In the depths of recession, just weeks out of her eight-year gig as President George W. Bush’s labor secretary, Elaine Chao had tough words for the incoming Obama administration’s massive stimulus package, which included tens of billions of dollars for transportation.
“Beneath the warm and fuzzy bipartisan rhetoric is the same old tax-and-spend crowd that has now taken control of our government and is implementing policies that will turn our country into Europe,” Chao told activists at the annual Conservative Political Action Conference in 2009.
During her low-key and genial Senate confirmation hearing Wednesday, President-elect Donald Trump’s nominee for transportation secretary maintained some of that earlier skepticism that a big bout of “traditional” government spending is the best way to rebuild America.
“The government does not have the resources to address all the infrastructure needs within our country,” Chao said, noting that there’s a “significant difference between traditional program funding and other innovative financing tools, such as public-private partnerships. . . . It’s also important to recognize that the way we build and deliver projects is as important as how much we invest.”
Advocates say such partnerships, which include toll roads and bridges, are designed to pull in private capital and tap market forces to make government projects more efficient. But critics point to high-profile failures where taxpayers were left both paying tolls and funneling government revenue to private firms in deals that can be locked in for generations.
Under bipartisan questioning from senators talking up big home-state projects, Chao acknowledged that there will be a role for old-fashioned government spending.
Sen. Cory Booker (D-N.J.) noted that the Trump campaign released a plan for up to $137 billion in tax breaks to spur private investment. But Booker said that others, including Trump’s chief strategist Stephen K. Bannon, have argued that “we need to be making direct investments in our infrastructure” to make the country globally competitive.
“Do you and President-elect Trump support an infrastructure package that will include direct federal spending?” Booker asked.
“I believe the answer is yes,” Chao responded.
How much, and for what, Chao wouldn’t say, noting that the incoming administration’s broader infrastructure task force will shape the plans and that the administration will work with Congress.
As a candidate, Trump assailed the sagging state of U.S. infrastructure, promising his tax-incentive plan would spur a $1 trillion infusion to fix it.
Chao’s husband, Senate Majority Leader Mitch McConnell (R-Ky.), said last month that one thing he doesn’t want “is a trillion-dollar stimulus” and that any package should be crafted “carefully and correctly.”
McConnell appeared Wednesday as the first witness for Chao, a tradition of hometown senators.
Chao’s father, James S.C. Chao, who founded an international shipping company, sat behind her and beamed throughout her three-hour hearing. She immigrated to the United States from Taiwan at age 8 without knowing English. She went on to graduate from Harvard Business School before working as a transportation banker.
She has a three-decade history in Washington. Her stints as a White House fellow, at the Peace Corps and in the Transportation and Labor departments were punctuated with periods on corporate boards, at think tanks and leading the United Way.
In a Trump Cabinet that promises to be a mix of outsiders and Washington hands, Chao will serve as a voice of experience, colleagues said.
“She could be a great mentor for other Cabinet secretaries that have never been in government. My sense is she probably will be,” said Samuel K. Skinner, who headed the Transportation Department when Chao was deputy secretary from 1989 to 1991. “She knows who to call, she knows how it works, and she knows how to put the pieces together.”
Given her many years in what Trump came to call “the swamp,” Chao has taken a few barbs from conservatives and the Trumpian right as well. Paul Mirengoff, a retired Washington lawyer and blogger for the conservative site Power Line, wrote that Chao’s selection was “neither a conservative choice nor a Trumpian one — it’s Bushian.”
As labor secretary for eight years, she presided over the swamp but “did little to drain, or even disturb, it,” Mirengoff wrote, adding that Chao was bent on “not upsetting the liberal status quo.” Trump’s “uninspired” choice “seems more like an attempt to check boxes — female, minority, married to Mitch McConnell, avoided trouble for eight years under Bush — than an effort to make a stellar appointment.”
The allegation that Chao is a creature of the status quo and represents the revenge of the establishment completely misreads her, said Cameron Findlay, who served as deputy labor secretary when she headed the department.
“You just don’t know Elaine if you’re saying that,” Findlay said. “She has been in Washington a long time, so she knows Washington very well. But there’s still a little bit of rebel in her. . . . She likes to challenge settled assumptions. I think you’ll see that at the Department of Transportation just as you did at Labor.”
Findlay cited Chao’s decision to require unions to disclose how they spent their members’ dues, an area where the government had largely been hands off. It was not a universally popular move, he said.
Asked Wednesday about her views on several contentious issues, Chao showed her practical — and tactical — side.
Questioned on how the federal government should regulate self-driving cars, she emphasized the real benefits of the technology for the elderly and others, and the real concerns about public acceptance, saying a national dialogue is needed.
Queried on an effort to privatize air traffic controllers, Chao steered clear.
“I’d like to get confirmed first,” she said, adding, “It’s obviously a major issue. The administration has not made a decision on this point. I am open to all ideas.”
Lori Aratani contributed to this report.