This article is a part of our series From Lighthouses to Electric Chargers: A Presidential Series on Transportation Innovations

President Ronald W. Reagan

Ronald Reagan defeated incumbent President Jimmy Carter in 1980, taking office amid high inflation, energy shortages, and widespread economic uncertainty. Though best known for his economic and foreign policies, Reagan reshaped transportation by advancing landmark safety reforms, securing new user-based funding, devolving regional operations, and modernizing national systems like air traffic control. His choices set lasting precedents for the federal role in transportation.

Strengthening transportation safety

The signature safety issue adopted by President Reagan was drunk driving. Reagan signed an executive order in 1982 creating the first Presidential Commission on Drunk Driving, chaired by former Transportation Secretary John Volpe. The final report of the Commission recommended that Congress pass a law allowing the Secretary of Transportation to cut off all federal highway funding to states that did not adopt a minimum drinking age of 21. (At the time, fewer than half of the states had such laws.)

Members of Congress quickly introduced legislation implementing that recommendation, weakening it for legal reasons to force states to forfeit up to 10 percent of their total formula funding if they did not raise their drinking age. The Reagan Administration announced its formal support for this revised approach in June 1984. Two weeks later, the Senate passed the bill, and the House cleared it for the President’s signature.

At the bill signing in July 1984, the President said, “This problem is bigger than the individual States. It’s a grave national problem, and it touches all our lives. With the problem so clear-cut and the proven solution at hand, we have no misgiving about this judicious use of Federal power. I’m convinced that it will help persuade State legislators to act in the national interest to save our children’s lives, by raising the drinking age to 21 across the country.”

The new law’s use of partial federal funding withholding as a spur to state action had to be upheld by the U.S. Supreme Court in a landmark case (South Dakota v. Dole), but it remains on the books today. As of 2017, NHTSA estimated that the 21-year-old minimum drinking age had saved almost 32,000 lives over the years.

In addition, it was the Reagan Administration that finally settled the issue of passive versus active restraint systems in new vehicles. The first seat belt mandate, in 1967, required “active” restraints (the driver or passenger has to take action to connect the belt around themselves). Within two years, NHTSA was also considering the issue of “passive” restraints, where the belt or some other safety system restrains occupants whether or not the driver or passenger takes any action.

The issue of mandating passive restraints went back and forth from 1969 to 1984 – a 1971 final rule was overturned by a federal appeals court in 1972, a subsequent rule requiring engine interlocks deactivated by seat belt use was overturned by Congress in 1974, and a 1976 Ford Administration decision to forgo a mandate in favor of a national demonstration program was reversed by the Carter Administration in 1977, with the result that a mandate for passive restraint systems would be phased in over model years 1982-1984.

In the interim, the 1979-1980 energy crisis, the ongoing inflation crisis, and the double-digit interest rates needed to fight the inflation crisis caused severe stress to U.S. automakers, with Chrysler needing a federal bailout. In response, Reagan’s first transportation secretary, Drew Lewis, quickly ordered a one-year delay in active restraint implementation, and then later that year rescinded the automatic restraint requirements altogether on cost-benefit grounds – but that decision was overturned by the U.S. Supreme Court on procedural grounds in 1983.

NHTSA then restarted the comment process on a new rule, and finally, Secretary Elizabeth Dole produced a final rule that allowed manufacturers and states the maximum flexibility possible. The mandate for phased-in active restraint systems in all new cars was reinstated, but automakers were free to choose the kind of system (automatic belts, air bags, or other systems). However, the rule also provided that, if enough states passed their own effective mandatory seat belt usage laws by April 1989, the mandate on automakers could be avoided. (This rule was challenged in court but upheld by the D.C. Circuit in 1986 and not reviewed by the Supreme Court.)

Between that final rule and the end of the Reagan Administration, the first 30 states (and the District of Columbia) enacted their own seat belt enforcement laws, and today such laws exist in all 50 states. That resulted in a pitched battle over several years in all fifty state legislatures.  For state seat belt laws to be counted under the federal regulations, each had to meet simple criteria to be sure they would be enforced and effective.  The outcome was passage of seat belt laws in all fifty states.  However, proponents of active restraints successfully lobbied in each state to be sure that the seat belt laws failed to meet the federal criteria. This resulted in both seat belt laws in every state and the phase in of active restraints nationally.

