Join The
Coalition
Get The
Facts

Infrastructure in the News 11.29.16

NATIONAL NEWS

 

Wall Street Journal Opinion: Trump Trains, Trump Air, Trump Roads . . .

http://www.wsj.com/articles/trump-trains-trump-air-trump-roads-1480378400

Among Donald Trump’s few unambiguous campaign themes was to make public works great again, and Washington is gearing up for a big financing bill for highways, bridges, tunnels, airports, pipelines and more next year. The Trump team has shown some creative thinking so far, and they’ll need more for this exercise to get better results than political boondoggles as usual.

 

New York Times: Traders Bet on Big Stimulus Spending. Congress May Not Go Along.

http://www.nytimes.com/2016/11/29/us/politics/traders-bet-on-tax-cuts-and-new-spending-congress-may-not-go-along.html?_r=0

Stock traders celebrating Donald J. Trump’s election have been bidding up equity prices on a risky bet: that the new president will steer congressional Republicans in a U-turn away from their tightfisted fiscal policies — and bring Democrats along for the ride.

 

Associated Press: Feds: Railroads Slow to Make Progress on Train Technology

http://www.nytimes.com/aponline/2016/11/28/us/ap-us-train-technology-report.html

The nation's three busiest commuter railroads - which together serve nearly 1 million riders in the New York City area each day - continue to lag behind their smaller West Coast counterparts in installing sophisticated train-control technology that's seen as an antidote to crashes involving speeding and other human factors, federal regulators said Monday.

 

Washington Post: First commercial US-Havana flight lands in ramped-up travel

https://www.washingtonpost.com/national/first-flight-in-half-century-leaves-miami-bound-for-havana/2016/11/28/14e6fc20-b57c-11e6-939c-91749443c5e5_story.html

Just three days after the death of Fidel Castro, the first scheduled commercial flight from the U.S. to Havana in more than 50 years landed Monday to the applause of passengers and a water-spraying salute from firetrucks.

 

The Hill: Dems call for transportation funding boost in spending bill

http://thehill.com/policy/transportation/307771-dems-call-for-transportation-funding-boost-in-spending-bill

Top Democrats on the Transportation and Infrastructure Committee are urging House and Senate leaders to include an infrastructure funding boost in a short-term spending bill, pointing out that the increase was already paid for and approved by Congress last year.

 

CBS Money Watch: A potential pothole in Trump's infrastructure plan

http://www.cbsnews.com/news/donald-trumps-infrastructure-plan-has-a-potential-pothole/

Investors have cheered President-elect Donald Trump’s proposal to spend $1 trillion on infrastructure over the next 10 years. But economists are questioning the plan’s upside for the economy given its unusual and convoluted structure, which they say portends less actual infrastructure improvement and more private-sector profits.

 

Real Clear Markets: Infrastructure Spending Could Provide a Powerful Boost

http://www.realclearmarkets.com/articles/2016/11/29/infrastructure_spending_could_provide_a_powerful_boost_102445.html

Additional spending on infrastructure could deliver a powerful jolt to economic growth if President-elect Trump eschews conventional government approaches and gets the money out quickly and effectively.

 

U.S. News and World Report: Trump's Problematic Infrastructure Plan

http://www.usnews.com/opinion/economic-intelligence/articles/2016-11-28/donald-trumps-infrastructure-plan-leaves-taxpayers-with-all-the-risk

Much has been made of President-elect Trump's $1 trillion infrastructure plan. It became a key component of his campaign and has remained a central piece of the incoming president's agenda for his first 100 days in office. It even made an appearance in his victory speech, where he vowed to "rebuild our infrastructure, which will become ... second to none." While infrastructure spending is a goal that's likely to receive bipartisan support, recent history shows that federal infrastructure plans often result in wasted spending rather than improved transportation.

STATE NEWS

 

Associated Press: Feds show no ‘Love’ for New York roadway signs

https://www.washingtonpost.com/national/feds-show-no-love-for-new-york-state-roadway-signs/2016/11/29/c126ad90-b627-11e6-939c-91749443c5e5_story.html

The Federal Highway Administration isn’t showing any “Love” for some tourism signs along New York highways. Officials with the FHA and the New York state Department of Transportation will meet next month to discuss the removal of more than 500 “I Love NY” signs from state roadways.

