Chao Goes Off the Rails on New York-New Jersey Project

Secretary of Transportation nominee Elaine Chao testifies as her husband Senate Majority Leader Mitch McConnell, R-Ky., looks on during her Senate Commerce, Science and Transportation Committee confirmation hearing on Jan. 11. (Bill Clark/CQ Roll Call file photo)
Secretary of Transportation nominee Elaine Chao testifies as her husband Senate Majority Leader Mitch McConnell, R-Ky., looks on during her Senate Commerce, Science and Transportation Committee confirmation hearing on Jan. 11. (Bill Clark/CQ Roll Call file photo)
Posted March 6, 2018 at 5:16pm

Transportation Secretary Elaine Chao came to the House Transportation and Infrastructure Committee to answer questions about the administration’s infrastructure proposal Tuesday. But she spent much of the time confirming and defending the administration’s attempt to kill a New York and New Jersey rail program.

“Is the president of the United States personally intervening with the speaker to kill this project?” asked Sean Patrick Maloney, D-N.Y., referring to a weekend report in The Washington Post that President Donald Trump asked Speaker Paul D. Ryan to kill funding for the Gateway Program.

“Yes, the president is concerned about the viability of this project and the fact that New York and New Jersey have no skin in the game,” Chao said. “They need to step up and bear their fair share. They are two of the richest states in the country. If they absorb all of the funds, there will be no other funds for the rest of the country.”

But Chao’s spokeswoman later told reporters the secretary wasn’t verifying the report and that the administration wasn’t killing the Gateway program, but was only opposed to a proposed House appropriation. 

Watch: Chao, Maloney Go Back and Forth On Rail Project

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The hearing was scheduled to discuss the administration’s infrastructure proposal. 

Under questioning from Maloney and New Jersey Democrats Albio Sires and Donald M. Payne Jr., Chao forcefully and repeatedly said the position on Gateway didn’t represent a change from this or the previous administration, saying there was nothing in writing committing the federal government to pay anything for the $30 billion program.

She said the administration wanted to work with states to pay for the program, considered one of the most important infrastructure efforts in the country. The Gateway program is meant to update and expand the rail connections between New York and New Jersey, including with additional tunnels under the Hudson River to reduce the risk that a train breakdown could clog traffic.

For the second time in a week, Chao also deflected a question about the administration’s position, telling Maloney “you need to ask the White House” about why Trump sought to kill Gateway. She used the same line when Senate Environment and Public Works member Chris Van Hollen, D-Md., asked her about the president’s position on raising the gas tax.

Chao spokeswoman Marianne McInerney later said Trump hadn’t briefed Chao on his conversation with Ryan. She also said the administration’s opposition was to a $900 million provision, authored by House Appropriations Chairman Rodney Frelinghuysen, R-N.J, in a House-passed fiscal 2018 spending bill — not to Gateway itself.

“No one has said that this is a program that should be killed,” she said. “This is not a project that should be killed. What we simply are stating is that it needs to have a funding equation. So it needs to have a funding proposal. We hope that it’ll come forward. And, as is indicated in the infrastructure proposal and other places, there needs to be local skin in the game. Currently, there is not.”

The administration objected to the Frelinghuysen “earmark,” McInerney said, adding that funding for Gateway should go through the regular grant process.

Infrastructure initiative

Chao shed little new light on the intended reason for the hearing: the administration’s infrastructure proposal. She said the administration was purposely staying agnostic on a funding source for infrastructure. 

Chairman Bill Shuster, R-Pa., told CQ on Monday he was hoping to hear from Chao “how we’re going to fund an infrastructure bill.” He didn’t get many specifics. He told Chao that finding pay-fors was “critical.” 

“We want all funding and financing options to be on the table,” Chao said.

Shuster said conservatives criticize gas taxes as regressive because low-income rural users bear a disproportionate burden, but the benefits were progressive, with $1 collected in rural Pennsylvania resulted in $1.70 being spent.

“We can argue back and forth about this and we will for the foreseeable future,” he told Chao. “Unfortunately, we also have to talk to the Ways and Means Committee.”

Shuster raised the concept of asset recycling, which involves long-term leasing of federal assets to private companies, to pay for infrastructure.

Chao responded that that should be considered one option, and that looking to other countries like Australia, where asset recycling is popular, was a good step. She repeated that multiple funding and financing options should be considered without relying on a single one. 

Other committee members largely staked out familiar positions on the proposal, with Democrats saying it would push funding responsibility to state and local governments. 

Vice ranking Democrat Elizabeth Esty of Connecticut, filling in for Oregon’s Peter A. DeFazio, said the plan would devolve funding responsibility to states and local governments but concentrate decision-making power in the executive branch.

Chao said she disagreed, saying that states and local governments would be responsible for proposing projects to be funded.

First posted March 6, 2018 1:41 p.m.