Five reasons why IIJA will expire without a replacement in September 2026

The general consensus starting to emerge around Washington these days amongst all the transportation trade groups, some in the media, and many legislators on Capitol Hill is that Congress will definitely pass a new five-year transportation law when the current one expires next September, and that it will have at least as much money in it as the IIJA did in 2021. This flies in the face of history and reality.

Whether from press releases from trade groups, testimony in early hearings before Congress on reauthorization, or just conversations here and there, it has somehow become the conventional wisdom that we’ll see a new transportation law pass in September 2026 when the Infrastructure Investment and Jobs Act expires. Sure, there might be a short extension while Congress hammers out some details in the fall, but “transportation has always been a bipartisan issue,” and “our country’s infrastructure is too important,” and “they came together last time to pass historic amounts of funding for highways, transit, and rail, so they’ll definitely be able to do that again.”

Anyone who has been around for the last ten years should know better. And there are countless signs on the wall that we are headed not just for a massive delay but for some fundamental changes in whatever ends up passing in 2026. Or 2029. Here are five reasons why nothing is happening by next October 1, starting with the most obvious:

1. Reauthorization failing to pass on time is the standard
2. Continuing the program at IIJA funding levels would require enormous deficit spending
3. The novel spending mechanisms used to paper over the massive deficit last time won’t work this time
4. The bipartisan coalition is already fragmenting as the administration unilaterally undermines the law Congress passed in 2021 
5. If the majority tries to remove all non-highway spending from the program, that coalition dies

1) Reauthorization has never passed on time. Why would it happen now?

Just save this graphic to share anytime you read some rosy optimist prognosticating that Congress will find a way to pass a new law on time, or maybe by the end of 2026 at the latest. 

Since 1991—a time when we were swimming in gas tax surpluses and Congress just had to figure out how to spend all that extra money—the country has operated on a short-term extension of an expired transportation law for a full third of the time. And when we moved past those surpluses of the 1990s and the insolvency of the trust fund became the most pressing issue when SAFETEA-LU expired in 2009, it took Congress 33 months and 10 separate extensions to get to MAP-21 in 2012—which only covered two years because Congress couldn’t find enough money in the couch cushions to pay for anything longer. Financially speaking, which era is our transportation program closer to as it wildly outspends what the gas tax brings in each year? 

So, for the first time in modern history, something that has never happened before is definitely going to happen? Ok, if you say so! Especially considering what’s coming next:

2) The budget reconciliation bill, which added $3 trillion to the federal deficit, likely killed the appetite for further deficit spending

The budget reconciliation law passed on July 4 blew up the federal deficit, adding over $3 trillion to the deficit while making painful cuts to popular programs that ordinary taxpayers understand, like Medicaid. The appetite for further deficit spending by this Congress will be non-existent, especially when it comes to doing it for transportation, which we like to say is right at the top…of everyone’s second page of important issues. There are already conversations about finding ways to restore some of the most unpopular cuts in the reconciliation bill, but doing so would require more deficit spending. Does anyone think that transportation is going to rank anywhere near the top when we’re talking about restoring health care for millions of people who are losing this basic, essential benefit?

3) Congress will not be able to rely on the creative spending mechanisms it used last time to cover the gap

The 2021 Infrastructure Investment and Jobs Act—which is the current transportation law—provided the highest levels of funding ever for transportation. There were massive, historic increases across the board, for roads, rail, and transit, as well as $200 billion plowed into existing grant programs and so many new competitive grant programs that you couldn’t count them with several hands full of fingers. How in the world did Congress manage to find so much money for infrastructure when the gas tax brings in less and less money each year,  roads are getting pricier, and it doesn’t come anywhere near close enough to cover the IIJA’s price tag? 

Step right up, ladies and gentlemen, and behold the magic of “advance appropriations” and deficit spending! Even back in 2021, we were highly skeptical about how this novel funding mechanism was going to work: 

In a notable change from historic practice, these supplemental [i.e, deficit spending] funds will be appropriated in advance of other priorities in the annual budget process.   … As far as how these “advance” appropriations are going to work out in practice, no one is really sure what to expect in reality over the next five years as Congress could change several times over during the 2021 infrastructure law’s lifespan. In theory, these programs provided with appropriations in advance (like transit and passenger rail) should be safer than other programs that are wholly discretionary and left up to future appropriators to decide funding each year, but it’s a real possibility that a new Congress could certainly find a way to undo some of the advance funding for programs that they deem unworthy. This will be an issue that we will be keeping a close eye on in the years ahead.

