The Federal Highway Administration FHWA

Federal road policy began with bicycles. Cyclists campaigning for paved roads persuaded Congress in 1893 to create a tiny Office of Road Inquiry in the Agriculture Department to study road building. It grew into the Bureau of Public Roads, which administered the first federal grants to state highway departments under the Federal-Aid Road Act of 1916 and, four decades later, the Federal-Aid Highway Act of June 29, 1956, which launched the 41,000-mile Interstate Highway System. The bureau became the Federal Highway Administration when the Department of Transportation opened in 1967.

The FHWA builds almost nothing itself. States plan, design, build, own, and maintain their highways, and the agency's role is to fund them and set the standards they must meet to receive the money. Federal aid covers up to 80 percent of most project costs and 90 percent of interstate work. In exchange states follow federal rules on design, safety, environmental review, and the signs and markings set out in the Manual on Uniform Traffic Control Devices, which is why a stop sign looks the same in Maine and New Mexico. The agency directly manages roads only on federal lands, such as national parks and forests.

The money comes mostly from the Highway Trust Fund, created in 1956 and fed by the federal tax on gasoline and diesel. The agency distributes about 60 billion dollars a year by formula, plus competitive grants that grew sharply under the 2021 infrastructure law. About 2,500 employees work in Washington and in a division office in every state, where engineers review projects and audit spending. The Administrator is appointed by the President and confirmed by the Senate.

The interstate system, largely complete by the 1990s, is now aging faster than it is being repaired, and the fuel tax that pays for it has lost more than a third of its purchasing power since its last increase in 1993. Electric vehicles, which pay no gas tax, deepen the gap. Proposals to replace the tax with a per-mile road user charge have been piloted in several states. The highways' legacy is also contested: urban interstates were routed through and destroyed many Black and immigrant neighborhoods in the 1950s and 1960s, and some cities now seek federal help to remove or cap them.