Transportation nominee: ‘Innovative’ investing will help boost infrasturcture
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, the president-elect’s pick for transportation secretary, 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. Her husband is Senate Majority Leader Mitch McConnell, R-Ky.
When McConnell introduced Chao at the hearing, he stole a line from former Senate Majority Leader Robert Dole: “I regret I have but one wife to give for my country’s infrastructure.” 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 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 aid 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.
Sen. Cory Booker, DN.J., asked Chao if she and the incoming Trump administration would support infrastructure legislation that includes direct federal spending on transportation in addition to efforts that generate private financing.
“I believe the answer is yes,” she said.
That could put the new administration at odds with conservatives who insist that federal spending be restrained.