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U.S. Department of Transportation
National Transportation Library
1200 New Jersey Ave, SE
Washington, DC 20590-0001
Room Number: W12-300

The United States Department of Transportation:
A Brief History

The Department of Transportation (DOT) was established by an act of Congress, signed into law by President Lyndon B. Johnson on October 15, 1966. Its first secretary, Alan S. Boyd, took office on January 16, 1967. The department's first official day of operation was April 1, 1967.

Mission

The mission of the Department of Transportation, a cabinet-level executive department of the United States government, is to develop and coordinate policies that will provide an efficient and economical national transportation system, with due regard for need, the environment, and the national defense. It is the primary agency in the federal government with the responsibility for shaping and administering policies and programs to protect and enhance the safety, adequacy, and efficiency of the transportation system and services.

The Department of Transportation consists of the Office of the Secretary and eleven individual Operating Administrations: the Federal Aviation Administration, the Federal Highway Administration, the Federal Motor Carrier Safety Administration, the Federal Railroad Administration, the National Highway Traffic Safety Administration, the Federal Transit Administration, the Maritime Administration, the Saint Lawrence Seaway Development Corporation, the Research and Innovative Technologies Administration, the Pipeline and Hazardous Materials Safety Administration, and the Surface Transportation Board. The Homeland Security Act of 2002 authorized the establishment of the Department of Homeland Security, which, on March 1, 2003, assumed management of the United States Coast Guard and the Transportation Security Administration, formerly DOT Operating Administrations.

History

From its inception the United States government wrestled with its role in developing transportation Infrastructure and transportation policy. Often, the result has been confusion and needless complexity, leading to an overabundance of aid for some means of transportation and inadequate support for others. The law that established a cabinet-level Department of Transportation did not pass Congress until ninety-two years after the first such legislation had been introduced. Lyndon Johnson called it "the most important transportation legislation of our lifetime . . . one of the essential building blocks in our preparation for the future. . . ."

Passage of the Department of Transportation enabling act in 1966 fulfilled a dream at least as old as that of Thomas Jefferson's Treasury secretary, Albert Gallatin. Even before that, the Coast Guard and the Army Corps of Engineers had helped to foster trade and transportation. To enhance the prosperity of struggling new states and to fulfill the need for rapid, simple, and accessible transportation, Gallatin recommended in 1808 that the federal government subsidize such internal improvements as the National Road.

Just before he left office in June 1965, Najeeb Halaby, administrator of the independent Federal Aviation Agency (as it was then called), proposed the idea of a cabinet-level Department of Transportation to Johnson administration planners. He argued that the department should assume the functions then under the authority of the under secretary of commerce for transportation. Moreover, he recommended that the Federal Aviation Agency become part of that department. As he later wrote, "I guess I was a rarity-an independent agency head proposing to become less independent."

Frustrated because he thought the Defense Department had locked the Federal Aviation Agency out of the administration's supersonic transport decision-making, Halaby decided that a Department of Transportation was essential to secure decisive transportation policy development. After four-and-a-half years as administrator, he concluded that the agency could do a better job as part of an executive department that incorporated other government transportation programs. "One looks in vain," he wrote Johnson, "for a point of responsibility below the President capable of taking an evenhanded, comprehensive, authoritarian approach to the development of transportation policies or even able to assure reasonable coordination and balance among the various transportation programs of the government."

Charles Schultze, director of the Bureau of the Budget, and Joseph A. Califano, Jr., special assistant to the president, pushed for the new department. They urged Boyd, then under secretary of commerce for transportation, to explore the prospects of having a transportation department initiative prepared as part of Johnson's 1966 legislative program. On October 22, 1965, the Boyd Task Force submitted recommendations that advocated establishing a Department of Transportation that would include the Federal Aviation Agency, the Bureau of Public Roads, the Coast Guard, the Saint Lawrence Seaway Development Corporation, the Great Lakes Pilotage Association, the Car Service Division of the Interstate Commerce Commission, the subsidy function of the Civil Aeronautics Board, and the Panama Canal.

