POLITICO's Morning Transportation, presented by Delta Air Lines: Chao hearing touches on infrastructure, TIGER, Gateway and Caltrain — New hearing, same problems with an ATC overhaul — Laptop ban still up in the air

By Tanya Snyder and Brianna Gurciullo | 05/18/2017 10:24 AM EDT

With help from Lauren Gardner and Stephanie Beasley

A WIDE-RANGING HEARING: Elaine Chao testified before lawmakers Wednesday for the first time as Transportation secretary, and the hearing covered a lot of territory over about two hours - from DOT's big-picture goals to President Donald Trump's budget, and from the Gateway Program in the Northeast to the Caltrain electrification project on the West Coast. Let's break down the highlights from Wednesday:

No list: At a Senate Environment and Public Works Committee hearing, Chao said the Trump administration's infrastructure plan "will not specify any list of projects." The comment came in response to Sen. Joni Ernst (R-Iowa), who asked Chao to elaborate on what she meant when she said Monday that the administration would want to provide direct funding to projects that can't attract private dollars but "have the potential to significantly increase GDP growth or to lift the American spirit." Chao didn't explain the "American spirit" line, but said her remarks were meant to reassure "that this administration understands the needs of rural America" and will address those needs.

An antsy Trump: Not much else new was said about the infrastructure plan. Chao said Trump is "very impatient" and "has asked that principles be released around the latter part of May," though she added the "principles have not been finalized for release."

Show me the money: Chao gave the same spiel about leveraging private dollars to invest $1 trillion in infrastructure. "In this particular environment, 100 percent government funding is probably not realistic, given the tremendous amount of resources that we need to devote," she said. For infrastructure, "nothing is off the table" in terms of funding and financing options, Chao said.

¯\_(ツ)_/¯: Chao said she doesn't know what the White House's full fiscal 2018 budget will say about the TIGER grant program come May 23, but that any funding "taken out hopefully would be put back" into the administration's infrastructure plan. Trump's so-called skinny budget, released in March, called for nixing TIGER funding.

Gateway 'an absolute priority': "Please be assured that Gateway is an absolute priority in terms of our focus," Chao said in response to a question from Sen. Cory Booker (D-N.J.) inquiring about the administration's position on the program in New York and New Jersey. Trump's budget outline recommended only providing Capital Investment Grant funding to transit projects that have full funding grant agreements, which would cut off Gateway at the knees.

About that Caltrain money: California's Democratic senators took issue with Chao's comments at the hearing about federal funding for the Caltrain electrification project in their state. "Secretary Chao testified today she cannot issue the full funding grant agreement for Caltrain even though Congress has enacted funds for the project. She said her decision is based on the fact that the president may not request sufficient funds for next year," Sens. Dianne Feinstein and Kamala Harris said in a statement Wednesday. "This would be a mistake. Her decision should not be about whether the president will request new funding, but rather about whether she will commit to release any funds Congress provides - both now and in the future." A spokesman for Caltrain told us the project can't access the federal funding that Congress has already appropriated for the project - and therefore can't break ground - until FTA gives final approval to a full funding agreement.

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SENATE EPW WORKING ON ITS OWN INFRASTRUCTURE BILL: After the hearing, EPW Chairman John Barrasso (R-Wyo.) said his committee is working on its own infrastructure package. Speaking at a Transportation Construction Coalition legislative briefing, Barrasso said he's working with "every Democrat" on the committee on a statement of general principles. "We are going to work with the White House, but we're not going to wait," he said, adding that EPW was "fully focused on an infrastructure package."

NEW HEARING, SAME PROBLEMS: The House Transportation Committee tackled the thorny subject of an air traffic control overhaul Wednesday in its first hearing on the subject this Congress, and the battle lines appear to be in the same places they were drawn last year. Even so, there were some developments to tide everyone over until Chairman Bill Shuster introduces a bill in the coming weeks to spin those operations away from the FAA and into a nonprofit corporation.

What's the difference? While it's unclear just how much Shuster will be willing to deviate from the version he championed last year, he did say he's receptive to changes and will be using the previous bill as a "framework." And one change Shuster said he plans to include is a clarification that the corporation would not be able to restrict general aviation's access to the nation's airspace, a vow he made after defending his GA bona fides. "I'm a GA guy. I'm a rural guy. There is nothing I want to do to hurt those people that are my constituents," he said before ending the hearing.

