The nation's fiscal crisis, and the fact that federal resources available for investment in the nation's transportation system are likely to be constrained for many years, create an urgent need for reform in the way that federal transportation programs are structured and implemented. As the Bipartisan Policy Center (BPC) has advocated, federal funds should be used to address national goals, and principles of outcomes, performance, measurement, and accountability should come to characterize federal programs.

These essential reforms will necessarily prompt a reorientation of the federal-state partnership in surface transportation programs. This does not mean that the federal government should, or will, exercise more (or less) oversight of state and local program implementation, but, instead, the nature of federal oversight should change. If there is to be federal funding support for state and local transportation programs and projects, Congress should be clear about the national goals that are to be pursued, even as the federal government is permissive about how,states and localities pursue those goals.

Under such a reform program states and localities should have the freedom and discretion to put together their own mix of capital projects and operating initiatives that use federal funds, but they should be held accountable for demonstrating that their programs can make, and have made, progress toward the achievement of broad national goals, such as economic growth or national connectivity or safety. In this setting, federal oversight should focus on assessing the substantive performance of these state and local programs.

While the scope of these reforms is considerable, it is likely that their implementation will be gradual and incremental. Indeed, the Senate-passed surface transportation bill, MAP-21, proposes some significant initial steps toward such a performance-based and accountable program.

While we need to invest more in our transportation infrastructure, the fiscal and political realities that the nation faces make it likely that public investment capital will be constrained. Those circumstances require that we invest the federal funds that are available "wisely" and that states and localities should be held accountable for investing in those programs and projects that achieve the greatest returns, and that promise the greatest benefits, in terms of clear and broadly accepted national goals. The federal-state partnership in transportation should be structured around these principles.

$90 billion is being invested each year in highway and bridge improvements by states and their local governments to enable safe and efficient travel throughout America. About $36 billion of that amount is provided by the federal government. States deliver these projects as swiftly and efficiently as possible and are held accountable for results by their governors, state legislators, state laws, the press and the citizens of their states. Each week AASHTO features a success story of states that are delivering projects ahead of time and under budget. When federal dollars are involved, project delivery often takes longer which results in higher costs. We are working with Congress to fix these problems. If anything, states need less oversight from the federal government, not more.

The recent GAO review cited by the National Journal made several recommendations which, we believe, make sense. The recommendations are first, that the federal highway program becomes one that is performance-based; and second that FHWA narrows its responsibilities and devolves more responsibility for managing the program to the states. One other matter noted by GAO was that "over the years, the federal-aid highway program has expanded to encompass broader goals ... As the program grew more complex, FHWA's oversight role also expanded while its resources have not kept pace."

We support the reforms included in both House and Senate legislation to consolidate the federal highway program and speed up the process of project approval. We also support their initiatives to require states to measure performance and report on results. We believe a two-part approach will be essential to implement this concept. First, USDOT in partnership with state DOTs and their local governments and stakeholders should develop a list of factors to be measured and how best to measure them. Second, state DOTs and metropolitan planning organizations should establish targets for improving performance and report to Washington regularly on the progress being made.

In legislation pending before the joint Senate-House Conference Committee are proposals to eliminate Congressional earmarks, reduce discretionary programs where decisions on how to distribute funding are made in Washington, and increase the percentage of the program distributed by formula to the states. Congress recognizes that states and their local governments are better positioned to select which investments best meet community priorities and which will do the most good.

We did want to take one minor exception to your description of the federal-aid highway system, with the states implementing projects and maintaining them, and the federal government "setting standards and providing funding." Actually, the states, through AASHTO, set standards for highways and bridges in this country and have done so since 1914. From time to time, FHWA adopts our standards as their own through formal rulemaking. FHWA is charged with assuring that states comply with a complex array of federal laws which govern the program. But standard setting is something in which state DOTs, through AASHTO, continue to lead the way.