With modifications, Johnson agreed, and on March 6, 1966 he sent Congress a bill to establish a Department. The new agency would coordinate and effectively manage transportation programs, provide leadership in the resolution of transportation problems, and develop national transportation policies and programs. The department would accomplish this mission under the leadership of a secretary, an under secretary, and four staff assistant secretaries whose functions, though unspecified, expedited the line authority between the secretary and under secretary and the heads of the operating administrations.

With the proposed legislation Johnson sent Congress a carefully worded message recommending that it enact the bill as part of his attempt to improve public safety and accessibility. Johnson recognized the dilemma the American transportation system faced. While it was the best-developed system in the world, it wasted lives and resources and had proved incapable of meeting the needs of the time. "America today lacks a coordinated transportation system that permits travelers and goods to move conveniently and efficiently from one means of transportation to another, using the best characteristics of each." Johnson maintained that an up-to-date transportation system was essential to the national economic health and well-being, including employment, standard of living, accessibility, and the national defense.

After much compromise with a Congress that was jealous of its constitutional power of the purse and its relationship with the older bureaucracies, Johnson signed into law the Department of Transportation enabling act on October 15, 1966. Compromise made the final version of the bill less than what the White House wanted. Nevertheless, it was a significant move forward, producing the most sweeping reorganization of the federal government since the National Security Act of 1947.

On April 1, 1967, the Department opened for business, celebrating the "Pageant of Transportation" five and a half months after Johnson had signed the enabling legislation. Dignitaries from the department, the Smithsonian Institution, the transportation industry, and the public gathered for ceremonies on the Mall celebrating the start of the new department. Alan S. Boyd, named by Johnson as its first secretary, guaranteed that the new department would "make transportation more efficient, more economical, more expeditious and more socially responsible."

By April 1, this newest cabinet-level department was suddenly the fourth largest, with a blueprint of organization, an order providing for essential authorizations, and several leading officials on the job. It brought under one roof more than thirty transportation agencies and functions scattered throughout the government and about ninety-five thousand employees, most of whom had been with the Federal Aviation Agency, the Coast Guard, and the Bureau of Public Roads.

To Alan S. Boyd, the former Civil Aeronautics Board chairman and under secretary of commerce for transportation, fell the challenge of setting up the new department: structuring it around Congress's recommendations in the enabling act, organizing it, and setting it in motion. The new secretary faced a host of problems: creating his own immediate office, providing appropriate missions for his assistant secretaries, building the new Federal Highway Administration and the Federal Railroad Administration, helping to start the National Transportation Safety Board, and setting up an organization and management plan for the entire department.

Acknowledging the connection between transportation systems and the needs of urban areas, the White House drafted a plan to transfer urban mass transit functions to the Department that formerly resided in the Department of Housing and Urban Development (HUD). As mandated by the Department of Transportation Act, Johnson directed the secretaries of housing and urban development and transportation to inform Congress where the most "logical and efficient organization and location of urban mass transportation functions within the Executive Branch" would be. When this failed to resolve the issue, Johnson transferred most of HUD's mass transit capacity to the Department of Transportation, effective July 1, 1968. Responsibility for these programs resided in the newly established Urban Mass Transportation Administration (now the Federal Transit Administration).

By the conclusion of Boyd's administration, the department embraced the Coast Guard, the renamed Federal Aviation Administration, the Federal Highway Administration, the Federal Railroad Administration, the Saint Lawrence Seaway Development Corporation, the Urban Mass Transportation Administration, and, tangentially, the National Transportation Safety Board. Boyd's most significant achievement was to organize the department and to get it operating as a constructive governmental entity.

During his first administration, Richard M. Nixon presided over several transportation-related matters, including the bailout of the Penn Central Railroad, the launching of Amtrak, and the attempted extension of federal support for supersonic transport. He nominated as his secretary of transportation the moderate, thrice-elected governor of Massachusetts, John A. Volpe. A modern Horatio Alger, Volpe headed a construction firm that built hospitals, schools, shopping centers, public buildings, and military installations along the Eastern Seaboard and in other parts of the country. In 1968, the former federal highway administrator had been a rumored vice-presidential nominee--until Maryland governor Spiro Agnew received the nod.

