Regulatory

Trump DOT Pick Might Focus on Privatization Debate

By James T. McKenna | November 29, 2016
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Elaine Chao

Elaine Chao

President-elect Donald Trump's selection of a Transportation secretary might sharpen his incoming administration’s focus on privatization of transportation infrastructure like the U.S. traffic control system.

Trump on Nov. 29 named Elaine Chao as his nominee to lead the U.S. Transportation Dept. If confirmed by the U.S. Senate, she would oversee 11 federal agencies, including the FAA.

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A longtime Washington insider, Chao served in various high-level Transportation posts under President George H.W. Bush in the 1980s and was Labor secretary under President George W. Bush from 2001 to 2009. Since 1993, she has been married to Republican Sen. Mitch McConnell of Kentucky, currently Senate majority leader. She also served on Trump’s Asian-Pacific American advisory council during his campaign.

"Secretary Chao's extensive record of strong leadership and her expertise are invaluable assets in our mission to rebuild our infrastructure in a fiscally responsible manner," Trump said in naming her.

“The President-elect has outlined a clear vision to transform our country’s infrastructure, accelerate economic growth and productivity and create good paying jobs across the country,” said Chao, adding that she was honored to be nominated.

Trump has called for significant investments in infrastructure — on the order of $550 billion to $1 trillion over 10 years. “Our roads, bridges, airports, transit systems and ports will be the envy of the world and enhance the lives of all Americans,” he has said. His Transportation head presumably would play a key role in negotiating the structure and details of that investment plan with leaders in Congress.

Trump has offered few specifics on what his transportation infrastructure program would include, although a key element would appear to be tax breaks for companies and investors that develop privatized infrastructure components.

Chao is an advocate of privatization and of reduced government regulation. After her eight years as Labor secretary, she returned to conservative Washington D.C. think tank Heritage Foundation. She served as a distinguished fellow there from 2009 until last June, when she joined conservative Washington think tank Hudson Institute. Chao was serving as a distinguished fellow there, doing research on jobs and the economy, trade and competitiveness issues, when Trump selected her.

Her nomination comes at a time when Congress is enmeshed in a debate over the pros and cons of privatizing the FAA's air traffic organization. Major U.S. airlines have long argued that privatization would increase the efficiency and streamline budgeting for that organization, whose operations and improvement initiatives have been hobbled in past years by appropriations battles in the House of Representatives and Senate.

The airline-backed privatization effort has won the support of Rep. Bill Shuster, the Pennsylvania Republican who chairs the House Transportation and Infrastructure Committee. The proposal calls for an air traffic organization financed by user fees and overseen by a board dominated by airline representatives.

Other major aviation groups in Washington oppose such a privatization move, including the Aircraft Owners and Pilots Assn., Helicopter Assn. International and National Business Aviation Assn.

In a June 2015 meeting to discuss the privatization effort, HAI President Matt Zuccaro said, “Today, I know that I can go to Congress and get a hearing on our members’ operational concerns. But I can’t imagine having to go to a panel of airline companies, and asking them to focus on priorities for low-flying helicopters.”

After Trump’s selection of Chao, NBAA President and CEO Ed Bolen praised the move.

“We know that investment in infrastructure, including for aviation, is a priority for the incoming Trump administration, and the DOT secretary will be key in making this priority a reality," Bolen said. He congratulated Chao on her nomination, adding, "We look forward to working with her to continue promoting general aviation, and building on the progress being made toward a Next Generation aviation system that serves and protects all stakeholders and communities.”

Editor's Note: A previous version of this story said the Airports Council International-North America and the General Aviation Manufacturers Assn. oppose the ATC privatization initiative. That did not reflect the position of those groups accurately.

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