Trump’s Commerce pick backs public spending on transportation

Amid concerns from rural Republicans on Wednesday, President-elect Donald Trump’s nominee to lead the Commerce Department voiced support for public investments in transportation.

Wilbur Ross, who co-authored the private funding-focused infrastructure proposal that Trump floated on the campaign trail, assured senators during his confirmation hearing that the concept of using private financing was not the “be all and end all” solution.

The comments are raising hopes from transportation advocates that Trump’s infrastructure plan could include some direct federal spending on the issue.

“The infrastructure paper I put out was meant to provide another tool, not to be the be all and end all,” Ross told the Commerce, Science and Transportation Committee. “There will be some necessity for [direct federal spending on transportation], whether it’s in the form of guarantees or direct investment or whatever.

“But it’s really for the Congress and the president to figure out what should be the quantity of it and what should be the nature of the projects,” he added.

{mosads}One of Trump’s most prominent — and consistent — vows on the campaign trail was to move quickly on a sweeping package designed to repair the nation’s crumbling roads, bridges and other public works. The proposal has been pitched as a way to create jobs and boost the economy.

While the inclusion of direct spending in an infrastructure package could help gain the support of Senate Democrats and rural Republicans, it could also trip up support among fiscal conservatives, underscoring just how tricky it will be for the new administration to strike the right balance.

Although Trump has not yet sketched out his promised infrastructure bill in detail, the blueprint written up by Ross and Peter Navarro — whom Trump has tapped to be his trade adviser — would offer $137 billion in federal tax credits to private firms that back transportation projects.

They say the proposal would unlock $1 trillion worth of investment and be revenue neutral, though some economists have questioned those claims. Republicans including House Speaker Paul Ryan (R-Wis.) have ramped up calls to get more private capital off the sidelines instead of always having the government in charge of projects.

But there have been growing concerns among Democrats and rural Republicans that Trump’s plan to lure in money from the private sector to pay for transportation upgrades would leave some critical infrastructure needs, especially in rural areas, in the dust.

Infrastructure experts contend that private investors will only be attracted to projects that can recoup their costs through a revenue stream like tolls or user fees, which is more likely to occur in urban and high-traffic areas.

“There’s bipartisan interest in working together on infrastructure issues, but there are also questions about how the new administration’s plan will address infrastructure projects that do not have a readily available revenue source,” said Commerce Chairman Sen. John Thune (R-S.D.). “That would apply to most rural projects.”

Similar concerns were brought up at the Senate confirmation hearing on Elaine Chao, Trump’s pick to lead the Transportation Department. Chao also conceded that she thinks the new administration will be supportive of some direct federal infrastructure investments.

The comments from Ross and Chao offer new clues about the incoming administration’s vision for infrastructure spending, as Trump has so far only shown a preference for private investments.

“[Private financing] is not in place of concepts like Build America Bonds, it’s not in place of conventional financing. It simply was meant to provide another tool,” Ross said. “The reason I think we need another tool is the infrastructure needs of this country have gotten so monumental that we need any available source of capital in order to meet it on a timely basis.”

Trump has not yet defined which infrastructure needs he wants to upgrade, which could include everything from roads and bridges to power grids and broadband. Ross said Trump has put together a team, lead by real estate developers Richard LeFrak and Steven Roth, to start identifying which projects should be targeted under any infrastructure proposal.

“I don’t think the list has been refined … yet,” Ross said, but “they will play a big role in helping determine what are the key projects and how to implement them.”

Speaking after the hearing, Thune emphasized that any infrastructure plan would still need to be fully offset. He also sounded pleased that Ross acknowledged that private funding wouldn’t address rural infrastructure needs.

“What works in New York may not work in South Dakota,” Thune told reporters. “I think he expressed openness to… having some flexibility about how those things might be financed.”

Sylvan Lane contributed to this report.