You down, DoD? Earlier in the hearing, Shuster submitted into the record a letter from Defense Secretary Jim Mattis signaling the department's support for "possible privatization" of air traffic control. Democrats like Sen. Bill Nelson , the ranking member of the Senate Commerce Committee, have cited concern from the Pentagon - which runs about 15 percent of the national airspace - as a major reason to reject Shuster's proposal. A trade publication focused on the business aviation sector published a rundown earlier this year of the concerns a DoD board has registered.

No, but really: Dems aren't convinced it's such a victory for Shuster, given the letter's reference to "potential risks" such a change could pose to DoD's duties. The department has formed a committee to evaluate its current relationship with the FAA within the next four months. And Nelson spokesman Bryan Gulley told MT the letter doesn't change his boss' mind, and he doesn't see it as a clear endorsement of Shuster's plan.

Eagle-eyed observations: Rep. Todd Rokita (R-Ind.), who voted against the bill last year, followed a line of questioning indicating he's still not enthused with the plan. "We didn't give the Indiana toll road to the truckers and say, 'Oh, I'm sure you'll take care of the cars, too,'" he quipped. And the committee's other GOP "no" vote last year (not to mention chairman hopeful), Missouri Rep. Sam Graves, ducked out of the hearing without asking questions and didn't return.

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LAPTOP BAN STILL UP IN THE AIR: EU and U.S. officials met Wednesday to talk about a potential expansion of a DHS carry-on ban on laptops on direct flights to the United States but failed to reach a decision, POLITICO Europe reports. A senior Trump administration official said extending the ban to Europe's airports remains "under consideration." U.S. and EU representatives will meet again next week, in Washington, D.C.

CBP POLYGRAPH WAIVER BILL GETS COMMITTEE APPROVAL: The Senate Homeland Security Committee on Wednesday approved, 9-2, a bill that could help Customs and Border Patrol deal with chronic understaffing issues. As our Stephanie Beasley reports for Pros, the legislation (S. 595) would waive a pre-employment polygraph testing requirement for military veterans and law enforcement officers that apply for open posts.

Amendments added: The committee added language from Chairman Ron Johnson (R-Wis.) specifying that the exemption for law enforcement officers should be limited to former federal officers who had been authorized to carry guns and make arrests. That means former TSA officers wouldn't be eligible. Also tacked onto the bill was an amendment from Sen. Heidi Heitkamp (D-N.D.) that would require a report within a year on the number of waivers CBP grants or denies and the percentage of people hired after receiving a waiver.

Harris holds out: CBP staffing has become a focal point for lawmakers as the Trump administration puts pressure on the agency to hire more officers as part of a crackdown on illegal immigration and as seaports and airports continue to highlight existing vacancies. But Harris, who voted "no," warned that exempting some applicants from the polygraph test could provide an opening for corruption and misconduct, adding that maintaining the "integrity" of CBP's workforce should be a priority. Sen. Maggie Hassan (D-N.H.) was the other "no" vote.

ADMINISTRATION TO HIT SEND ON NAFTA LETTER: The Trump administration is expected to send to Congress this morning a final letter notifying lawmakers that it intends to open trade talks with Canada and Mexico in an attempt to renegotiate NAFTA, according to an administration official and congressional aides. The timing of the letter would mean that NAFTA talks could start after Aug. 16 at the earliest, reports the Pro Trade team.

DeFazio presses trucking concerns: Rep. Peter DeFazio told reporters Wednesday that he got a sympathetic ear from Commerce Secretary Wilbur Ross when he raised concerns about trucking provisions of the NAFTA agreement that opened the U.S. market to Mexican truckers, who many members of Congress believe should not be on American roads. "He said we will see what we can do" to make improvements, the Oregon Democrat said. DeFazio, the ranking member of House T&I, said the administration also welcomed his request that it protect "Buy American" rules for transportation projects in NAFTA.

COAST GUARD 'DOING MORE WITH LESS'? At the Coast Guard Academy's commencement ceremony Wednesday, Commandant Adm. Paul Zukunft characterized his agency as "a service that does more with less," as Jennifer Scholtes notes in the Pro Budget & Appropriations Brief. If the Trump administration again suggests cutting funding for the Coast Guard (the idea was floated just ahead of the "skinny budget" release), the service may well be forced to make do with less. "There has been very worrisome suggestions that the Coast Guard would fare badly, that some of these tradeoffs within Homeland Security would come at their expense. And then there have been reassurances," Rep. David Price (D-N.C.) told Jen. Trump promised during his commencement speech that his administration intends to build "many" heavy icebreakers.

