state of good repair, economic strength and resilience" as it determines grant applications. "With regard to the formulas, the states will be making these calls."

What's next: Capito said she will introduce a resolution of disapproval "to ensure the IIJA is implemented as written, our states have the flexibility we provided them, and we maximize the investments made in America’s highways, roads, and bridges.”

Congress has a 60 legislative day window to overrule a rule once it is submitted by a simple majority vote. GAO said the memo, because it meets the definition of a new rule, is subject to submission requirements.

But Democrats will retain control of the Senate in the new Congress — and Carper's opposition in particular diminishes the chances of passing a joint resolution that would reach President Joe Biden's desk.