Chao Says All Options on Table to Fund Trump Infrastructure Plan

(Bloomberg) -- President Donald Trump’s administration will consider "all revenue sources" to finance his plan to upgrade U.S. roads, bridges and other infrastructure, Transportation Secretary Elaine Chao said during a House committee hearing.

Chao acknowledged Tuesday that paying for the plan is a major issue, and she told members of the House Transportation and Infrastructure Committee that the administration wants to work with Congress to find bipartisan solutions.

“We have not yet come to a resolution on that,” Chao told lawmakers. “Everything’s on the table. And that this administration is open to considering all revenue sources.” She also appeared March 1 at a Senate panel to defend the president’s plan.

Trump’s infrastructure plan released last month is meant to be an outline for legislation and the starting point for negotiations with lawmakers. It calls for allocating at least $200 billion in federal funds over a decade, mostly to encourage states, localities and the private sector to spend at least $1.5 trillion. It also would reduce the time for issuing permits for projects to two years.

Committee Chairman Bill Shuster, a Pennsylvania Republican, has said any bill must be bipartisan and fiscally responsible. He supports shoring up the Highway Trust Fund, which pays for road, bridge and transit projects, by raising federal fuel taxes or through other ways to keep the fund from becoming insolvent as projected in fiscal 2021.

“The American people understand the need we have to invest in our infrastructure,” Shuster said in his opening statement.

Lame-Duck Session

Trump hasn’t focused on infrastructure in recent weeks while dealing with immigration, gun-control, tariffs and other issues, and key Republican senators have said they’re not sure there will be enough time to pass a bill this year. Shuster said last week that lawmakers may need to act during a lame-duck session after the November elections.

Democrats say $200 billion is not enough of a federal investment, and they’re concerned about weakening environmental protections to speed up project approvals. They’re also skeptical about the framework, which uses federal funding mostly as seed money to spur non-federal entities that own most infrastructure to generate their own revenue for projects.

“We need real, sustainable investments to improve the productivity and mobilities,” said Representative Elizabeth Esty, a Connecticut Democrat. “We can’t do it based on gimmicks, shifting responsibility among partners of the loss over years of underinvestment. What we need is a sound, long-term investment, at the federal level.”

Shuster and other lawmakers said Trump offered in a closed-door meeting on Feb. 14 to support a 25-cent increase in the federal gas tax. But key Republicans are opposed, and the president hasn’t addressed the issue publicly. The White House will only say that the gas tax has pros and cons and the president is open to funding options.

The secretary’s appearance came a day after her agency released a booklet describing problems with the transportation system and outlining the administration’s plan. It features options including asset recycling, when a public asset is leased and the proceeds are spent on other projects. Shuster has said the idea deserves study and asked Chao her thoughts about it.

“We want all funding and financing options to be available,” she said.

To contact the reporters on this story: Mark Niquette in Columbus at mniquette@bloomberg.net, Yueqi Yang in Washington at yyang492@bloomberg.net.

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Laurie Asséo, Justin Blum

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