The collapse of the Francis Scott Key Bridge near Baltimore was a tragedy that resulted in the deaths of six construction workers. It is a major loss for the highway network and the Port of Baltimore. It will require significant efforts by many concerned parties to clear the wreckage and rebuild the bridge.
None of those facts makes either the cleanup or the rebuilding a solely federal task, and Joe Biden was wrong to promise that the federal government will “pay for the entire cost of reconstructing that bridge” in his remarks on March 26.
The Francis Scott Key Bridge was part of Interstate 695, which is the beltway bypass around Baltimore. Interstate highways are owned and operated by the states. The Francis Scott Key Bridge in particular was owned and operated by the Maryland Transportation Authority, a separate agency under the Maryland Department of Transportation responsible for operating Maryland’s toll bridges, tunnels, and highways. Thus the tolls collected by the bridge go to the Maryland Transportation Authority, not to the federal treasury. Biden does not propose to change that.
In 2022, the most recent year for which data are available, total government highway expenditures in the United States were $232 billion, according to the Peter G. Peterson Foundation. Only 22 percent of that came from the federal government. The rest came from state and local governments, which have their own taxing, spending, and borrowing powers. It should be a long-term goal of federal policy to have states fully fund the highways they already own and operate.
There is clearly a federal role during cleanup efforts. The Coast Guard exists in part for this sort of emergency. The National Transportation Safety Board exists to investigate accidents like this one. The Army Corps of Engineers contracts with private companies to help with salvage and debris removal. All of that costs money, and that money rightly comes from the federal government.
There is nothing new about federal funding to help states with emergency repairs to highway infrastructure. The Congressional Research Service traces provisions of federal law for that purpose back to 1934, more than 20 years before the Interstate Highway System was created.
But Biden did not only promise help. He promised to pick up the tab. Not only should federal taxpayers not be on the hook for the entire repair process, Congress should not allocate a single penny of additional funding beyond what is already available.
In 2021, the federal government passed $1.1 trillion in infrastructure spending. Most of that money has not yet been spent. To the extent that federal funding is needed, the federal government should pull funding from that law, amending it if necessary. This project is clearly a more pressing concern than any number of other projects that might be covered by the law, and the Department of Transportation should tell other prospective grantees who might be crowded out that life isn’t fair.
There is no reason Maryland shouldn’t share the burden. Under existing emergency-repair law for highways, federal funding is capped at 80 percent of the total cost for highway projects such as the Key Bridge, but the binding constraint here is that emergency funding is capped at $100 million per year, which is already appropriated. The Key Bridge replacement will cost over $1 billion. Congress should not allow 100 percent coverage, and it should not appropriate any extra money to get there.
Maryland ran a budget surplus in each of its last three fiscal years, and the state’s rainy-day fund has a balance of about $2.5 billion. The magnitudes of those surpluses were in part due to federal aid during Covid that largely proved unnecessary, as states saw significant tax-collection increases during the pandemic and did not face the deficits that federal policy-makers feared. Even after policy-makers knew better, Democrats doubled down with even more federal aid to state governments in the American Rescue Plan Act. Adding more federal money now is not necessary.
Proponents of full federal funding might point to the precedent created by the collapse of the I-35W bridge in Minneapolis in 2007. The federal government did provide emergency funding approved by Congress to cover the full cost of that bridge’s replacement. This is a bad analogy for three reasons.
First, the federal government had not passed a $1.1 trillion infrastructure law three years prior to the Minneapolis bridge collapse that it could pull money from. Second, that bridge collapse was due to poor design and maintenance. The Francis Scott Key Bridge’s collapse is not a great example for the argument that the nation’s infrastructure is crumbling — it had satisfactory ratings from the Federal Highway Administration and was not known to have safety issues prior to the ship accident. Third, the federal decision to fund the Minneapolis bridge replacement was wrongheaded. It created a moral hazard where states expect federal funding to make up for their maintenance irresponsibility if a catastrophe happens.
That doesn’t mean the federal government should do nothing for Baltimore. In addition to its aforementioned proper roles in the cleanup effort and limited funding aid, the federal government should waive every environmental regulation that would hinder rebuilding the bridge. No one should have to complete a single environmental-impact statement to rebuild a bridge that was already there. The federal government should also waive any domestic-content requirements or wage rules that might apply to the project. Waiving those requirements would be a form of federal aid without depleting any money from the Treasury, since Maryland would no longer have to comply with federal rules forcing it to overpay.
Maryland officials should follow suit, waiving any state-level prevailing-wage rules and environmental regulations that could slow the rebuilding. They should also consider privatizing the bridge. A toll bridge is a prime candidate for privatization, and the bridge is already managed separately from most of the state’s highway infrastructure. A private owner-operator would have strong incentives to complete the project quickly and safely, to maximize toll revenue in the short and long run.
There is plenty the federal government can and should do to help Maryland after this disaster. But it should help, not fund the entire replacement, and it should do so with money already available, not with additional spending.