Elaine Chao has been approved to serve as the next secretary of Transportation. How will she implement Trump's infrastructure agenda?
Few, if any, who based their predictions on data analysis and modelling expected the events of election night to play out they way they did. While Donald Trump by all means will serve as an unconventional president, few concrete policies were espoused on the campaign trail.
Trump relied on coercive, often-combative language while campaigning, avoiding detailed plans about policy positions. Using broad language of "getting tough" or "something needs to change," the new administration has promised to turn Washington on its head. But how will his administration impact an infrastructure system in dire need of repair and a budding self-driving vehicle market?
During his campaign, Trump frequently mentioned the nation's crumbling infrastructure and called for an investment into widespread repairs. Now, nearly three months after being elected and two weeks into his presidency, we have some more clues about where the U.S. Department of Transportation (DOT) is headed and how the agency's next leader, Elaine Chao, will run the department.
Chao, who served as the Secretary of Labor for George W. Bush, was confirmed by the Senate on Jan. 31 in a 93-6 vote.
During her Jan. 11 confirmation hearing with the Senate Commerce, Science and Transportation Committee, Chao said that the DOT has, “a unique opportunity to address the exciting new technologies transforming travel and commerce,” which no doubt includes autonomous vehicles and hooking up roads with sensors to enable smarter transportation infrastructure.
And when it comes to transportation technologies, Chao will have large shoes to fill, as former Secretary of Transportation Anthony Foxx has built a legacy on recognizing pockets of innovation in the country and working with them to extend the benefits nationwide. In his outgoing cabinet memo (PDF), Foxx noted that we must continue to take advantage of technology. "The department has already established a strong foundation for utilizing technology to further our transportation goals by supporting innovation within a culture of safety.”
Chao echoed these sentiments during her confirmation hearing. “The U.S. Department of Transportation has a rare opportunity to shape the transformation of our critical infrastructure and the chance to lead the department at this pivotal historic time is a great honor," she said in her opening remarks. "First and foremost, safety will continue to be the primary objective.”
On the mind of many is the advent of autonomous vehicles, which are consistently making their way to the front page given their potential to decrease roadway fatalities, increase livable space and connect the disabled community to a reliable source of transportation.
“The private sector is driving this innovation,” Chao said during her hearing. “We want to work with Congress to position the federal government as a catalyst for safe, efficient technologies, not as an implement — and not as an impediment.”
This is not dissimilar to how the regulations have looked thus far; the autonomous vehicle regulations released by the DOT under Foxx's leadership were not issued as a strict guidance, but as a working, living document.
One thought from a professor who focuses on the economics of transportation with an emphasis on autonomous vehicle integration is that Chao will begin to regulate outcomes around safety rather than technologies, like requiring a gas pedal. “This is a good thing,” said Jeffrey Funk of the National University of Singapore. “We need to encourage private companies to come up with new and innovative designs.”
As for how Chao will keep regulations going, she said during her confirmation hearing that once confirmed, she would request that the National Highway Traffic Safety Administration (NHTSA) provide a full demonstration and briefing regarding state and federal laws and regulations related to autonomous vehicles.
"States retain the right to regulate on many issues related to motor vehicles, such as driver licensing requirements," she said, "but a 'patchwork' of laws could present challenges for the Department as well as the automobile and insurance industries."
And according to American Trucking Associations President and CEO Chris Spear, who worked with Chao during her time in the Department of Labor, Chao has a propensity to “go to great lengths to listen to everybody,” in order to create a federal framework that will work for everyone. Spear also called Chao a “natural” who “has so much depth and experience.”
One of the toughest challenges for the DOT in moving forward with implementing autonomous vehicles (AVs), Funk said, will be working across departments. “Connected AVs are about cellular and Wi-Fi and other IT infrastructure that will be important over time,” he said. “We also need to get telecom operators, infrastructure suppliers, and hardware and software suppliers involved.”
Much of what Chao said during her confirmation hearing kept with a theme of having the government step out of the way to allow for private-sector innovation. (And it's worth noting that Uber Founder and CEO Travis Kalanick and Tesla Chairman and CEO Elon Musk are both a part of Trump’s economic advisory team, and both companies have continued to push the envelope in the autonomous vehicle market.) But in answering a question from Sen. Cory Booker, D-N.J., about whether an infrastructure package would include direct federal funds, however, Chao replied, “I believe the answer is yes.”
As the new Transportation secretary, Chao will be charged with installing Trump's purported $1 trillion infrastructure proposal (PDF), which according to a Washington Post analysis, “doesn’t directly fund new roads, bridges, water systems or airports. … Instead, Trump’s plan provides tax breaks to private-sector investors who back profitable construction projects.“
In a document acquired by McClatchy that outlines the proposed top 50 infrastructure projects the Trump administration will focus on, however, it appears such projects will be 50 percent publiclly funded and 50 percent privately funded.
And while we are in the midst of the next revolution in mobility, Funk suggests that the basic groundwork must be set before autonomous vehicles integrate with public roadways.
“We should be thinking of infrastructure that will facilitate the implementation of AVs as we build roads and bridges,” he said. “Smart sensors and fiber lines are good ideas.”
As for working through these public-private partnerships (P3), Jonathan Kilman, a partner at Foley & Lardner who has represented transportation clients in Florida public policy, said he believes that Trump’s background in business will bode well.
“Modern transportation relies on technology,” said Kilman. “That will only increase in the future … I'd recommend the Trump administration continue to engage the leading P3 companies in the country in conversation; I suspect the solutions they are looking for would quickly be delivered.”
If the federal government were to utilize P3s, it would continue to own the pieces of infrastructure. If the agreements are not properly crafted, however, there is a danger that it could look more like privatization than a partnership.
While both P3s and privatization avoid major public funding for projects, privatization is a much more hands-off approach. And according to a report done by In the Public Interest (PDF), a research and policy center on privatization and responsible contracting, “Privatization weakens democratic control over public goods and services and increases economic, political, and racial inequality.”
Foxx led the department with a vision that responsibly designed infrastructure can help break down barriers in society and bridge lower income neighborhoods and job centers.
|Definition||Any process aimed at shifting functions and responsibilities, in whole or in part, from the government to the private sector, almost always involving the irrevocable transfer of public-sector assets.||A contractual agreement between the public and private sectors for the financing, developing, operation or managing of a public facility or service.|
|Contract Structure||Contract methods that result in private ownership.||Contract methods that result in varying levels of private participation.|
|Risk||Private sector has sole responsibility in general.*||Shared responsibility between partners.|
* Except as retained in a regulatory role. Source: California Debt and Investment Advisory Commission (PDF)
While Trump has promised to bring hundreds of jobs back to America, some remain skeptical about how much the administration will actually work to protect low income or minimum wage earners. Chao has received bipartisan support, but some pushback came from labor unions. While the head of the Labor Department, the Government Accountability Office released an audit (PDF) stating that the Wage and Hour Division “frequently responded inadequately to complaints, leaving low-wage workers vulnerable to wage theft.”
What that means for input and complaints regarding autonomous vehicles and other emerging transportation technologies remains to be seen. But one thing is for certain: The next secretary of transportation will not simply work on building roads and bridges and ensuring safe travel, Foxx said in his outgoing cabinet memo.
"The next administration is entering a period of advanced automated technologies in transportation, an infrastructure system that continues to work for some and against others in society, dramatic demographic shifts, an increase in extreme weather events in a changing climate, and a backlog of projects needed across the country with not enough resources to address it," he said. "Future administrations should, if the United States is to remain competitive in the global economy, devote significant time and energy to securing the resources needed to keep America competitive."