Chao says talk of tying infra to tax reform has ‘receded’

The US transportation secretary faced questions over cuts to the TIGER and Capital Investment Grant programmes in a hearing to discuss the administration’s budget proposal.

Discussion of using the proceeds of tax reform to fund an infrastructure package has “receded”, US Transportation Secretary Elaine Chao told Congress on Thursday.

In the hearing, held by the House of Representatives’ appropriations committee, members of Congress questioned Chao on the administration’s budget for the transportation department as well as a fact sheet on infrastructure spending released last month. While Chao pointed to the need to bring in private sector capital, Democrats questioned cuts to the TIGER and Capital Investment Grant programmes.

“This is something that has potential, I believe, for bipartisan support, but we don’t have enough to work with,” North Carolina Democrat David Price told Chao. Price said the challenges facing US infrastructure will get worse if action is not taken. “I think this budget proposal falls short of that mark.”

New York Democrat Nita Lowey pressed Chao for details, saying, “I am concerned that the president’s plan lacks actual funding, and instead would put a burden on state and local taxpayers to pay for those programmes.”

Chao pointed to President Donald Trump’s plan to leverage $200 billion of direct federal spending to spur $1 trillion in total investment in infrastructure.

“Some of the monies will come from the sale of public assets, and then the remainder will be a combination of partnerships and cooperation between the public and the private sector,” Chao said. She later added, “A trillion dollars over 10 years cannot be funded, as our friends on the other side of the aisle would like, by direct federal funding.”

Chao said a more detailed infrastructure proposal will be released this fall.

The idea of using revenue from tax reform to boost infrastructure spending, Chao acknowledged, was initially “part of our discourse internally”. She noted that the proposal may resurface in the future.