Under questioning before the House Transportation and Infrastructure Committee on Tuesday, Chao told lawmakers that state officials in New Jersey and New York need to make firmer commitments to financing the project, which altogether is expected to cost $30 billion.
Rep. Sean Patrick Maloney (D-N.Y.) pressed Chao on the president’s involvement and whether he personally asked Ryan to block Gateway funding, which could exceed $900 million in the coming spending bill.
Chao at first declined to say, saying “I read it in the newspapers just like you did” and directing questions to the White House. But Maloney returned to the question: “Is the president of the United States personally intervening with the speaker to kill this project?”
“Yes,” Chao replied. “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. They need to step up and bear their fair share. They are two of the richest states in the country. If they absorb all these funds, there will be no other funds for the rest of the country.”
In a separate exchange with Chao, Rep. Donald Payne Jr. (D-N.J.) bristled at her characterization of the project’s funding, pointing to a handshake deal announced by the Obama administration that would have the states pick up half the project’s cost, with the federal government funding the other half.
“Well, sir, I think we have a disagreement about the facts,” Chao replied.
“Exactly,” Payne said, “and I know this administration and their alternate facts and how that works.”
“I take exception to that,” Chao replied. “I do not want to be stern, but the misinformation on this project has been stunning.”
Chao made no mention of the ongoing feud between Trump and Senate Minority Leader Charles E. Schumer (D-N.Y.), which political insiders believe is a key reason for Trump’s opposition to funding the project. Schumer is a key backer of the Gateway project, which would add a third railway tunnel under the Hudson River and replace an aging Amtrak drawbridge over the Hackensack River, among other improvements. Schumer has also blocked several Trump nominees from confirmation — including some, specifically, over the Gateway impasse.
In September, Schumer joined an Oval Office meeting that included Chao, New York Gov. Andrew M. Cuomo (D), then-New Jersey Gov. Chris Christie (R) and several lawmakers to discuss the project.
At that meeting, according to a person briefed on the conversations, Trump floated to Schumer the idea of using Gateway as a bargaining chip — trading the project’s funding for Democratic cooperation in funding a wall on the U.S.-Mexico border.
Schumer, in an interview Tuesday, said it would be a “loser” for Trump to personally target the Gateway project.
“The bottom line is very simple, okay? The Gateway project is very important to the jobs and economy of 50 million Americans on the northeastern seaboard and to the whole national economy, and no one should play politics with it,” he said. “If Gateway is not built and the [existing] tunnels can’t be used, it’ll cause our whole economy to get shaken up from one end of the country to the other.”
Asked about Chao’s claim the states need to have more “skin in the game,” Schumer replied: “Fifty percent is more than the federal government usually asks for such projects, so she’s just dead wrong. She doesn’t know her facts, or she’s dead wrong.”
During her exchange with Maloney, Chao dismissed the supposed 50-50 agreement.
“There is no such agreement,” she said. “The previous administration made no commitment except at a political rally in the heat of a campaign. There is no documentation evidencing any commitment. There’s no pending application on the nine projects that you collectively call Gateway.”
She was similarly combative with Rep. Albio Sires (D-N.J.), pushing back on the significance of the September White House meeting. The attendees, she said, “spun the results of that meeting as they wanted that meeting to be.”
“We were very polite. We were cordial,” she said. “There was no commitment at all.”
A Transportation Department official said much the same in a late-December letter to state officials in New Jersey and New York, calling the Obama administration agreement “nonexistent.”
But the administration’s opposition may not make a difference in the spending bill. Rep. Mario Diaz-Balart (R-Fla.), chairman of the House Appropriations subcommittee on transportation, said Tuesday it was unlikely that the $900 million set to be devoted to the project would be written out of the coming spending bill.
“Here’s the issue: At this stage, reopening that bill, I think, would blow everything up,” he said. “It’s not like you can reopen one little part of it. If you reopen [Gateway], everything’s reopened all over again.”