The combination of active restraints and seat belt laws has saved hundreds of thousands of lives (including mine) over the last 40 years and has reduced serious injuries by even more. On that basis alone, the outcome was a great success.  Additionally, by giving the states a major role in deciding whether the federal rule would be implemented, President Reagan and Secretary Dole created a unique version of “federalism” in action.

December 3, 1987 Swearing in of James Burnley as Secretary of Transportation

And finally, President Reagan’s 1986 Executive Order mandating drug-free federal workplaces led the Health and Human Services Department to develop standard drug testing protocols, which led to the interim final rule I was proud to publish in November 1988 requiring mandatory drug testing for transportation operating personnel across the aviation, motor carrier, railroad, maritime, mass transit, and pipeline sectors. These rules were made final by the Bush Administration in December 1989 and given strong legislative backing by a nearly unanimous Congress in 1991.

Increasing infrastructure funding

In 1981, Ronald Reagan took office after a decade of severe inflation. The federal motor fuels taxes had been set at four cents per gallon since 1959, but inflation had robbed those taxes of three-fourths of their buying power, as construction costs had increased by more than 300 percent since 1959. At the same time, the useful life of much of the post-WWII highway and bridge construction was coming to an end, with significant new spending needed.

President Reagan empowered his first Secretary of Transportation, Drew Lewis, to find a solution to the problem. Over nearly two years, Lewis reached out to stakeholder groups and negotiated a plan to more than double the gasoline and diesel taxes, from four cents per gallon to nine, with one cent of the increase set aside for mass transit.

As Eno Center research shows, while Reagan was leery of tax increases in general, he also believed that people had to pay for the services they received. His first budget, months after taking office, proposed significant fuel tax increases for aviation and for inland waterway barge towing vessels in order to rectify gaps in the user-pay system in those sectors. Although he did wait until just after the 1982 elections, Reagan gave his strong support to Lewis’s plan, which became law in January 1983. This was the last time that motor fuel taxes were increased solely for transportation purposes, and the last time federal highway user taxes were synchronized with a cost allocation study.

It was also Ronald Reagan who broke a decades-long dispute between the White House and Congress over the prioritization and funding of Army Corps of Engineers water projects. Reagan’s team negotiated the passage of the 1986 law creating a user-financed Harbor Maintenance Trust Fund, which has raised and spent $32.3 billion since then from ship operators to keep ports open.

Ending federal operation of local and regional transportation

President Reagan believed strongly in getting the federal government out of the business of operating transportation systems that were strictly local or regional.

• The federal government had inherited responsibility for a network of bankrupt and unprofitable railroads in the Northeastern U.S. in the early 1970s. After splitting off intercity passenger service (to Amtrak) and selling what freight assets it could, by the late 1970s the government was left running an unprofitable regional railroad (Conrail). President Reagan signed a law in 1981 turning Conrail’s passenger operations (commuter rail) over to local authorities in New York, New Jersey, Boston, and Philadelphia, and putting Conrail’s freight operations on a path to profitability. By 1987, Conrail was able to go public at $28 per share (the largest IPO for an industrial company in U.S. history at that time), earning the federal government $1.6 billion towards deficit reduction.
• Alaska Railroad. When Alaska was a U.S. territory, under Presidents Wilson, Coolidge, and Harding, the federal government built a railroad from Seward to Fairbanks. It was operated and funded at first by the Interior Department, and then after 1967, by the Transportation Department. President Reagan signed a law in 1982 authorizing the sale of the railroad to the State of Alaska, and the sale was executed in 1985.
• D.C.-area airports. Pursuant to federal jurisdiction over the District of Columbia, the federal government built two airports in the Virginia suburbs of Washington, D.C. (Washington National Airport and Dulles International Airport), which were operated directly by the FAA. Secretary Dole could not understand why the national transportation agency should own and operate two commercial airports. Furthermore, since the airports had to depend on annual federal appropriations, very few capital improvements were possible.  That was because, unlike every other commercial airport in the country, the airports couldn’t raise capital for major improvements by tapping the municipal bond market. After a spirited legislative process (many members of Congress considered Washington National Airport to be “their” airport), President Reagan signed a law in 1986 authorizing a new joint Virginia-D.C. entity, the Metropolitan Washington Airports Authority, to lease and operate both airports locally. The lease was signed in June 1987, and MWAA has run those airports ever since.

