President Donald Trump’s nominee for secretary of transportation, Elaine Chao, said in her Senate confirmation hearing she supported greater private sector funding to help meet America’s infrastructure needs and that government should embrace innovative transportation technologies.
Chao, a former deputy transportation secretary from 1989 to 1991, answered questions from the Commerce, Science and Transportation committee ranging from how to finance the US’s growing infrastructure needs to whether to privatise air traffic controllers.
“Our country’s transportation infrastructure is the underpinning of our world class economy,” Chao, who also served as secretary of labor under President George W. Bush, said in her opening remarks. “It is a key factor in productivity growth […] it has provided us with unprecedented mobility, safety and security,” she said.
Trump made rebuilding US infrastructure one of his top campaign promises, proposing at one point to spend $1 trillion over 10 years. The private sector will likely be needed to come close to meeting this mark, and Chao acknowledged “we all know the government does not have the resources to do it all”.
Sarah Fitts, a partner at law firm Debevoise & Plimpton and co-chair of its energy and natural resources group, tells Infrastructure Investor the interesting part of Trump’s infrastructure spending is how it will be directed to urban and rural areas.
“For infrastructure, the real issue is going to be between urban and rural,” she says, noting that urban areas lobby for funds to maintain highly used assets and expanding rail infrastructure. In rural areas, the interest is in highway expansion and transportation maintenance.
For specific details about Trump’s infrastructure plan, Fitts says Chao “kept her cards close to her vest. And that’s probably the best she can do” at the moment, she adds.
The Department of Transportation needs to further embrace innovative financing options like PPPs that can draw in private sector support, Chao continued, and stated to the investment community: “We look forward to working with you on all new options.”
Again pointing to the role private investors can play in shaping US infrastructure, Chao said innovative technologies like self-driving cars have the potential to transform transportation. However, she warned that government must still approve safe and efficient regulations for such technologies while not dampening creativity.
This is an area where Fitts agrees with Chao. “The technology is coming really, really fast. There’s a couple of questions […] Do we really want [driverless cars] on the road? And what’s the impact on employment?”
Chao, wife of Senate majority leader Mitch McConnell, also faced questions about how she would allocate funds from the FAST Act, a surface transportation funding bill passed in 2015. She replied saying there should be comparable funding provided for rural and urban transportation projects.
Another issue mentioned numerous times is the privatisation of air traffic controllers. The idea of allowing private companies to manage airport traffic is one that is gaining interest among politicians as the Federal Aviation Administration faces a funding authorisation vote this September. Chao said she wants to learn more about the topic before forming an opinion.
Fitts notes there were some areas in transportation that were not mentioned that surprised her, such as energy efficiency standards and the national security risks associated with the US transport fleet’s reliance on foreign oil. She notes no senator asked about diversifying fuels.
Overall, senators in the committee reacted positively to her nomination and gave no hint she would not be confirmed. “She had clearly spent a lot of time with every single member” of the committee, Fitts says. “The whole thing was very, very smooth. It would be wrong to say it was scripted, but absolutely no surprises.”