 

Associated Press: Aging Brooklyn-Queens Expressway to get $1.7B in repairs

https://www.washingtonpost.com/national/aging-brooklyn-queens-expressway-to-get-17b-in-repairs/2016/11/29/fe17a4aa-b629-11e6-939c-91749443c5e5_story.html

Transportation officials in New York City have announced plans to spend $1.7 billion to repair a one-and-a-half mile stretch of the aging Brooklyn-Queens Expressway.

 

Associated Press: Workers at O’Hare airport expected to strike over wages

https://www.washingtonpost.com/national/workers-at-ohare-airport-expected-to-strike-over-wages/2016/11/29/040da586-b629-11e6-939c-91749443c5e5_story.html

Workers at Chicago’s O’Hare International Airport are expected to walk off the job over union rights and an hourly wage of $15. About 500 workers have committed to the strike on Tuesday. They include cabin cleaners, janitors, wheelchair attendants and baggage handlers.

 

Washington Post: There are four proposals to save Metro. Which might prevail?

https://www.washingtonpost.com/local/trafficandcommuting/there-are-four-proposals-to-save-metro-which-could-prevail/2016/11/28/489fdf0e-b1b8-11e6-8616-52b15787add0_story.html

There are no fewer than four distinct plans being floated to save Metro. Business leaders and elected officials urge a crusade to repair the transit system by restructuring its board, giving it reliable funding or handing it over to the federal government. They proclaim bravely that failure is not an option.

 

Washington Post: Preferred Metro late-night service proposal: 1 a.m. weekend closing; 11:30 p.m. on weekdays

https://www.washingtonpost.com/local/trafficandcommuting/preferred-metro-late-night-service-proposal-1-am-weekend-closing-1130-pm-on-weekdays/2016/11/28/314f4e6a-b592-11e6-959c-172c82123976_story.html

Metro would close at 1 a.m. on weekends and 11:30 p.m. weeknights under a proposal being recommended to the agency’s board this week, an effort by General Manager Paul J. Wiedefeld to carve out more time for track work and respond to pleas to maintain some late-night service.

 

Hartford Courant: Connecticut Senators: Support Possible For Trump Transportation Plan

http://www.courant.com/politics/hc-new-britain-transportation-plans-1129-20161128-story.html

Connecticut's U.S. senators are pledging either eager support or a tenacious fight against President-elect Donald Trump's plan to rebuild the nation's transportation infrastructure.

 

The Advocate: Transportation chief: $700 million spending hike 'good, practical'; talk turns to gas tax

http://www.theadvocate.com/baton_rouge/news/politics/article_2c831fe4-b58b-11e6-b2ce-3b9c1c19d513.html?sr_source=lift_amplify

A $700 million yearly hike in state transportation spending would be a practical way to tackle Louisiana's road and bridge problems, state Transportation and Development Secretary Shawn Wilson said Monday.

 

ABC 7: ILLINOIS TRANSPORTATION SECRETARY CONSIDERING TOLL BOOTHS ON EISENHOWER EXPRESSWAY

http://abc7chicago.com/traffic/il-transportation-secretary-considering-toll-booths-on-eisenhower-expy/1629568/

Illinois Transportation Secretary Richard Blankenhorn told the Chicago City Club toll booths on the Eisenhower Expressway could be a way to help with the budget.

POLITICO Morning Transportation - By Brianna Gurciullo | 11/29/2016 05:40 AM EDT

With help from Tanya Snyder, Adam Behsudi, Lauren Gardner and Jennifer Scholtes

WHAT WILL TRUMP DO ABOUT TRAVEL TO CUBA? The travel industry is hoping Donald Trump won't roll back the steps taken by the Obama administration to allow more Americans to visit Cuba — largely because, they say, the business benefits of a more open policy for U.S. airlines and hotel companies should appeal to the president-elect and businessman. Trump's position on allowing commercial flights from the United States to Cuba isn't clear. He could undo President Barack Obama's executive orders, halting those flights and re-imposing restrictions on travel to the island nation. But Trump can expect an uproar from the business community if he does, as our Tanya Snyder reports for Pros.

