Chao touts Trump’s infrastructure plan

Chao: private sector will bear the first losses if infrastructure investments are unsuccessful

Transportation Secretary Elaine Chao addressed county concerns about the composition of President Trump’s infrastructure plan, which leans considerably on state and local governments to put up money for projects and includes a lot of private investment. She also stressed the administration’s focus on rural infrastructure.

The infrastructure plan calls for $200 billion in federal funding, in hopes of stimulating a total investment of $1.5 trillion.

Chao said the plan to include private investors should put county officials at ease.

“The private sector helps to allocate risk. If the project isn’t successful, the private sector bears the first loss, instead of the taxpayer,” she said. “There are many private sector funds, private pension funds that want conservative investments like public infrastructure, which has collateral that will not walk away.”

Federal spending to meet all infrastructure needs, she said, would result in dislocation in the private investment markets, hindering growth and job creation.

Meanwhile, the ban on private investment in public infrastructure in 26 states highlights the kind of hurdles the infrastructure plan faces.

Chao also touted regulatory reform that would speed up project delivery, including concurrent permitting review and allowing sister agencies to share information rather than requiring them to conduct their own studies.

Roughly $50 billion will be dedicated to rural projects, with $40 billion of it allocated by formula and $10 billion by performance-based grants.

“We understand that rural America has different kinds of needs, and these rural infrastructure needs will be prioritized by state and local leaders like you,” she said.