Skift Take

The swift confirmation of Chao represents an immediate opportunity for the new administration to make serious contributions towards improving America's airports and highways. But as the past shows, significant change may be hard to accomplish given the divided political goals of Congress.

The U.S. is one step closer to redeveloping its flagging infrastructure, but the path to truly revamped airports and highways remains unclear.

To the surprise of no one in Washington, Elaine Chao was named the new Secretary of Transportation after a short nomination process.

Chao, the former secretary of labor for the entire presidency of George W. Bush, is a well-respected public servant who happens to be the wife of Republican Senate Majority Leader Mitch McConnell.

The travel industry at large has expressed support Chao, given her background running the Department of Labor.

“The U.S. travel community applauds the Senate for confirming Elaine Chao to serve as America’s next Secretary of Transportation,” said U.S. Travel president and CEO Roger Dow in a statement. “Secretary Chao brings with her a wealth of experience working with and within the U.S. government and on transportation issues, and will undoubtedly be an extremely effective leader of DOT. It is entirely fitting, first and foremost, to appoint a former Deputy Secretary to the highest post in the U.S. Department of Transportation. Furthermore, Secretary Chao’s tenures as Director of the Peace Corps and as Secretary of Labor cement a deep base of knowledge about what keeps a country connected and thriving.”

In her questioning during the nomination process, Chao expressed support for using public-private partnerships to rebuild the country’s infrastructure. Little solid evidence has been presented about the details of such a plan, besides a paper prepared by Republican advisors which suggests massive tax breaks and other incentives would be used to draw businesses to projects.

On Wednesday, the House Transportation Committee held a hearing on the subject of “Building a 21st Century Infrastructure for America,” which featured discussion by lawmakers and business executives on the most important priorities for the new administration.

“Over the next 30 years, our Nation’s transportation infrastructure will need to keep pace with anticipated increases in population and demand for freight transportation,” reads the committee memo. “Forecasts predict that America’s population will grow from 319 million in 2014 to approximately 400 million in 2051… Air travel demand is expected to increase from 750 million passengers annually to nearly one billion passengers annually by the end of the next decade. New forms of air transportation, including drones and commercial space transportation will also need to be integrated into the aviation system. In terms of highway usage, vehicle miles traveled are projected to increase by nearly 20 percent by 2035.”

While President Trump has promised repeatedly that he will urge Congress to pass a bill to spur infrastructure investment and create jobs, mentioned a $1 trillion target in investment, concrete details have yet to emerge.

Big Improvements

A look at the last few major investment plans to revitalize the country’s infrastructure, however, shows the difficulty of accomplishing truly impactful improvements. One of the first major policy decisions of President Obama’s first term was to use government investment to help increase employment in the throes of the Great Recession.

The American Recovery and Reinvestment Act (ARRA) spent $48.1 billion on transportation improvements overall, including $27.5 billion on highway and $8.4 billion for transit improvements. The vast majority of the money was handed out to states, which then figured out which projects to fund, with the stipulation that projects which could be completed in three years and projects in distressed areas are prioritized.

Despite the size of the federal investment in infrastructure improvement, the Government Accountability Office (GAO) found that the act only did a passable job of creating jobs since the projects didn’t create sustained employment.

“The effect of the crowding out of some private investment under ARRA will be offset somewhat by other factors,” reads a GAO report on the effect of ARRA. “Some of ARRA’s provisions, including its funding for roads and highways, may add to the economy’s potential output in much the same way that private capital investment does.”

The Department of Transportation itself said bridges and other road projects benefitted the most from the investment.

“More than 13,000 road and bridge projects across the country have resulted in over 42,000 miles of improved road and almost 2,700 rebuilt or strengthened bridges,” states the Department of Transportation’s final report on ARRA spending. “Recovery Act-related transit investments constructed or rehabilitated 850 new facilities and provided nearly 12,000 new buses and nearly 700 new rail cars. Additionally, about 800 airport improvement projects addressing needed repairs to runways, airport facilities, and air traffic towers were completed.”

Highways received the most improvement, according to the report, and improvements were mostly from repairs. The Federal Aviation Administration only received $1.3 billion, which was spent on 800 projects across the country, most notably air traffic control towers and runways.

So the widespread construction of new airport facilities or highways was not the result of Obama’s massive spending project.

In December 2015, Congress signed the FAST Act which dedicated $305 billion through 2020 towards improving U.S. roads. The project is still ongoing, but improvements seem to be incremental.

The administration of President George W. Bush signed a bill in 2005 dedicating $286.4 billion toward highway investment. The legislation is notorious for have been wasteful and its spending being directed towards useless projects, like the infamous Bridge to Nowhere in Alaska.

Setting aside spending bills, perhaps the biggest challenge to improving U.S. infrastructure stems from a deep drop in overall spending on infrastructure projects. In 2000, the federal government was spending about $320 billion on infrastructure projects, according to ThinkProgress. But by 2013, that number had decreased to about $200 billion, thanks to austerity measures implemented by Congress.

Besides shepherding a massive spending bill through Congress, Chao must work with lawmakers to increase the annual federal budget for infrastructure projects if any lasting improvements are to be made for U.S. airports, highways, and rail networks. This could be the hardest aspect to accomplish with a Republican-controlled government, despite her deep connections to Republican leadership.


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Tags: politics

Photo credit: Now that Elaine Chao has been confirmed as Secretary of Transportation, the work will begin on a massive infrastructure improvement program. In this July 17, 2016 file photo, former Labor Secretary Elaine Chao and her husband, Senate Majority Leader Mitch McConnell, R-Ky., check out the stage during preparation for the Republican National Convention. 208107 / 208107

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