House subcommittee opens surface-transportation reauthorization with warnings on funding, trust fund solvency and a paused administration order

Chairman Rausser opened the House Transportation and Infrastructure Subcommittee on Highways and Transit hearing on Jan. 23, 2025, by setting reauthorization of the nation’s surface-transportation programs as the subcommittee’s priority and urging a bipartisan, member-driven bill to follow the 2021 Infrastructure Investment and Jobs Act (IIJA), also called the Bipartisan Infrastructure Law (BIL).

The hearing featured opening statements from Ranking Member Eleanor Holmes Norton and several members who emphasized different priorities: safety, resiliency and maintaining investment in formula highway programs. Witnesses from the American Association of State Highway and Transportation Officials (AASHTO), the American Trucking Associations (ATA), Vulcan Materials Company and the Transportation Trades Department, AFL-CIO, described how federal funding from IIJA has been spent and the remaining challenges in delivering projects to communities.

Why it matters: IIJA authorized surface transportation programs through Sept. 30, 2026, and provided a major infusion of funding that state and local agencies have used to build and repair roads, bridges and transit. Multiple witnesses told the subcommittee that nominal increases in IIJA formula funding were substantially eroded by recent construction inflation, reducing purchasing power and complicating state multiyear planning.

AASHTO Executive Director Jim Timon testified that formula funds have spent out far faster than discretionary grants, and urged that the next reauthorization start from IIJA funding levels and provide states more flexibility. Timon pointed to a Congressional Budget Office estimate that 67% of formula dollars had been spent in the first two years after allocation, compared with single-digit spendout rates for discretionary grants.

Several members and witnesses flagged the Highway Trust Fund’s long-term solvency as a central issue for reauthorization. Vulcan Materials’ Janet Cavanokey told the committee Congressional Budget Office estimates show a projected Highway Trust Fund gap of roughly $18 billion by fiscal 2028 under flat spending assumptions and a cumulative shortfall through 2031 on the order of $136 billion.

Complicating near-term delivery, witnesses said, was an executive order issued by President Trump on Jan. 20, 2025, directing agencies to pause disbursement of certain funds appropriated by IIJA and the Inflation Reduction Act. Witnesses said early implementation of that order briefly halted some reimbursement processing and caused alarm among state departments of transportation until U.S. Department of Transportation and Office of Management and Budget officials clarified which programs would continue to flow. AASHTO said it had worked with the agencies to get assurances that most formula reimbursements would proceed and described the initial pause as a cause of “panic” in the state DOT community.

Other crosscutting issues raised at the hearing included continued pressure from construction inflation, the need for predictable multi‑year contract authority, and the difficulty that discretionary competitive grants have shown in moving money quickly into projects.

Members said the subcommittee will begin drafting reauthorization language to address these concerns, with broad themes including predictability for state planning, a careful look at formula versus discretionary balances, and options to shore up Highway Trust Fund revenues.