Which government agencies establishes the nations overall transportation policies

The correct answer is the United States Department of Transportation. According to the Department of Transportation, their mission is to "The mission of the Department is to: Serve the United States by ensuring a fast, safe, efficient, accessible and convenient transportation system that meets our vital national interests and enhances the quality of life of the American people, today and into the future"

This means that the DOT is responsible for ensuring that transportation systems are up to date and meet the emerging needs of Americans.