We have indeed been watching closely, and this Congress is right now 100% “finding a way to undo some of that advance funding for programs they deem unworthy” during the ongoing appropriations process for FY26. While the budget reconciliation law already took back more than $2.4 billion in funds for reconnecting communities through the Neighborhood Access and Equity grant program, House appropriators are now proposing to take away more than $100 million in Reconnecting Communities funds that were “advance appropriated,” and they are redirecting supposedly “advance appropriated” funds for the National Electrical Vehicle Infrastructure (NEVI) program into airport spending.  This is a great segue to…

4) The traditional left-right bipartisan coalition that produces these massive bills is already fragmenting

Members of Congress who were around back in 2021 and signed IIJA are now watching as their bipartisan, five-year agreement they thought they set in stone is being undermined by the Trump administration at USDOT and undone by the majority controlling the country’s purse strings. Sen. Sheldon Whitehouse (D-RI) was around for IIJA, and during a confirmation hearing for USDOT Assistant Secretary Sean McMaster, the Senator gave a foretaste of the kind of break in the traditional right-left coalition on transportation that we could see during the debate over IIJA’s replacement. From Philip Plotch at Eno: 

Senator Whitehouse told McMaster, “The chair and I both intend to deliver to you a robust bipartisan surface transportation.” But, he warned, “The gateway to success, to ultimately passing those bills, is confidence that this administration will faithfully execute the laws we pass and clear the projects we have already approved, appropriated, and obligated.” He said, “This administration has repeatedly unlawfully disrespected congressionally authorized and appropriated spending.” Looking directly at McMaster, Whitehouse rhetorically asked, “Do you understand how it would be hard for the minority to agree to a bipartisan bill if the upshot of that agreement was that only the majority’s parts of the bill were actually implemented and everything that we wanted got binned by the executive branch?” 

Fool me once, shame on you. Fool me twice, shame on me. 

That should be the lesson for smart members of Congress who are paying attention. Why spend your political capital on a bill where your priorities get shelved 3 years later? Any member of Congress—especially those in the minority—willing to cut a deal on a long-term transportation law without first exacting a promise from the administration and their colleagues to restore all of these cuts has failed to learn this lesson. Shame on them.

These actions have both undermined the use of a trust fund and the concept of a five-year authorization, where these decisions are made at once and then everyone abides by them for the law’s duration. It is yet more proof that the trust fund is dead, and the coalition that has made these past reauthorizations possible is on life support.

5) The only possible way to pass a law without deficit spending or advance appropriations is to eliminate the coalition that has made each law possible

Let’s do some math. The gas tax, which funds (a shrinking) portion of the federal transportation program, is projected to bring in about $44 billion in 2028. If the federal transportation program continues at IIJA spending levels, more than $102 billion would be going out the door, leaving a deficit of $58 billion per year.

One idea that will almost certainly be suggested at some point—especially as USDOT signals their preference for “refocusing” the federal program on core priorities—is removing a bunch of stuff from the federal transportation program, like transit, passenger rail, and other competitive grants that fund things they don’t like. This will present two problems for those who do this: 

1. The highway formula program alone costs more than $20 billion over what the gas tax brings in, so removing everything else doesn’t solve all of the problems.
2. Kicking all of those other programs out of the trust fund would be the nail in the coffin of the coalition that has made it possible to pass these expensive bills.

Does the majority feel confident that they could pass a transportation authorization on a party-line vote? If so, the Republicans will get to choose between a balanced bill that also cuts $20 billion per year from the highway program, or $20 billion in further deficit spending to finance a bill that they will need to pass entirely on their own.

The politics that have defined the passage of these laws since 1991 have been best described as “everyone gets what they want.” (And they all collectively undermine all of their priorities to do it! But that’s a conversation for another day!) Without this coalition where everyone gets what they want, it becomes infinitely more difficult to pass a law like this—especially one where Congress is deficit spending or making major structural changes.

A long-term law is not passing in 2026, so go ahead and get ready for extensions and uncertainty. It’s virtually guaranteed.