In 1970, the Highway Safety Act authorized the establishment of the National Highway Traffic Safety Administration. Although the law added somewhat to the department's safety mission, the Federal Highway Administration originally had handled most of the functions that the new agency assumed. Besides establishing another operating administration and adding to the secretary's span of control and coordination workload, the Highway Safety Act separated highway administration into two parts: design, construction, and maintenance on the one hand; and highway and automobile safety on the other. Such organization ran counter to the original Departmental organizing concept for the various modes of transportation: unlike the Coast Guard and the Federal Aviation Administration, for example, the Federal Highway Administration no longer bore responsibility both for facilities and infrastructure and for safety programs.

Volpe gave highest priority to coordinating the missions of the diverse agencies placed under the department's umbrella and developing a "balanced" transportation policy. Symbolic of this effort was the establishment of the Transportation Systems Center in Cambridge, Massachusetts. He thought that he had effectively begun to coordinate separate agencies, each of which had its own constituencies on Capitol Hill, in industry, and among the public. For years, these agencies had acted autonomously and with little coordination or teamwork among themselves. Volpe believed he had begun to forge them into a united transportation agency.

During Volpe's tenure the Department assumed a higher profile in resolving national transportation problems. These included airline hijackings, the sick-out of the fledgling Professional Air Traffic Controllers Organization, the decision to end federal support for production of the supersonic transport and to handle applications for Concorde landing slots, the financial insolvency of the Penn Central Railroad and the creation of Amtrak, and the Coast Guard's handling of the case of the defection of the Lithuanian seaman Simas Kudirka.

On December 6, 1972, Nixon named Dr. Claude S. Brinegar to succeed Volpe. Brinegar, a senior vice president of the Los Angeles-based Union Oil Company, had a Ph. D. in economic research and was a self-styled "non-political" professional manager. Reserved in management style and pragmatic in political philosophy, Brinegar successfully steered the department through Watergate and the energy crisis of 1973-1974. Moreover, he charted the Administration's response to the "Northeast Rail Crisis," the Regional Rail Reorganization Act of 1973, and at the urging of Congress, drafted a written National Transportation Policy in March 1974.

When Gerald R. Ford, Nixon's successor, decided to run for president in his own right, Brinegar indicated that he had no wish to join the campaign. He returned to California, and Ford named William T. Coleman, Jr., to succeed him. Coleman had served on several airline and transit boards, including the Southeastern Pennsylvania Transportation Authority, Philadelphia's transit system. Coleman was a distinguished lawyer who, with Thurgood Marshall, had played a major role in landmark civil rights cases, including Brown v. the Board of Education of Topeka, which ended de jure school segregation in 1954. Later, Coleman met and impressed Ford, when the then-House Minority Leader served on the Warren Commission investigating the assassination of John F. Kennedy; Coleman was senior consultant and assistant counsel to the commission. During Coleman's tenure, on April 1, 1975, Congress granted the National Transportation Safety Board, which had been established within the Department, its independence from the department. On the other hand, Coleman delineated a Statement on National Transportation Policy in September 1975 and National Transportation Trends and Choices in January 1977, which, while set aside by his immediate successor, "used the knowledge of the past to look into the future" and "to creat[e] a planning and decisionmaking framework to guide that future."

Ford lost the election of 1976 to Jimmy Carter, the former governor of Georgia. For secretary of transportation, Carter chose Brock Adams, a six-term member of the House of Representatives from Washington. Adams, a leading authority on transportation matters in the House, had been Brinegar's nemesis and the primary author of the legislation that reorganized the bankrupt northeastern rail lines into the Government-backed Conrail system.