Wishy-washy: As Tanya notes, Trump took a more conciliatory position on Cuba early in his campaign, saying during the primary that "50 years is enough" of the Cold War-era sanctions. He added that "the concept of opening with Cuba is fine," but noted "we should have made a better deal." A trip to Miami during the general election sparked a marked toughening of his stance, and his tweets since Fidel Castro died prove that he isn't backing down yet.

So far unfazed: Airlines have completed hundreds of round-trip flights between the United States and Cuba since late August, according to DOT. On Monday, American Airlines conducted the first scheduled commercial flight from the United States to Havana in over a half-century. If the U.S. government cracks down anew on travel to Cuba, airlines would take a financial hit. Thus far, U.S. airlines and others in the travel business that have invested in establishing themselves in Cuba are all systems go. The U.S. Chamber of Commerce wants the government to go further and remove all obstacles to travel, arguing that the barriers still in place "put U.S. companies at a disadvantage against their global competitors."

IT'S TUESDAY: Good morning and thanks for tuning in to POLITICO's Morning Transportation, your daily tipsheet on all things trains, planes, automobiles and ports. Please send tips, feedback and, of course, song lyrics to bgurciullo@politico.com or @brigurciullo.

"Got a motor head baby, want to ride all night long. Got a motor head baby, want to ride all night long. If you don't have transportation, yes, she treats you wrong." (h/t Josh Nickerson at Skadden)

Want to keep up with MT's song picks? Follow our Spotify playlist.

ABOUT THAT FLIGHT TO HAVANA: Victor Mendez, the deputy secretary of Transportation, was on the flight to Cuba's capital. The plane departed Monday morning from Miami International Airport with 145 passengers on board, The Miami Herald reports. JetBlue, Spirit, Delta and Frontier are also starting service from U.S. cities to Havana this week.

BOEING GETS HIT AT THE WTO, OR DOES IT? One person's partial victory is another person's "major win." That seemed to be the upshot from a WTO ruling Monday that faulted one of the tax breaks given to Boeing as inconsistent with international trade rules as a prohibited subsidy. Six other tax incentives Washington state made available to the U.S. aircraft manufacturer were not found to be in violation.

The European Commission hailed the ruling as a "major win" and European competitor Airbus called it a "knockout blow." European Union Trade Commissioner Cecilia Malmström said the panel found Washington state provided $5.7 billion in illegal subsidies and called for their removal "without any delay."

However, U.S. and Boeing officials said the value of the Washington state tax break found to be a "prohibited subsidy" under WTO rules was no more than $50 million annually, and Boeing had yet to receive any of the tax benefits intended for its new 777X wide-body plane because it's not yet available for sale.

"The WTO rejected six of the seven tax measures challenged by the EU, along with their main argument in this case," said Matthew McAlvanah, a spokesman for the Office of the U.S. Trade Representative. "On the single fallback argument the WTO accepted, we are currently reviewing the report in consultation with Washington state officials to decide how to respond. This case is a small fraction of the overall aerospace dispute, on which the WTO has found overwhelmingly in the United States' favor." Read the full story from Pro Trade's Doug Palmer here.

WASHINGTON GOVERNOR: NO RUSH TO TAKE ACTION: Tara Lee, a spokeswoman for Washington Gov. Jay Inslee, said it was too early to say what action the state might take in response to the ruling since the panel report is likely to be appealed. But she defended the legislation passed by the Legislature in 2013 and said the EU's estimate that it provided $5.7 billion in tax breaks for Boeing to manufacture the 777X was "wildly inflated" for the reason Boeing cited.

"Three years ago, lawmakers passed, on a bipartisan basis, a package of legislation that resulted in the Boeing 777X being assembled in Washington state, ensuring the health of the Washington aerospace industry and sustaining jobs in our state," Lee told our friends at Morning Trade. "That was the right thing to do for our state's economic future and it still is."

Rep. Dave Reichert, a Washington state Republican who chairs the House Ways and Means Subcommittee on Trade, cheered the decision. "By rejecting the EU's claims on six of the seven tax measures at issue, this decision, in conjunction with previous WTO rulings, makes clear that in this long-standing set of aircraft disputes, it is the illegal support provided by the EU and several of its member states that is responsible for the growth of Airbus while the same cannot be said of Boeing," Reichert said. "I will continue fighting for a level playing field for American workers and the success of the aerospace industry in my home state."

