Talking transportation infrastructure with Katie Thomson, former general counsel for DOT

Logistics Management's Jeff Berman recently talked about the current state of transportation infrastructure and various related issues in an interview with Katie Thomson, head of the Transportation Industry Group at Washington, D.C.-based law firm Morrison & Foerster. Thomson is the only person to serve as both general counsel at the U.S. Department of Transportation and chief counsel at the Federal Aviation Administration. A transcript of the conversation follows below. 

Logistics Management (LM): What is your take on the incoming administration’s goals for infrastructure development in the United States? Is freight likely to get a seat at the table?

Katie Thomson: The freight piece of this is critical for the economy. President-elect Trump has talked about spending $1 trillion over the next ten years on infrastructure, not all transportation-related but it certainly sounds like transportation would get a significant portion. But no specifics have been offered up on how it would be funded. There has been some talk about repatriation and a little about public-private partnerships. All of that should be in the mix but having spent the last seven and a half years at DOT, I am keenly aware of what the transportation system needs: a long-term funding solution that meets the needs of the country as a whole.

LM: And what does that entail?

Thomson: It cannot be a one-off, one-time injection of a lot of money for certain big projects in limited parts of the country. An initial infusion for that could be good, but it needs to be a long-term, comprehensive, [multi]modal fix. And I am very concerned that is not going to be where the focus of the administration is.  They are going to want to get some quick wins and call it a success. I do not view that as meaningful investment that this country so desperately needs to drive the economy and ensure that people and goods can get where they need to be in a safe and efficient way.

LM: When looking at some of the funding proposals for transportation infrastructure, some are viewed as “gimmicky” in that they may not have what is needed to sustain funding at needed and required levels, How do you view that as it relates to freight-related funding?

Thomson: DOT has the Fast Lane grants and TIGER, which are very good and important pieces, but they are just individual pieces and not lasting in terms of the nature of investment.  One really good shift I think we have seen and hope we will continue to see is that transportation is now being viewed in a more holistic and interconnected kind of way.

LM: In what ways?

Thomson: It used to be that you would see only highway projects or only transit projects or only port projects but now with things like TIGER and Fast Lane grants, there are more multimodal projects that really benefit the system as a whole, as opposed to one individual mode. I hope and expect that this mindset will continue at DOT.

LM: Given that there are limited specifics in regards to Trump’s infrastructure plans, how are you viewing the next steps from here? There does appear to be some cautious optimism at the moment.

Thomson: It is a matter of ‘what if’s” in looking to the next Congress at this point. Many people have also touted the announcement of Elaine Chao as the next DOT Secretary as a good person for the job, but I question that for a couple of reasons.

LM: What are those reasons?

Thomson: She has not done really any significant work in the transportation sector for more than 25 years, and the transportation system is much different now than it was then, and each of the users of the system are very different, as are the economics of the country. It is hard to have somebody who has not been fairly immersed in transportation issues to come in and grapple with some of those issues. The other thing I think is fairly important for DOT is to have someone who is a forceful visionary that can drive change in the administration and in Congress, and Elaine Chao, based on her most recent government experience as Labor Secretary for eight years, was not known for that visionary, deep-drive leadership in bringing people together to forge solutions and push Congress. I suspect that she is not the kind of person, even as smart and as talented as she is, that is really going to drive the long-term solutions that are needed.

LM: When you were at DOT, Ray LaHood was Secretary. He was typically very clear and direct in addressing the nation’s transportation’s needs and shortfalls, too. But he also, like many others, was faced with political gridlock. Is gridlock as likely to be an obstacle for Chao in getting infrastructure spending approved or will it be easier with a Republican White House and Congress?

Thomson: Republicans support it, but they want it to be revenue-neutral and not have to take on any debt or impose new taxes to do it. So if they can take money from one program and out it towards transportation, they are happy to do so. But what we so desperately need is a long-term sustainable fix that provides adequate funding over time. The political problem is that they do not want to pass legislation that is going to result in an increase in taxes or user fees period. Unless someone is willing to take the hit to do that, I don’t think we will get the solution we will need.

LM: What are some decent funding options in your opinion?

Thomson: Raising the gasoline tax is obviously the easiest, because it is in place and can easily be adjusted, but it is not the long-term solution, as it was not intended to cover all aspects of the transportation system, coupled with ongoing improvements in fuel economy, as well as fluctuating oil prices, which make the gas tax more of a less than reliable source of funding. What I would like to see Elaine Chao do is to bring together a diverse group of stakeholders to put all options on the table and come up with proposals to discuss and explore with Congress and push something through. But I think the focus is going to be on this short-term, one-time infusion of cash and a political unwillingness to grapple with a long-term problem. 

LM: On a more modal-specific or freight view, what are some of the things that need to be addressed and focused on aside from funding? 

Thomson: Infrastructure really is the starting point and the ending point, too. Good infrastructure leads to efficiency and safety improvements that everybody benefits from. But aside from that, I think on the safety side, and it is being see already in the aviation and freight railroad sectors, is a move towards safety management systems, which is a proactive way to gather data on all aspects of your operations, whether you are rail or an air carrier or part of a mass transit system and use that data to assess risk in your system for things like safety risk or financial risk and proactively address those risks before they become serious issues. The aviation sector has found tremendous benefit on identifying vulnerabilities in the system or the way operations at a certain airport work and can then be addressed before something serious happens and that helps benefit safety and saves companies a lot of money, too. It is just a smarter way to do business.

LM: With the attention given to infrastructure during the campaign and now post-election, does it feel like there is a “new normal” in the sense that it is getting a bigger and more important seat at the policy table?

Thomson: Yes and no. People view it as the bright and shiny object voters relate to, with things like new bridges, roads, or airport runways, when they see the, and view them as a sign that the economy is thriving and working. It excites people, but what I don’t think most politicians are thinking of is how to fix the system long-term, which is and remains the biggest problem of the transportation system and directly related to various aspects of the country’s infrastructure.