Today, President Biden visited Baltimore to see the collapsed Francis Scott Key Bridge that is currently blocking the Patapsco River Channel and thus blocking entrance to most of the Port of Baltimore.

In coordination with the President’s visit, the Director of the White House Office of Management and Budget sent a letter to Congressional committee leaders asking for “Congress to join us in demonstrating our commitment to aid in recovery efforts by authorizing a 100 percent federal cost share for rebuilding the bridge. This authorization would be consistent with past catastrophic bridge collapses, including in 2007, when the Congress acted in a bipartisan manner within days of the I-35W bridge collapse in Minnesota.”

Meanwhile, yesterday the U.S. Army Corps of Engineers announced a tentative timetable for clearing the debris, re-dredging the channel, and reopening access to the port:

• “USACE expects to open a limited access channel 280 feet wide and 35 feet deep, to the Port of Baltimore within the next four weeks — by the end of April. This channel would support one-way traffic in and out of the Port of Baltimore for barge container service and some roll on/roll off vessels that move automobiles and farm equipment to and from the port.”
• “USACE engineers are aiming to reopen the permanent, 700-foot-wide by 50-foot-deep federal navigation channel by the end of May, restoring port access to normal capacity.”

What comes next?

Precedent

In the past, Congress has reacted to major Interstate highway bridge disasters by repairing the bridge, or reconstructing a bridge of the exact same capacity in the exact same alignment, at a 100 percent federal cost share. But they did it slightly differently each time.

Interstate 10 Twin Spans Bridge, Louisiana

• Partially collapsed Aug 29, 2005
• $629 million in ER funds appropriated Dec 30, 2005 with 100% federal share designation in the appropriations act – see page 119 Stat. 2778 here

Interstate 35W Bridge, Minnesota

• Completely collapsed Aug 1, 2007
• Future replacement bridge deemed ER-eligible at 100% federal share by PL 110-56 on August 6, 2007
• $195 million in non-ER funds appropriated Dec. 26, 2007 – see page 121 Stat. 2384 here

As you can see, in both instances, Congress did not actually provide any money for bridge repair or replacement until four or five months had passed since the disaster – long enough for the state DOT to figure out exactly what scope of work they wanted done and to arrive at a firm cost estimate.

Interestingly, while Congress funded the 2005 Twin Spans repairs by appropriating money into the ER account, they funded I-35W reconstruction by appropriating money outside ER, instead creating a separate budget account, “I-35W Bridge Repair and Reconstruction” (069-0550), which made it possible to track the annual spendout of the money for this specific project in the annual Treasury reporting. The bulk of the $195 million was outlaid in the first two fiscal years, but the last $20 million took nine more years to trickle out.

Current ER status

The Emergency Relief fund is, at present, oversubscribed (as it almost always is, with annual guaranteed income of only $100 million per year and annual outlays hovering around the $800 million per year mark).

As of March 26, states and territories had filed $1.835 billion in claims (not counting the Key Bridge). $722 million of that is in California, and another $807 million in five other states (Alaska, Hawaii, Tennessee, Vermont, and Washington) and Puerto Rico. The other $306 million in claims is spread across 23 other states and the Virgin Islands.

When combined with $211 million in ER claims on federally-owned land or Tribal lands, a total of $2.047 billion in needs are identified, but available balances in the fund only total $951 million, leaving an unfunded balance of $1.096 billion.

The normal procedure is for Congress to “top off” the ER account with emergency appropriations in the next natural disaster appropriations bill (whenever that is). Emergency-designated appropriations mean that Congress and the President deems them so important that they can be added directly to the deficit, without having to fit under budget ceilings or be offset by spending cuts elsewhere.

What’s different this time

Insurance. Unlike previous bridge collapses, there is the potential for a signifiant recovery of bridge repair/replacement costs from private insurers (unlike those previous bridge disasters stemming from “acts of God”). FHWA has informed us that “the ER regulations require a State to make diligent efforts to recover repair costs as a result of events where highway damages are caused by ships, barge tows, highway vehicles, vehicles with illegal loads, and similarly improperly controlled objects or events. ER funds can be used to pay remaining costs not covered by another Federal program, compensation from insurance or other source. In the situation involving the Key Bridge, FHWA is providing Maryland ER funds now and, based on any compensation it receives in the future, Maryland would refund ER funds later.”

OMB Director Young’s letter today did say that “all avenues to recover the costs of past, current, and future work will continue to be pursued and the Administration will ensure that any compensation for damages or insurance proceeds collected will reduce costs for the American people.”

New bridge program. Unlike when previous bridge disasters struck, this time, the Secretary of Transportation is sitting on at least $9 billion in unused, unallocated funding that can only be used for bridge repair and replacement, separate from the emergency relief program. The IIJA of 2021 created the Bridge Improvement Program (BIP), and only the first year of five years worth of funding has been awarded. In that first year, Congress gave $2.1 billion to rebuild or repair four large bridges ($1.385 billion for a new Brent Spence Bridge, $400 million for Golden Gate Bridge seismic retrofit, $158 million to refit the Goldstar Bridge in Connecticut, and $145 million for Calumet River bridges in Chicago).

DOT is currently working through applications for the $4.6-ish billion they anticipate being awarded from this program in the combined FY 2023-2024 cycle, but no awards have yet been announced. Another $4.6 or so billion will be available over FY 2025-2026.

When Katrina took out the Twin Spans, and when I-35W collapsed because of flawed design, there was no program like the BIP, and there was no way to fund those bridges without resorting to deficit spending. But the appropriations for BIP have already been made, and the spending from those appropriations has already been counted towards future deficits in both the budget baselines and in President Biden’s budget, so deeming bridge replacement costs to come from that fund would not involve any new appropriations.

Or, since the underlying BIP statute (23 U.S.C. §124) caps the BIP share of a large bridge project at 50 percent of total capital cost, Congress could find half the money there and pay for the rest via ER, or make some other funding determination.

Waiting

In any case, Congress doesn’t have to decide anytime soon. First, Maryland has to decide what kind of bridge they want to build. If they want simply to replicate the size, capacity, and location of the bridge that just collapsed, there is a strong precedential argument for the federal government to pay up to 100 percent of the costs. But if the state wants to expand the scope of the bridge, or move the alignment, or increase capacity, the argument for giving Maryland 100 percent federal share (“free”) money for improvements that the other 49 states would have to bear out of their own regular highway budgets is much weaker. Until Maryland decides what kind of bridge it wants, it’s too soon for the federal government to make final funding decisions.