Reagan’s efforts to stop federal micromanagement of local transportation were not always successful. He vetoed the 1987 surface transportation bill because of what he felt was wasteful spending, particularly earmarked funding for individual projects in the states and districts of powerful legislators, substituting federal control for state and local control. He said the bill was “a textbook example of special interest, pork-barrel politics at work, and I have no choice but to veto it.” By far the biggest earmark was for the Central Artery Project in Speaker Tip O’Neill’s district in Boston.

Unfortunately, the House overrode the veto, 350 to 73, and then the Senate narrowly followed suit, 67 to 33, allowing the bill, and its earmarked projects, to become law.

More efficient national control

Unlike regional railroads and local airports, the national air traffic control system demands a single operator, which has been the federal government since 1936. President Reagan inherited an ongoing labor dispute between air traffic controllers and the FAA over hours, wages, and benefits. The controllers’ union rejected an offer of an 11.4 percent wage increase (twice what other federal employees were receiving) and unfortunately chose to go on strike on August 3, 1981.

The strike took place despite a crystal-clear federal law on the books since 1955 that prohibited anyone striking against the government, or even asserting the right to strike against the government, from holding any kind of federal office or employment. A few hours after the strike began, Reagan said “…we cannot compare labor-management relations in the private sector with government. Government cannot close down the assembly line. It has to provide without interruption the protective services which are government’s reason for being.” He gave the 13,000 striking controllers a 48-hour grace period to report back to work before he would start enforcing the termination law.

1,236 of the striking controllers came back to work, but about 11,500 did not and were fired. (Reagan later waived the law’s lifetime ban on any kind of federal employment for the striking controllers.)

FAA management had prepared for a potential strike and were able to use non-union supervisors, the 1,236 returning controllers, retired controllers convinced to return to work, and controllers borrowed from the military. Within days, the number of flights in the air had returned to 80 percent of its pre-strike level, and was back to 100 percent capacity by the end of 1983. The independent National Transportation Safety Board concluded that safety was not compromised by the strike or the actions taken to restore service.

Air traffic control not only requires a skilled professional workforce, it also requires extensive communications and flight tracking equipment. Under the six-year air traffic control modernization plan pursuant to the 1982 reauthorization law, the amounts appropriated for ATC capital under President Reagan averaged more than 2.5 times higher than the annual average under his predecessor.

Our Administration also completed the economic deregulation of airlines begun under the Carter Administration in 1978, by passage of the Civil Aeronautics Board Sunset Act of 1984 putting a final end to that regulatory body and transferring the powers it had remaining to the Department of Transportation. This led to increased DOT involvement in oversight of not just airline competitive practices, but also of safety generally, leading to the April 1988 investigation I ordered into the fitness of Texas Air Corporation (owner at the time of Eastern and Continental).

Reagan’s transportation policies blended principle with pragmatism. He raised user taxes to sustain infrastructure, devolved local services to states and regions, and asserted federal authority when national safety was at stake. His decisions—on drinking age laws, seat belts, drug testing, funding, and air traffic control—left a durable framework that continues to shape U.S. transportation today.

James Burnley, one of the nation’s foremost authorities on transportation law and policy, was the chair of Eno between 2017 and 2024. As a partner at the law firm, Venable LLP, he now focuses on government relations and regulatory and legislative affairs, with a concentration in transportation matters. Mr. Burnley served as the U.S. Secretary of Transportation from 1987 to 1989 He also served as Deputy Secretary of Transportation from 1983 to 1987 and was General Counsel of the department in 1983.