Adams's establishment of the Research and Special Programs Directorate on September 23, 1977, subsequently the Research and Special Programs Administration (RSPA), was a significant institutional development. When Adams created RSPA, he combined the Transportation Systems Center, the hazardous materials transportation and pipeline safety programs, and diverse program activities from the Office of the Secretary that did not readily fit in any of the existing operating administrations. The establishment of the RSPA set a precedent in that it was a creation of the Secretary, not Congress. (Passage of the Pipeline Safety Act of 1992 gave RSPA equal statutory standing with the other operating administrations.) RSPA simultaneously moved crosscutting research and development pursuits from the Office of the Secretary to an autonomous operating administration.

During Adams's administration, the Inspectors General Act of 1978 established for the department, and other executive agencies as well, an inspector general, appointed by the president and confirmed by the Senate. The mission of the inspector general was to help the secretary cope with waste, fraud, and abuse. Although housed in the department and given the rank of assistant secretary, the inspector general was generally autonomous.

Before leaving office, Adams recommended that the Federal Highway Administration and the Urban Mass Transportation Administration be reorganized into a Surface Transportation Administration, an idea to which James Burnley and Federico Peña would later return. Adams was succeeded by Neil E. Goldschmidt, mayor of Portland, Oregon, since 1972, and later president of the United States Conference of Mayors. Meanwhile, legislative triumphs in transportation deregulation included the Railroad Regulatory Act (better known as the Staggers Rail Act), the Truck Regulatory Reform Act, the International Airlines Reform Act, and the Household Goods Regulatory Reform Act.

Goldschmidt expressed an interest in government industrial policy, an early example of which was the Chrysler Corporation Assistance Program, worked out largely by the Treasury Department. When Congress drafted the Chrysler Loan Guarantee Act of 1979, he began a review of the automobile industry's problems. Goldschmidt also established the Office of Small and Disadvantaged Business Utilization in the Office of the Secretary. It was responsible for carrying out policies and procedures consistent with federal statutes to provide policy guidance for minority, women-owned, and disadvantaged businesses taking part in the department's procurement and federal financial assistance activities.

Ronald Reagan's first secretary of transportation, Andrew L. ("Drew") Lewis, Jr., a management consultant and political leader from Pennsylvania, successfully negotiated the transfer of the Maritime Administration from the Commerce Department to DOT and provided the department with the maritime connection it needed to formulate an effective national transportation policy. The department assumed greater visibility during the air traffic controllers' strike in August 1981, during which Lewis spoke for the administration. After personally negotiating with the Professional Air Traffic Controllers Organization in the days leading up to the strike, Lewis forcefully explained the government's response to the strike-firings and no amnesty for strikers. Lewis was also responsible for the enactment of the Surface Transportation Assistance Act of 1982.

Lewis's successor, Elizabeth Hanford Dole, had been Reagan's assistant for public liaison. A consumer adviser in two administrations and a member of the Federal Trade Commission during the Nixon and Ford administrations, Dole brought to her new position experience in consumer and trade matters. At DOT, she focused on many safety-related issues, including drunk driving and the so-called "Dole brake light." Responding to a Supreme Court ruling, Dole authorized deadlines for the installation of air bags and other passive restraints in motor vehicles, which resulted in major increases in seat belt usage by the public, and incentives to manufacturers to equip new cars with air bags.

While Dole was secretary, the Commercial Space Launch Act of 1984 gave the department a multifaceted new mission to promote and to regulate commercial space launch vehicles. Because no operating administration had a comparable mission and because of its modest funding, Dole located the Office of Commercial Space Transportation in the Office of the Secretary.

The Airline Deregulation Act of 1978 and the Civil Aeronautics Board Sunset Act of 1984 had abolished the board and transferred to the department many of its functions relating to the economic regulation of the airline industry. Specifically, these included the aviation economic fitness program, functions related to consumer protection, antitrust oversight, airline data collection, and the review of international route negotiations and route awards to carriers. On January 1, 1985, the Office of the Secretary took over most of these functions, under the jurisdiction of the Office of the Assistant Secretary for Policy and International Affairs.

