“Our country’s transportation infrastructure is the underpinning of our world-class economy,” Chao said at her Senate confirmation hearing. “These gains are jeopardized by infrastructure in need of repair, the specter of rising highway fatalities, growing congestion, and by a failure to keep pace with emerging technologies.”
Trump has proposed $1 trillion in construction over the next decade on all forms of transportation, including roads, airports and ports. But key lawmakers have questioned the size of his proposal and the financing, for which he suggested tax credits to encourage private spending.
“Secretary Chao’s extensive record of strong leadership and her expertise are invaluable assets in our mission to rebuild our infrastructure in a fiscally responsible manner,” Trump said in a statement.
Congress approved a five-year highway bill in late 2015, but lawmakers were reluctant to increase the gas tax for the $305 billion legislation. The next extension will rekindle the debate over how to raise money for the highway trust fund and where to distribute it for highways, bridges and transit.
Chao said a “major challenge is to unleash the potential for private investment.”
"We look forward to working with you on all options," she said. "We know the government doesn't have the resources to do it all."
Chao noted that the highway trust fund spends $10 billion more each year than it collects, with 90% coming from the gas tax. Each proposal for bolstering the funding has champions and detractors, which she said must be debated.
“The highway trust fund is in bad shape," Chao said. “This is a huge issue."
Born in Taiwan, Chao came to the U.S. with her parents when she was 8. She graduated from Mount Holyoke College and Harvard Business School. She was director of the Peace Corps and CEO of United Way of America.
Chao, 63, served as labor secretary during the eight years of President George W. Bush’s administration and as assistant transportation secretary for President George H.W. Bush. She is married to Senate Majority Leader Mitch McConnell, R-Ky.
Sen. John Thune, R-S.D., who heads the transportation panel, said he couldn't imagine a more ideal candidate than Chao.
“Secretary Chao, if confirmed, you will have a momentous opportunity to transform America’s transportation network by promoting safety and innovation," Thune said.
Her experience will be an advantage in light of the major legislation facing her immediately.
The Federal Aviation Administration’s authorizing legislation expires Sept. 30. Among the issues is whether to shift air-traffic controllers to a private corporation, for more predictable funding from the industry than from Congress.
Sen. Bill Nelson, D-Fla., who is opposed to privatization, said there is huge disagreement between the House and Senate on the subject. The Defense Department opposed the change, and the proposal would be costly and disruptive, he said. Nelson asked for Chao’s opinion.
“I’d like to get confirmed first,” she said to laughter.
More seriously, she said there must be a national consensus on the subject, which will take time for discussion.
“Obviously this is an issue of great importance,” Chao said. “The administration has not made a decision on this point.”
Another aviation dispute is that airports have urged an increase in the federal cap on local ticket fees to improve aging terminals, but airlines have opposed the move. Sen. Maria Cantwell, D-Wash., asked whether Chao supported improving airport infrastructure.
“We need more resources to build, repair, refurbish our infrastructure," Chao said, without committing to a specific funding source.
The department recently granted approval for Norwegian Air International to serve the U.S. But rival airlines and their unions contend the department should reverse that decision because the airline headquartered in Ireland is skirting labor laws, an allegation the airline strongly denies.
Likewise, U.S. airlines have urged the department for years to block additional flights from three Middle East rivals — Emirates, Etihad and Qatar — under the argument that billions of dollars in government subsidies make them unfair competitors. But the Gulf carriers deny receiving subsidies and contend U.S. airlines are trying to limit competition.
Sen. Amy Klobuchar, D-Minn., asked whether Chao would work with her to protect American workers from unfair competition from foreign airlines.
“I look forward to working with you on this important issue, if confirmed,” Chao said.
Lawmakers and department regulators are also creating rules for fast-evolving technology. As drones increasingly share the skies with passenger planes, the FAA is developing rules for allowing them to fly higher above people and farther than the pilot can see. The department is shaping policy for self-driving cars, with a goal of reducing the 30,000 vehicle deaths each year.
“Safety will continue to be the primary objective,” Chao said. “Regulatory decisions should be rooted in analysis derived from sound science and data.”
|© Carolyn Kaster, AP Former Labor Secretary Elaine Chao arrives Nov. 21, 2016, at Trump Tower in New York, to meet with President-elect Donald Trump, who chose her to lead his Transportation Department.|
Transportation Secretary Nominee Elaine Chao: Trump Wants "Futuristic And Comprehensive" Infrastructure Plan
Secretary of Transportation Nominee Elaine Chao told members of Congress that she looks forward to working with them on various national and local transportation issues once she's confirmed. She discusses the big picture of Donald Trump's infrastructure reform plan. Chao is married to Sen. Mitch McConnell.
Elaine Chao says private investors can help boost transportation
WASHINGTON -- The incoming Trump administration is looking to “unleash the potential” of private investors to boost the national transportation networks that underpin the U.S. economy, Transportation Secretary-designate Elaine Chao told lawmakers Wednesday.
Economic gains are being “jeopardized” by aging infrastructure, rising highway fatalities, growing congestion and a failure to keep pace with emerging technologies, Chao testified before the Senate Commerce, Science and Transportation Committee.
Chao, 63, is expected to be easily confirmed by the Senate. She was labor secretary during George W. Bush’s administration and deputy transportation secretary under President George H.W. Bush. Her husband is Senate Majority Leader Mitch McConnell, R-Kentucky.
When McConnell introduced Chao at the hearing, he stole a line from former Senate Majority Leader Robert Dole: “I regret I have only one wife to give for my country.” Dole’s wife, Elizabeth, is a former transportation and labor secretary.
Chao joked, “I will be working to lock in the majority leader’s support tonight over dinner.”
But she hasn’t been immune from criticism. Unions say that as labor secretary, she mostly sided with industry when enforcing labor and safety rules.
Chao advocated using “innovative financing tools” that can “take full advantage of the estimated trillions in capital that equity firms, pension funds and endowments can invest.” She said private investment should be encouraged with “a bold, new vision.”
She didn’t detail those incentives, but a paper written by two economic advisers to President-elect Donald Trump recommends providing $137 billion in tax credits to infrastructure investors. His advisers predict that will generate about $1 trillion in investment over 10 years.
But transportation experts note that investors are interested only in transportation projects that produce revenue, such as toll roads, and there are relatively few large projects like that. They say states need financial help from the federal government to help with a growing backlog of maintenance and repair projects for aging highways, bridges and transit systems. Providing tax incentives also runs the risk of providing a windfall to investors for projects that would have been built anyway.
Trump repeatedly promised during the campaign to spend $1 trillion on roads, bridges, railways, airports and other types of infrastructure. It’s one of the main ways he said he would create jobs. But he has said little about this since the election.
Republican congressional leaders have said they’ll wait to see what Trump proposes before tackling a public works bill. Trump has said he expects to be occupied early in his administration with cutting taxes and repealing President Barack Obama’s health care overhaul. Infrastructure isn’t expected to be dealt with until late spring.
As transportation secretary, Chao would be responsible for regulating auto, truck, train, transit, pipeline and aviation safety. The department frequently faces pressure from industry to relax safety rules and block new ones.
Chao, who has been associated with conservative think tanks, is likely to lend a sympathetic ear to industry pleas for less regulation.