Wednesday, January 11, 2017

What We Learned at Chao's Confirmation Hearing

Secretary-designate Elaine Chao testifies before the Senate Commerce Committee.
While we don't know much about Elaine Chao's stances on many issues related to transportation policy, Wednesday's confirmation hearing gave us an opportunity to learn a little more.

Before a committee known for its bipartisan spirit, Chao struck a familiar tone: she concluded the three-hour hearing by saying a large transportation bill "gives us an opportunity, on a bipartisan basis, to work together to build a better America." Indeed, infrastructure investment already seems to be one of the greatest chances for bipartisan movement in the next Congress, with Senate Minority Leader Chuck Schumer (D-N.Y.) saying that Republican President-Elect Donald Trump's $1 trillion infrastructure plan "sounds good to me."

What else did we learn about what transportation policy might look like under a Trump-Chao administration? Here are the major developments:

Chao prioritizes safety
It could scarcely be clearer: in all aspects of the Department of Transportation's work, safety will be a top priority. When Sen. Amy Klobuchar (D-Minn.) asked about rail safety in particular, Chao stressed that "safety is number one, there's no question about that... Safety will continue to be the number one priority for the Department of Transportation."

Safety for whom? Sen. Brian Schatz (D-Hawaii) pointed out that 10% of roadway deaths in 2015 were pedestrians, with seniors more likely than any other age group to be struck and killed by a car. Particularly problematic in urban areas with many walking commuters, it will be important to find out whether Chao might support any policies to help address pedestrian safety in addition to driving safety, rail safety, port safety, etc.

Regulation will be front and center
In her questionnaire to the committee, Chao mentioned the importance of streamlining permitting processes for new infrastructure projects. In most cases, that means reducing regulation to make the process faster. 

Chao spelled out a moderate approach to regulation, saying "The great challenge for all regulators is to balance the ultimate goal of safety, but also to make sure that the regulations enacted are based on sound science, on true data, and that the underlying analysis is solid – that is the best way to protect consumers and passengers."

She also said the government could do a better job helping regulated bodies comply with regulations: as Secretary of Labor, she emphasized compliance over enforcement, and it sounds like that would be the case at Transportation as well. "Regulations can be confusing," she said, "Government has the responsibility to reach out to the regulated community to help them understand what’s required of them."

The administration will pursue public-private partnerships...
We already know that Trump's infrastructure plan relies heavily on incentivizing private investment in our infrastructure. It's no surprise, then, that Chao emphasized public-private partnerships (PPP) as a way to move big projects forward.

Chao called it "essential" to recognize when private funding tools would be more effective than government funding, but acknowledged that "there are times when PPP have not been welcomed; we need to do away with some of those impediments."

How to get private interests more involved? Chao said "the private sector is encouraged to get involved when there's a bold vision; this president [Trump] has a bold vision." Pressed by Sen. Todd Young (R-Ind.) for more  specifics, Chao added that "for them [PPP] to be effective, there are revenue streams that need to be assured."

On that topic, Sen. Shelley Moore Capito (R-W.V) brought up the fact that private companies aren't interested in investing on projects for which they won't get a return on that investment - for example, in more sparsely populated areas. She asked, "How do we incent the private dollars to go to the less economically developed parts of the country?" Chao only reiterated that it will be important to figure out the pay-fors for any infrastructure plan.

...but more federal funding might still be coming
When Sen. Cory Booker (D-N.J) asked Chao whether the Trump Administration would support increasing federal direct spending on infrastructure, Chao said, “I believe the answer is yes.” Despite the bit of wavering there - Chao obviously did not want to go on the record putting words in the president-elect's mouth - I got the impression that Chao recognizes a large infrastructure plan would, by necessity, require some direct federal investment even if much of it relies on private investment.

One potential beneficiary of beefed-up federal support: the TIGER grant program, which provides funding for transportation projects (road, rail, transit, and ports) that achieve national objectives. Chao said that "from all my meetings... I've been very impressed with how many members like [TIGER grants]. She also called the current annual TIGER grant amount "a very modest sum in this budget."

Autonomous vehicles will be a major focus
Almost every member of the committee brought up autonomous vehicles and the broader topic of DOT's need to catch up on modernization issues. Chao cited the federal government's “failure to keep pace with emerging technologies" such as autonomous vehicles, but also said the federal government is not alone responsible: "The federal government can't do this on its own," she said, and it "must take stakeholders' perspectives into account." 

Sen. Maggie Hassan (D-N.H.) brought up the interesting point that autonomous vehicles can help people who can't drive (as opposed to just don't want to drive), such as the elderly and the disabled, get around - a sentiment Chao later echoed: "For seniors who may not want to drive, autonomous vehicles are a way to give them back their freedom."

Given the committee's and Chao's interest in autonomous vehicles and modernization - combined with Trump's desire to reduce regulation and Chao's support for private enterprise - it looks like the next four years could be very good for the budding autonomous vehicle industry. 

On ATC reform: let's talk later
Air traffic control reform will continue to be a hot-button issue, but Chao wasn't wading into it before she had to: "I'd like to get confirmed first," she said to audience laughter after being asked about the issue. She did add that "we need to have a national discussion" on the issue, before FAA reauthorization comes up again on September 30.

Also regarding the FAA, the Next Generation Air Transportation System (NextGen) came up several times, including in the broader context of modernization. Chao said "We need to have greater emphasis on improving the rate of modernization." She told Sen. Ted Cruz (R-Texas) that examining NextGen is a "top priority of mine... how do we improve it, then also how do we maintain our aviation system to be the best, safest, most efficient in the world."

Chao gets intermodality
Intermodality - how our different modes of  transportation intersect to help people get around as quickly and efficienty as possible - is an interest of mine, and I was happy to hear her say we should "focus more on how different modes can be a single, seamless provider of services to provide a more efficient transportation system for the benefit of people and shippers." She said her department would have a "major focus on intermodal compatibility - seeing more cooperation between different modes."

Chao dodges on emissions, climate
Sen. Ed Markey (D-Mass.) brought up vehicle emissions - the transportation sector is responsible for more emissions than any other part of our economy - and fuel efficiency standards, asking Chao if she would commit to maintaining or bolstering those standards to help mitigate the effects of climate change. Like on many issues, Chao would only say she would examine the issue. We still don't know where Chao stands on climate change, so it's hard to know where she might come down on fuel efficiency standards or projects that would help make infrastructure more resilient to climate change and severe weather. 

She did, however, say at another point that rail travel "can obviously help with the environment, it is a wonderful alternative" - so she isn't unaware of, or necessarily uninterested in, the intersection of transportation policy and environmental policy. But we'll have to see how much weight she puts on environmental issues when it comes to approving big new infrastructure projects.

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