OH, CR-AP: A House Appropriations subcommittee chairman said Wednesday that he expects lawmakers to pass a yearlong continuing resolution in the fall. "The rest of the appropriators and chairmen will probably kill me, but, I think we're into a CR for 2018," said Rep. Mike Simpson , the chairman of the Energy and Water subpanel. "Simpson (R-Idaho) said infighting over President Donald Trump's proposed spending cuts could make it politically impossible for the GOP to find a path forward on fiscal 2018 appropriations bills, which are due in September," reports Pro Budget and Appropriations' Sarah Ferris.

YOU DON'T GOTTA KEEP 'EM SEPARATED: The New Democrat Coalition, a group of moderate Democrats in the House, sent a letter this week to Trump asking him to incorporate federal government spending in his infrastructure proposal and offset it "in part by a deemed repatriation in comprehensive tax reform." The members also say "investment should provide a combination of direct funding and innovative financing that addresses rural and main street infrastructure needs by prioritizing the repair and upgrading of outdated infrastructure, while also supporting major projects using private sector innovation where appropriate." Pro Tax's Aaron Lorenzo has more for Pros.

SHUSTER WARMS TO VMT FEE: Shuster said at the Transportation Construction Coalition's fly-in that "eventually, we've got to get to some measure of vehicle miles traveled" to fund the Highway Trust Fund. He noted that if repatriation is used to cut tax rates, as some Republican leaders are proposing, "we'll need to find a different revenue source to make sure the Highway Trust Fund stays whole" - but only for the next "decade or so" before there's a switch to a VMT fee of some kind "because we're all going to be driving cars that get 100 miles to the gallon, or electric, or God knows what in the next several years the really smart people are able to invent."

BRIDGE ACT IS BACK: Sens. Mark Warner (D-Va.) and Roy Blunt (R-Mo.) have reintroduced a bill that would create an "independent, nonpartisan financing authority" to offer loans to states and municipalities for infrastructure projects expected to cost $50 million or more. (The exception: rural projects, for which the minimum would be $10 million.)

Start-up money: "The authority would receive initial seed funding of up to $10 billion, which could incentivize private sector investment and make possible $300 billion or more in total project investment," the senators said. To become "self-sufficient," the authority would charge feeds for its loans.

FIRST IN MT: Michigan Democratic Sens. Gary Peters and Debbie Stabenow, as well as Sen. Lamar Alexander (R-Tenn.), will reintroduce a bill today that would authorize more than $313 million in fiscal year 2018 funding for the Vehicle Technologies Office within the Department of Energy. The legislation would then boost the office's funding 4 percent every year until 2023. VTO "supports research, development (R&D), and deployment of efficient and sustainable transportation technologies," according to its website.

FLY-IN: Thirty-four American Public Transportation Association members from the business world will visit DOT and the Hill today. They'll press for funding for transit in any infrastructure package and in the upcoming budget. They'll also call on lawmakers to reject any White House proposals to reduce transit-related funding.

FOR YOUR RADAR: Chao is in Atlanta today for a ribbon-cutting ceremony marking the reopening of the I-85 bridge that collapsed in late March, according to White House press secretary Sean Spicer.

THE AUTOBAHN:

- "Delta tops in on-time flights, Spirit worst for complaints." The Associated Press.

- "With repairs looming, officials plan to bring Amtrak back to Grand Central." POLITICO New York.

- "Senate advances five regulatory overhaul bills." POLITICO Pro Energy.

- Milwaukee County Sheriff David Clarke says he will serve as assistant secretary in the Department of Homeland Security's Office of Partnership and Engagement. POLITICO.

- "Delta Air Lines links its rewards program to Lyft." The New York Times.

- "Health of new CSX chief in focus ahead of compensation vote." The Wall Street Journal.

- "Missing plane carrying designer now being investigated by NTSB." Bloomberg.

- "House Democrats release $85B infrastructure plan." The Hill.

THE COUNTDOWN: DOT appropriations run out in 135 days. The FAA reauthorization expires in 135 days. Highway and transit policy is up for renewal in 1,232 days.

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