March 2, 2016

Fifty years ago today, on March 2, 1966, President Lyndon Johnson transmitted to Congress his special message on transportation. The message proposed the creation of a new Cabinet-level Department of Transportation to combine most federal highway, aviation, rail, and maritime transportation programs under one roof. The message also proposed a new federal role in reducing highway safety fatalities and a strengthening of the executive functions of the chairman of the Interstate Commerce Commission (and giving the President the authority to appoint the chairman).

The President’s message stated that:

The United States is the only major nation in the world that relies primarily upon privately owned and operated transportation.

That national policy has served us well. It must be continued.

But private ownership has been made feasible only by the use of publicly granted authority and the investment of public resources…Enlightened government has served as a full partner with private enterprise in meeting America’s urgent need for mobility.

That partnership must now be strengthened with all the means that creative federalism can provide. The costs of a transportation paralysis in the years ahead are too severe. The rewards of an efficient system are too great. We cannot afford the luxury of drift – or proceed with “business as usual.”

The message proposed that the new Department bring together the various transportation modes under the unified direction of a Secretary of Transportation (who would retain the general transportation policy and emergency transportation responsibilities of the Under Secretary of Commerce for Transportation):

• Roads and bridges – Bureau of Public Roads (from the Department of Commerce), as well as the legal authority (from the U.S. Army Corps of Engineers) to regulate tolls on bridges and tunnels.
• Airports and airways – the independent Federal Aviation Agency, the aviation safety oversight and accident investigation functions of the Civil Aeronautics Board, and the aviation loan guarantee and war risk insurance programs of Commerce.
• Railroads – the safety and car service functions of the Interstate Commerce Commission, the high-speed rail program of the Commerce Department, and the Alaska Railroad (from the Interior Department).
• Maritime and waterways – the Coast Guard (from the Treasury Department), the Maritime Administration and Great Lakes Pilotage Administration (from Commerce), and the St. Lawrence Seaway Development Corporation.

The DOT proposal was a long time coming. Various blue-ribbon panels had been recommending a DOT since 1937 (the Senate’s Byrd Committee), 1949 (the first Hoover Commission’s task force on transportation), and most recently 1961 (the Senate’s “Doyle Report”). An internal White House task force had recommended the establishment of a DOT in November 1964, but the President chose not to pursue that task force’s recommendations as part of his 1965 legislative agenda.

The topic was broached again at the highest levels in June 1965, when the retiring FAA Administrator wrote to President Johnson recommending establishment of a DOT. President Johnson asked his budget director to review the DOT proposal and then ordered his aide Bill Moyers to set up another interagency task force in August 1965 to produce a transportation legislative agenda for 1966.

The 1965 task force was co-chaired by Alan S. Boyd, the Under Secretary of Commerce for Transportation, and Charles Zwick, the assistant director of the Bureau of the Budget. The task force sent back an initial round of working papers quickly, noting that, “On the question of reorganization, the recommendation is for a Department of Transportation. There seems to be widespread agreement within the Government that this is the most logical course.”

Despite some internal complaints from White House economic advisers and budget advisers about how the task force was conducting its business, things had progressed far enough by September 22, 1965 for President Johnson to sign off on a decision memo directing the Commerce Department to produce a detailed four-point transportation plan for 1966: 1) creation of a DOT, 2) a reorganization of transportation regulatory agencies, 3) a “program of deregulation to make transportation rates more competitive and rational,” and 4) a major highway safety program. (LBJ wrote “Hooray! – L” next to the check mark he put in the “Approved” line at the bottom of the memo.)

By October 22, Commerce was producing detailed position papers, and the Budget Bureau responded in November with detailed responses. (The central idea of a DOT was never in doubt, but the details varied.) The following month, senior White House staffers began holding off-the-record outreach meetings with stakeholder groups (trucking, railroad, inland waterway and railroad interests). Commerce produced more refined memoranda on the various parts of the transportation agenda on December 17.

One possible hiccup arose on December 20, 1965, when the FAA Administrator, Gen. William “Bozo” McKee, sent the White House an unsigned memo recommending that a DOT not be created and that the FAA be left independent. Under Secretary Boyd responded with a point-by-point refutation of McKee’s arguments a few weeks later.

President Johnson was ready by January 12, 1966, to mention the creation of a new Department of Transportation (and the highway safety program) in his State of the Union address. By that point, the White House was already briefing key Congressional committee leaders on the outlines of the upcoming transportation message.

