Transport Pick Chao Gets Conservatives’ Praise, Labor Criticism

President-elect Donald Trump has selected Elaine Chao, a former U.S. labor secretary who antagonized unions and cheered conservatives, to lead the government’s transportation policy.

Chao, 63, would become secretary of the Transportation Department in Trump’s Cabinet if confirmed by the Senate. In that post she would lead a $1 trillion infrastructure plan promised by the Trump administration to build highways, bridges and other projects.

“Secretary Chao’s extensive record of strong leadership and her expertise are invaluable assets in our mission to rebuild our infrastructure in a fiscally responsible manner,” Trump said in an e-mail. “She has an amazing life story and has helped countless Americans in her public service career."

Chao was deputy secretary of transportation in the administration of George H.W. Bush and she headed the Labor Department under President George W. Bush from 2001 to 2009. She is married to Senate Majority Leader Mitch McConnell, a Kentucky Republican.

“She was not only hostile to unions, she was hostile to all workers,” said David Madland, a senior fellow at the Center for American Progress, a progressive policy group. “The only thing they really did was promulgate new rules to make it much harder for unions to operate."

Chao issued regulations requiring more disclosure of union spending on lobbying and politics and passed rules that Democrats said created too many white-collar exemptions to overtime pay requirements. Republicans, however, defended the rules as adding overtime protection for 1.3 million workers.

‘Union Transparency’

Chao exposed union misdeeds while labor secretary, said James Sherk, a research fellow in labor economics at the Heritage Foundation, a conservative Washington-based policy group, and where Chao has worked as a distinguished fellow.

“Union executives fiercely opposed Secretary Chao’s efforts to expand union transparency,” Sherk said in an e-mail. “Under her leadership the Labor Department required unions to publicly itemize their expenditures and receipts, allowing rank-and-file union members to see how their money was getting spent. This transparency exposed serious corruption.”

Some labor leaders provided by the Trump transition team applauded her selection. Michael Sacco, president of the Seafarers International Union, said, “There is nobody better qualified to be secretary of transportation than Elaine Chao."

Chao is now a distinguished fellow focusing on topics including employment, labor mobility and trade at the Hudson Institute, a Washington-based policy group.

“I am so proud of Elaine as she continues her accomplished career in public service," McConnell said in an e-mail. "I am confident she will do an outstanding job for the nation in this new and important role."

When asked by reporters, McConnell said he wouldn’t recuse himself from a vote on her confirmation.

Infrastructure Package

Chao and McConnell would be pivotal figures on Capitol Hill shepherding Trump’s infrastructure plan.

The president-elected pledged in his victory speech to "rebuild our highways, bridges, tunnels, airports, schools, hospitals" and "put millions of our people to work." Ports, water pipes, sewage treatment plans and electrical grids can also fit under the definition of infrastructure.

That plan has support of some Democrats but faces potential resistance from House Republicans who are leery of added federal spending. His economic advisers are advocating the provision of as much as $140 billion in tax credits to support $1 trillion in infrastructure investment.

"No one gives a blank check anymore," Representative Kevin McCarthy, House Majority Leader, said when asked about the proposal. He said the chamber will have to look at what makes sense for quick construction. 

The Transportation Department regulates airlines, automobiles, railroads, trucking and busing. The agency has a budget of about $95 billion and more than 57,000 employees among its various divisions, including the Federal Highway Administration, Federal Aviation Administration, Federal Railroad Administration and the National Highway Traffic Safety Administration.

Labor Complaints

The Government Accountability Office, an investigative arm of Congress, said the Labor Department under Chao inadequately investigated complaints from low-wage and minimum-wage workers alleging that employers failed to pay the federal minimum wage and required overtime, according to a July 2008 report. In one example, the department told a woman receiving room and board, but no pay, for working as a night attendant at an assisted living facility that she could file a private lawsuit, according to the report.

In another report a year later, GAO said Labor Department procedures “left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn.”

Chao was born in Taiwan and didn’t speak English when she arrived with her family in the U.S. at age 8, according to a biography on her website. She graduated from Harvard Business School and was vice president of syndications at BankAmerica Capital Markets Group and a banker with Citicorp in New York before entering public service that included leading the Peace Corps.

Chao sits on the boards of News Corp., Wells Fargo & Co., Vulcan Materials Co. and Ingersoll-Rand Plc, according to data gathered by Bloomberg. She previously served on the board of Bloomberg Philanthropies.

Trump just chose “the best” cabinet member from the Bush administration, Grover Norquist, founder of Americans for Tax Reform, said in a Tweet Tuesday.