WASHINGTON (AP) – The Trump administration is looking to “unleash the potential” of private investors to boost the national transportation networks that underpin the U.S. economy, transportation secretary-designate Elaine Chao plans to tell lawmakers Tuesday.
Economic gains are being jeopardized by infrastructure “in need of repair, the specter of rising highway fatalities, growing congestion, and by a failure to keep pace with emerging technologies,” according to prepared testimony Chao is scheduled to deliver at a hearing of the Senate Commerce, Science and Transportation Committee.
Chao emphasized a significant difference between traditional program funding and “innovative financing tools” that can “take full advantage of the estimated trillions in capital that equity firms, pension funds, and endowments can invest.” She added that private investment should be “incentivized with a bold, new vision.”
While her testimony doesn’t detail those incentives, a white paper released by President-elect Donald Trump’s campaign shortly after the election proposes the government provide $137 billion in tax credits to infrastructure investors. The paper’s authors – billionaire investor Wilbur Ross, whom Trump has picked to be commerce secretary, and economics professor Peter Navarro, Trump’s choice to head the National Trade Council – estimate the tax credits will generate an estimated $1 trillion in private sector investment over 10 years.
But transportation experts point out that private investors are largely interested only in projects that produce a revenue stream with which to pay them back, like toll roads. There are relatively few large projects like that in the country. What state transportation departments most need, they say, is help with a growing backlog of maintenance and repair projects for aging highways, bridges and transit systems. Providing tax incentives also runs the risk of providing a windfall to investors for projects that would have been built anyway.