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Part II of the FRAME Act Policy

The Architecture of Reform

Fewer programs, sharper incentives

Part II · The Architecture of Reform

The policy.

Part II rebuilds the structure through which federal surface transportation money flows. National policy (Sec. 103) declares a state of good repair the highest priority for federal investment and the Safe System Approach the governing safety doctrine. Title II then repeals several predecessor programs — the paper names the National Highway Performance Program and various transit-specific grants — and consolidates formula funding into three block grants: the State of Good Repair & Resiliency Block Grant (Sec. 203), the National Commerce & Freight Block Grant (Sec. 207), and the Community Access & Mobility Block Grant (Sec. 211). Alongside the formula structure, the Strategic Infrastructure Investment Program (Sec. 303) handles projects too large or complex for formula funding. Two cross-cutting rules complete the architecture: a Variable Federal Cost-Share (Sec. 106) that prices federal participation according to project type, and a statutory definition (Sec. 107) under which software, data systems and digital twins are infrastructure.

Part II · The Architecture of Reform

What it will do.

The three grants divide the federal interest into distinct accounts. Sec. 203 funds maintenance and rehabilitation of existing pavement, bridges, tunnels and public transportation assets, and permits resiliency retrofits against extreme weather and climate change. Sec. 207 funds the efficiency of the national supply chain: freight bottlenecks, and surface connections to public ports and intermodal facilities. Sec. 211 funds local networks that connect people to jobs and services, and expressly permits public transportation operations, active transportation infrastructure and on-demand microtransit. Sec. 303 provides a competitive route for transformative projects — the paper’s examples are new high-capacity transit systems and nationally significant bridge replacements.

The cost-share in Sec. 106 does the behavioral work. Repair projects receive a 90 percent federal share. Projects deploying proven safety countermeasures or qualified digital infrastructure and vehicle-to-everything technology receive 100 percent. A project adding new general-purpose lanes to the National Highway System for at least one mile receives 50 percent. Sec. 107 makes digital and communications modernization an eligible activity across all programs, so a state need not choose between a bridge deck and the data system that manages it.

Part II · The Architecture of Reform

What it solves.

The paper’s diagnosis is that the existing model is rigid and rewards expansion over stewardship: a uniform 80/20 split pays the same federal premium for a new lane as for the repair of the road already built, and a program structure divided by mode and purpose forces state and local sponsors to fit projects to categories rather than to need. Consolidation answers the rigidity — three broad accounts replace a myriad of legacy programs and give states and local governments flexibility to address regional challenges. The variable cost-share answers the incentive problem by making preservation the cheapest project a state can build with federal money and new general-purpose capacity the most expensive. The Sec. 107 definition answers a quieter defect: digital assets that modern operations depend on were not clearly capital at all.

Part II · The Architecture of Reform

Planned and measurable outcomes.

What the paper itself commits to — and, separately, the indicators it implies. The second list is drawn from the paper's logic; the paper does not state those as targets.

Stated in the paper

  • Consolidation of legacy formula programs into three block grants (Secs. 203, 207, 211), with strict performance targets attached to the flexibility (Part I; Part III supplies the target regime).
  • A 90 percent federal share for state-of-good-repair projects (Sec. 106).
  • A 100 percent federal share for proven safety countermeasures and qualified digital infrastructure and V2X technology (Sec. 106).
  • A 50 percent federal share for new general-purpose lane additions on the National Highway System of at least one mile (Sec. 106).
  • Resiliency retrofitting as an eligible use of the Sec. 203 grant.
  • Transit operations, active transportation and microtransit as eligible uses of the Sec. 211 grant.
  • A competitive program (Sec. 303) capable of funding high-capacity transit systems and nationally significant bridge replacements.

Indicators the paper implies (not stated targets)

  • The share of federal-aid dollars obligated to state-of-good-repair projects, before and after the cost-share change.
  • The number and mileage of new general-purpose lane projects proceeding at the 50 percent share.
  • The share of program obligations going to digital infrastructure under Sec. 107.
  • Freight bottleneck delay on corridors funded under Sec. 207.
  • The proportion of Sec. 211 funds used for operations, active transportation and microtransit, by state.

The evidence

The problem in numbers.

The problems this Part answers: congestion, and a fragmented program architecture that spends by category rather than by outcome.

63 hours / $269 billion.

The average auto commuter lost 63 hours to traffic delay in 2024, and the total cost of congestion in the United States reached $269 billion in 2024, up 16 percent over five years. As the Presentation Deck states it: delays are up 142 percent since 1990, and congestion costs $269 billion a year.

Texas A&M Transportation Institute, 2025 Urban Mobility Report (2025). Source

100+ programs.

The federal surface transportation effort is spread across more than 100 separate programs, which the Government Accountability Office found duplicative and fragmented, with no clear documentation of results.

U.S. Government Accountability Office, Opportunities to Reduce Potential Duplication in Government Programs (GAO-11-318SP, 2011), as summarized by the Senate Committee on Homeland Security and Governmental Affairs. Source

Elasticity ≈ 1.03.

For U.S. interstate highways, a 1 percent increase in lane-kilometers produces roughly a 1 percent increase in vehicle-kilometers traveled — capacity expansion in congested networks generates proportional new driving (the "fundamental law of road congestion").

Duranton & Turner, "The Fundamental Law of Road Congestion: Evidence from US Cities," American Economic Review (2011). Source

$108.8 billion.

Congestion cost the trucking industry a record $108.8 billion in 2022 (up from $94.6 billion in 2021), consuming 1.2 billion hours and $7,588 per combination truck — the freight bill for an architecture that under-prioritizes bottlenecks.

American Transportation Research Institute, Cost of Congestion to the Trucking Industry: 2024 Update (2024). Money that does not move on schedule is treated under Part III (August redistribution), where the delivery evidence sits. Source

Why this approach is the modern one

The legacy architecture spends by category: more than a hundred categorical programs (figure 2), each with its own rules, none accountable for a system outcome. The modern evidence points the other way. Duranton and Turner's result (figure 3) is the most replicated finding in the field: in congested networks, adding general-purpose lanes does not durably relieve congestion, because the new capacity induces proportional new driving. A funding architecture that pays the same federal share for a new lane as for a proven safety countermeasure or a state-of-good-repair project is pricing against the evidence. FRAME's architecture follows the finding instead: consolidated, outcome-defined block grants; a variable federal cost-share (Sec. 106) that pays 100 percent for proven safety countermeasures and qualified digital infrastructure, 90 percent for state of good repair, and only 50 percent for new general-purpose lanes; and dedicated freight investment aimed at the bottlenecks where ATRI's $108.8 billion congestion bill (figure 4) is actually incurred.

Evidence check

the induced-demand elasticity is contested at the margins — later work finds it varies with initial congestion and is weaker on uncongested networks — so FRAME hedges (a reduced cost-share and an induced-demand scorecard) rather than banning capacity outright.

Part II as a designed paper.

The policy of this part, set out in full with its evidence — a printable policy paper in the FRAME series.

Download the Part II paper (PDF)