Washington — Transportation Secretary Elaine Chao is taking the wheel as President Donald Trump’s administration prepares to roll out a massive infrastructure package that officials say could provide $1 trillion of spending on U.S. roads and bridges. But lawmakers Wednesday on Capitol Hill were skeptical about a plan outlined by Chao that would rely largely on private investment for funding.
Chao has been largely quiet early in her term, but Wednesday she told the U.S. Senate Environment and Public Works Committee that the Trump administration is gearing up for a push to put the debate over U.S. transportation spending front and center in Congress.
“The president has made infrastructure one of his top priorities,” Chao said during opening remarks at the committee hearing. “The administration will share its vision of what the infrastructure plan will look like soon, which will kick off our collaboration with the Congress.”
Chao told the panel the Trump administration is likely to ask for $200 billion in “direct federal funds” that she says will be used to “leverage” up to $800 billion in additional investment from private companies who would enter into “public-private” partnerships with local and state governments.
The Trump administration’s transportation funding proposal relies on private companies to enter into partnerships with local and state governments to provide financing that is necessary to complete expensive construction projects. Cash-strapped local jurisdictions have been turning to companies who agree to provide money for expensive infrastructure improvements in exchange for revenue that would be generated by completed projects such as road tolls or rail fares.
“We understand that not every infrastructure project, however, is a candidate for private investment,” Chao said. “The administration recognizes the difference between rural and urban infrastructure needs. We anticipate that the president’s proposal will reflect this understanding.”
Lawmakers in both parties expressed skepticism that private companies would be willing to pick up the tab for $800 billion worth of infrastructure improvements.
U.S. Sen. John Barrasso, R-Wyo., chairman of the Senate Environment and Public Works Committee, said lawmakers will have to find a way to invest “real dollars” into the U.S. transportation system “in a fiscally responsible way.”
“Public-private partnerships can be effective in urban areas, but do not work for rural states like Wyoming, and other small and rural states represented on this committee,” Barrasso said.
Democrats on the panel said the Trump administration will likely have to put much more federal money on the table to properly address the nation’s infrastructure needs.
“We face this crisis in large part because we haven’t raised the gas and diesel taxes in some 24 years or not adjusted them for inflation,” Sen. Tom Carper, D-Del., said, referring to the federal gas tax that is used to pay for most federal-financed transportation projects.
“Revenues have stayed flat, while the construction costs to build roads, highways and bridges continue to increase,” continued Carper, the top ranking Democrat on the panel.
Congress has been struggling for years to come up with a way to boost federal transportation funding in the long term.
The traditional source is revenue collected by the federal gas tax, which is currently set at 18.4 cents per gallon. The federal government spends about $50 billion per year on roads, but the gas tax only brings in $34 billion annually. The gas tax has not been raised since 1993, and there is little appetite in Washington for taking a vote to do so now.
Congress has turned to other areas of the federal budget in recent years to close the infrastructure funding gap, most recently in the five-year, $305 billion FAST Act infrastructure bill that was signed by President Barack Obama in 2015. That measure was paid for by revenue collected from renewing the gas tax at current rates and a package of $70 billion in transfers from other areas of the federal budget that was used to close the infrastructure funding shortfall. The current transportation funding measure is expected to expire in 2020.
Carper, who has pushed in years past to increase the gas tax, said Congress will “need to find $115 billion in 2020 in order to continue providing the same level of funding plus inflation for the next five-year bill,” noting that there is an $836 billion backlog for highway and bridge projects, and a $90 billion backlog for transit.
“Plain and simple, the amount that we’re spending today is woefully short of what we ought to be spending if we want to have the roads, highways and bridges that our country and its people need,” he said.
The new transportation secretary has mostly kept a low profile in her first months in office, as the Trump administration expended its energy in other areas, including a contentious debate about Obamacare. She has spoken to several industry groups and appeared at a few Department of Transportation events, but reporters in Washington have complained that she is not as accessible to members of the press as her predecessors in the Obama administration.
“While she’s done plenty of hits on local TV and cable networks... Chao has yet to hold a pen-and-pad with the Washington reporters who regularly cover DOT or make herself available for questions after a D.C. event,” Politico, a Washington, D.C.-based political newspaper, groused in its Morning Transportation email on Tuesday.
Chao’s office did not respond to a request for comment from The Detroit News on her low profile for her first couple of months in office.
A spokeswoman for the transportation department, Allison Moore, said in email to reporters that Chao “is focused on two objectives: streamlining the cumbersome red tape that drives up the costs of building our tunnels and rails and pushing for new financing models to ease the burden on the federal government.
“In the long run, attaining those goals will prove more important and enduring than a quick infusion of spending,” the email said.