Continuing a trend begun when the department transferred the Alaska Railroad to the state of Alaska, the Department divested itself of entities that it thought should be in the private sector. Dole moved to end Federal Railroad Administration ownership of Conrail, finally realized in April 1987. She also encouraged the establishment of the Metropolitan Washington Airports Authority in June 1987, transferring administration of Washington National Airport and Dulles International Airport from the Federal Aviation Administration to that authority.

To succeed Dole, who had departed to help her husband's campaign for the Presidency, Reagan chose James H. Burnley IV, her deputy and former general counsel. While deputy secretary, Burnley had helped to negotiate the sale of Conrail, directed the privatization of Amtrak, enabled the transfer of the Washington airports to the regional authority, and helped to assemble an air traffic control work force in the wake of the 1981 strike. He also helped to produce the department's policies on aviation safety and security.

Disappointed with the Federal Aviation Administration's apparent foot-dragging on safety regulations, and seeking to increase the secretary's management oversight capacity within the department, Burnley proposed to curtail the autonomy of the operating administrations. A working paper recommended integration of the functions of the Maritime Administration, the Federal Aviation Administration, and the surface transportation administrations under three under secretaries, for water, air, and surface transportation, respectively. Burnley offered his reorganization proposal at the conclusion of Ronald Reagan's second term in the hope that it would provide Congress, his successor, and the public with an alternative to proposals according to which one agency or another would leave the department.

His successor, Samuel K. Skinner, a George H. W. Bush appointee, chose instead to emphasize the establishment of a National Transportation Policy. Skinner also welcomed expansion of the department's role in crisis management response. His handling of a succession of disasters, both natural and manufactured, earned Skinner the Washington moniker "the Master of Disaster." For Skinner, it began with additional evidence that a terrorist bomb had destroyed Pan American Airways flight 103. (The explosion over Lockerbie, Scotland, on December 21, 1988, had killed 270, including eleven on the ground. ) In rapid sequence followed the machinists' strike at Eastern Airlines (March 1989) and the company's subsequent bankruptcy, the Exxon Valdez oil spill (March 1989), the Loma Prieta earthquake (October 1989), and Hurricane Hugo (September 1990), all high-profile incidents that took place during Skinner's first twenty-one months in office.

For Skinner, establishment of a national transportation policy became the department's highest priority. In Moving America, national transportation policymakers outlined six objectives: to maintain and expand America's national transportation system; to nurture a sturdy financial footing for transportation; to keep the nation's transportation industry vigorous and competitive; to guarantee that the transportation system enhances public safety and the national security; to maintain the environment and the quality of life; and to ready American transportation technology and expertise for the next century. By March 1990, conditions had persuaded Skinner that to realize these goals, diverse departmental offices would have to work together. As a result, the secretary launched the National Transportation Policy-Phase 2 under the leadership of Thomas D. Larson, administrator of the Federal Highway Administration. NTP-Phase 2 activities combined to help the department inventory its strengths and weaknesses and identify room for improvement.

On December 18, 1991, Bush signed into law the Intermodal Surface Transportation Efficiency Act (ISTEA), derived in part from the NTP, which provided a six-year reauthorization to restructure the department's highway, highway safety, and transit programs. One effect of this legislation was that the Urban Mass Transportation Administration became the Federal Transit Administration. The ISTEA legislation also required the department to establish two new organizational entities: the Bureau of Transportation Statistics, which was to provide timely transportation-related information through the compilation, analysis, and publishing of comprehensive transportation statistics, and the Office of Intermodalism, in the Office of the Assistant Deputy Secretary, which was charged with coordinating and initiating federal policy on intermodal transportation.

Skinner, meanwhile, had become White House chief of staff. A month and a half later, Bush named Andrew H. Card, Jr., his deputy White House chief of staff, to be secretary of transportation. Disaster response to Hurricane Andrew, which hit southern Florida in August 1992, highlighted Card's eleven-month term at the helm of the department.

Bush lost the election of 1992 to Arkansas governor Bill Clinton. In a move to enhance diversity in his cabinet, Clinton selected Federico Peña, an Hispanic American and the former mayor of Denver, Colorado, initially to head the "cluster group" that dealt with transportation issues during the transition, and ultimately to manage the Department of Transportation.