By the end of that month, the details were coming together. On January 28, White House aides asked the President to settle disputes over the inclusion of the Coast Guard in the new DOT and the division of responsibilities on aviation subsidies (between DOT and CAB) and on mass transit (between DOT and HUD). Johnson told them to keep working with the agencies to get agreement themselves. By February 1, those issues had been solved, and LBJ signed off on the decisions relating to the final legislative package.

In that final package, the composition of the proposed Department of Transportation stayed basically the same as it had throughout the various iterations of the proposal, and the final version of the highway safety proposal didn’t change that much, either. But the proposals for reforming the economic regulation of transportation did not make the final cut. A proposal to combine the Interstate Commerce Commission, the Civil Aeronautics Board, and the Federal Maritime Commission into a single regulatory agency was rejected early on, as was wholesale liberalization of economic regulations. Even at the very end of the process, Under Secretary Boyd was holding out hope for some targeted changes to the framework of rate regulation, but the President decided to “wait with all these until next year.”

In the end, the only thing left on the economic regulation side of the President’s 1966 transportation message was the proposal to have the ICC chairman named by the President (instead of an annual rotation between the eleven ICC members), and strengthening the chairman’s administrative powers. The message promised that the President “shall shortly submit to the Congress a reorganization plan” carrying out the ICC reforms.

(Johnson, worried that agitated carriers or shippers might push back against the DOT proposal, never submitted the reorganization plan that would allow the President to appoint the ICC chairman and strengthen the chairman’s administrative powers. That reform would have to wait for Richard Nixon, in 1969.)

Throughout February of 1966, the White House and the Commerce Department worked to turn the plan into legislative text and to brief key legislators in Congress (party leaders and the members of key committees). Memos of these briefings are in two tranches: February 7 through 17 and February 18 through 28. As of February 28, of the 14-member Senate Government Operations Committee, the White House counted 8 members in favor of the DOT plan and 5 noncommittal or reserving judgment. In the 33-member House Government Operations panel, the White House counted 17 in favor and 1 declared against, with 11 undecided.

The actual date of transmission of the transportation message to Congress was determined by when the Senate sponsor of the DOT legislation, Commerce chairman Warren Magnuson (D-WA), got back from an overseas trip to Sweden. That turned out to be March 2, and when the House and Senate convened for business that day, the message sent over from the White House was waiting on them. In the House, the Speaker had the message read and then Majority Leader Carl Albert (D-OK) organized a few people to speak in favor of a Department of Transportation, including Rep. Chet Holifield (D-CA), a senior member of the Government Operations Committee who had been chosen by the White House to introduce the DOT bill in the House.

In the Senate, Magnuson took to the floor after the message was read and spoke in favor of the DOT bill, which he had introduced in the Senate as S. 3010. (The text of S. 3010 was identical to the House bill, H.R. 13200 – the text is here.) The White House would soon give a voluminous briefing book to each member of the House and Senate Government Operations Committees explaining the details of the bill and the rationale for the proposal.

The initial news coverage of the transportation plan was largely positive, but two headlines from The New York Times in the following two days indicated trouble ahead. March 3: “Transport Plan Is Called Biased; Water Carriers Critical of Johnson Economic Aides”. And March 4: “Transport Plan’s Peril; Johnson’s Move to Set Cost-Benefit Standards Is Opposed in Congress.” Both articles referred to section 7 of the proposed DOT bill, which was drafted to give the Secretary of Transportation the authority to set standards for the cost-benefit analysis of “all proposals for the investment of Federal funds in transportation facilities and equipment” (except for Pentagon facilities, the Panama Canal, and Federal procurement of facilities for government use).

The Commerce Department had notified the White House on February 15 that “It is obvious from our Congressional contacts that the Corps of Engineers has been laying the groundwork for possible opposition to giving the new Secretary of Transportation a voice in navigation projects. Apparently the Corps is giving Congressmen the pitch that such an arrangement will make it harder to get these projects dear to a Congressman’s heart.”

The debate over whether the new DOT could set cost-benefit standards for Corps water projects – and the debate over inclusion of the Maritime Administration in the new Department – would be the two biggest points of contention during the 27 weeks of debate between the introduction of the DOT proposal on March 2, 1966 and the enactment of the legislation into law on October 15, 1966.

(The documents linked in this article, and many others, can be found on Eno’s work-in-progress Documentary History of the Creation of the U.S. Department of Transportation webpage.)