In March 1993, Clinton announced an initiative that the Democratic Leadership Council embraced, a plan for a six-month National Performance Review (NPR) of the federal government. Following a highly successful program analysis by Texas governor Ann Richards, Clinton asked Vice President Al Gore to head his administration's effort to improve the quality of the government and to reduce the cost of delivering services to the American taxpayer. The NPR challenged federal agencies to identify what worked and what did not, to propose new ways of doing the job that would eliminate red tape and improve both operations and customer service, and to think about doing their work in smarter, more cost-effective ways.

While the NPR laid the groundwork for "reinventing government," the department had been responding to several congressional initiatives, including the Chief Financial Officers Act of 1990, the Federal Managers' Financial Integrity Act, and the Government Performance and Results Act of 1993. The outcome was the DOT Strategic Plan, which Peña announced in January 1994.

The plan delineated the department's mission and enumerated seven broad strategic goals to carry out: "tying America together" through an effective intermodal transportation system; investing strategically in transportation infrastructure; creating a new alliance between the nation's transportation and technology industries in order to make them more efficient and economically competitive; promoting safe and secure transportation; actively enhancing the environment; "putting people first' in the transportation system; and transforming the Department. Meanwhile, the department continued to be at the center of the federal government's crisis management response team, as exemplified by its response to flooding in the Mississippi River Basin in the summer of 1993 and the Northridge earthquake of January 1994.

The NPR had promised a government that not only would do its job better, but would cost the taxpayers less as well. Consequently, the Clinton administration was able, by December 19, 1994, to propose a "middle-class" tax cut, one that would be funded in part by restructuring several federal departments and agencies, including the Department of Transportation. That same day, Peña outlined a plan to restructure the department by the end of the decade. After a month and a half of workshops and discussions with Congress, the public, and department employees throughout the country, Peña announced a restructuring plan for the department. Pending congressional approval, three operating administrations, a Federal Aviation Administration, a new Intermodal Transportation Administration, and the Coast Guard, would replace the current ten. Where Congressional approval was not necessary, Peña moved ahead, transferring the Office of Commercial Space Transportation from the Office of the Secretary to the Federal Aviation Administration, and launching the Transportation Administrative Services Center (TASC) to provide fee-based administrative services previously financed by the Working Capital Fund, both within DOT and to other government agencies.

Following his reelection in 1996, Clinton selected Federal Highway Administrator Rodney E. Slater to succeed Peña at DOT. The second former federal highway administrator (after Volpe) and the second African-American (after Coleman) to become Secretary, Slater was instrumental in getting ISTEA reauthorized, with the passage of the Transportation Equity Act for the 21st Century, the largest public works legislation in history. During his first year and a half at DOT, airline and railroad mergers again became fashionable. Department negotiators helped to avert a strike against Amtrak--and Congress mandated that Corporation''s overhaul; the National Highway Traffic Safety Administration issued regulations allowing consumers to turn off their airbag switches where necessary; and the United States finalized a long-sought, liberalized aviation agreement with Japan.

Also, in keeping with his conviction that transportation was about "more than concrete, asphalt, and steel," Slater announced the Garrett A. Morgan Technology and Transportation Futures program to encourage students to choose careers in transportation; a "Safe Skies for Africa" Initiative to promote sustainable improvements in aviation safety and airport security in Africa; and on October 8, 1998, proposed the idea of creating a unified Department, ONE DOT, able to act as an integrated, purposeful leader increasing transportation efficiency and effectiveness.

In the wake of the Presidential Election of 2000, the eventual winner, Texas Governor George W. Bush (R), reached out to the Democratic Party for his nominee to head DOT. After the closest race in 112 years, the issue hung--for five weeks--on the contested vote in Florida, with electoral votes that could have swung the election to either Bush or his Democratic rival, Vice President Al Gore. Following a U.S. Supreme Court ruling that essentially certified the Republican standard bearer's victory, Bush chose former San Jose Mayor and Congressman Norman Y. Mineta (D-CA), a Japanese-American who, along with his family, had been held in a relocation camp in Wyoming during World War II. Mineta, age sixty-nine, was, when Bush nominated him to become the nation's fourteenth Secretary of Transportation, Bill Clinton's Secretary of Commerce. After an extraordinarily close election, Bush turned to a Democrat who was not changing parties, just Cabinet posts, to heal the partisan breach. As such, Mineta would become the first Asian-Pacific American to serve as Secretary of Transportation-and the first DOT Secretary to have served in a previous Cabinet position.

Less than eight months into the new Bush Administration, on September 11, 2001, radical Islamic extremists with the group Al Qaeda, hoping to sow terror and confusion among Americans, commandeered four American domestic airliners, and transformed them into missiles that were used to destroy the World Trade Center in New York City and to hobble the Pentagon in Arlington, Virginia, killing thousands. Under Mineta's command, DOT managers and FAA air traffic controllers performed a herculean task by bringing the rest of the fleet down safely. Responding to this new form of terrorism, Congress passed and, on November 19, 2001, Bush signed into law the Aviation and Transportation Security Act, which, among other things, called for the establishment of a completely new Transportation Security Administration in the Department of Transportation, to increase security at airports and other transportation venues. On February 16, 2002, the Transportation Security Administration opened for business, and was due to become fully operational by year's end. On June 6, 2002, Bush asked for a broad-based reorganization of the Federal government, which, by establishing a Cabinet-level Department of Homeland Security, proposed to transfer the Coast Guard and the Transportation Security Administration out of the Department of Transportation.

Congress passed the Homeland Security Act of 2002, DHS’s enabling legislation, which Bush signed into law on November 25, 2002. On January 25, 2003, former Pennsylvania governor Tom Ridge was sworn in as that Department’s first Secretary. On March 1, the Department of Homeland Security became fully operational. Four days earlier, on February 25, 2003, in an historic “Change of Watch” ceremony replete with color guard, speeches, silent drill team, and John Philip Sousa marches, Mineta ceremoniously transferred civilian leadership of the Coast Guard to the new department. The following day, Mineta formally handed over the Transportation Security Administration to Homeland Defense: “On Saturday, March 1, . . . [w]e hand over an agency that is fully intact and which does credit to both of our departments.. “Creating TSA was by far the toughest, most challenging, and most satisfying endeavor I’ve ever undertaken. Starting from a blank sheet of paper on Nov. 19, 2001, we created an agency of more than 60,000 employees that is truly fulfilling its goal of protecting Americans, as they travel across our country, and beyond. . . . Not only have we improved security for the traveling public, but [we] have also cut waiting times at checkpoints, fulfilling our promise of delivering world-class security and world-class customer service.”

In non-9/11-related developments, on January 29, 2004, ringing the opening bell at the New York Stock Exchange, Mineta launched DOT’s “Moving the Nation’s Economy” initiative, tracking the new Transportation Series Index.  TSI tended to be more sensitive to economic shocks, and hence is more suitable in detecting cyclical turning points than the current indicators used by National Bureau of Economic Research. The Research and Special Programs Administration’s organizational architecture changed yet again when the Norman Y. Mineta Research and Special Programs Improvement Act of 2004, which President Bush signed into law on November 30, created two new Operating Administrations, a more sharply focused Research and Innovative Technology Administration (RITA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA). Probably the Department’s most important legislative accomplishment occurred after Bush had asked Mineta to stay on in his second Administration. Congress passed and, on August 19, 2005, Bush signed into law, the surface transportation bill reauthorization, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU).

On June 23, 2006, having already served as Transportation Secretary for sixty-five months, longer than anyone before him, Mineta announced his retirement, effective July 7. Two months later, President Bush named Mary E. Peters of Arizona, former Federal Highway Administrator (2001-2005), as his choice to be Secretary of Transportation. Following Senate confirmation, Peters took the oath of office October 17.