BARLETTA A CANDIDATE FOR TRANSPO SECRETARY: A source close to the transition team told POLITICO's Rachael Bade that Rep. Lou Barletta (R-Pa.) is under consideration for the top post at DOT. Barletta is assisting as Trump chooses Cabinet members and served as an adviser during the campaign. "As a cardinal on the House Transportation Committee, Barletta, just elected to his fourth term, met Trump while overseeing his bid to turn the historic Beltway Post Office building into a ritzy hotel," Rachael reports. "Barletta also invited Trump to speak on a December 2013 panel about public-private partnerships that he hosted as emergency management subcommittee chairman. Trump couldn't go, but sent his daughter Ivanka in his stead."

Loyalty pays off: Barletta is part of a small group of House Republicans who supported Trump early on and now finds himself in a powerful position. As Rachael reports: "The few who were willing to endure the ridicule of other GOP lawmakers by placing their chips on Trump early have been vaulted from backbench obscurity to now arguably rivaling the influence of GOP congressional leaders."

ON TODAY'S MEETING LIST: The transition team says Trump and Vice President-elect Mike Pence are scheduled to meet today with Barletta and House Homeland Security Chairman Mike McCaul (R-Texas), a potential pick for head of DHS. Marion Blakey, who served as FAA administrator during George W. Bush's administration, is also scheduled to meet with Trump and Pence today. Blakey previously led the NTSB and NHTSA. She's now the president and CEO of Rolls-Royce North America.

MT note: We previously reported that Barletta met with Trump on Friday. But a spokesman for Barletta told us that the meeting was actually scheduled for Monday and got pushed to today. "We are not commenting on the topic or purpose of the meeting," said Barletta's communications director, Tim Murtaugh. "Only that the congressman looks forward to it and will enjoy talking about ideas for moving the country forward."

McCONNELL STILL HOPEFUL FOR WRDA: Senate Majority Leader Mitch McConnell outlined on Monday the legislation he hopes to finish before the 114th Congress comes to an end. In addition to passing legislation to fund the government, McConnell said on the Senate floor that it is "good to see the respective committees making important progress on conference reports" for NDAA and WRDA. "We'll work with our counterparts in the House to consider each of those in the coming days and to send final bills to the president's desk for signature," McConnell said, according to a transcript from his office.

SPEAKING OF FUNDING THE FEDERAL GOVERNMENT: The text for a continuing resolution will probably be released next week, Ben Weyl reports for the Pro Budget & Appropriations Brief. "The CR is perhaps the last train leaving the station for the 114th Congress, and any measures yet to be passed could hitch a ride on the funding bill," Ben reports. "And unlike some other spending stopgap bills, this one is expected to include a large number of 'anomalies' — provisions to allow the government to start or modify programs rather than keep everything on autopilot into the spring."

STATE OF THE STATES REGULATING DRIVERLESS CARS: MICHIGAN: This morning, Pros can read the second Q&A in our series of interviews with state officials trying to tackle the complex task of regulating driverless cars. Our Tanya Snyder spoke with Kirk Steudle, the director of Michigan's DOT. Michigan has taken a much different approach to regulation than California, the state that was the focus of our first Q&A. Right after the election, Michigan's legislature passed bills to let companies test vehicles on public roads without a driver inside and fully deploy self-driving cars.

"We actually did not like the way that California went," Steudle explained to Tanya. "We thought it was way too prescriptive and way too overbearing of government, and we said there needs to be another option on the table — which is the reason we pushed forward with our own legislation, even knowing NHTSA was coming up with some model legislation, and frankly, in an attempt to maybe influence NHTSA as well, saying look, we don't believe the California model is the way to go; we don't think it was right." Pros can check out the full Q&A here.

OECD OPTIMISTIC ABOUT TRUMP'S INFRASTRUCTURE IDEAS: Trump's plans to both cut individual and business tax rates as well as invest $1 trillion in infrastructure would give a boost to the U.S. economy, especially in 2018, according to a new report by the Organization for Economic Cooperation and Development. OECD estimates that the nation's economic growth will reach 2.3 percent in 2017 and 3 percent in 2018, Pro Tax's Toby Eckert reports. Meanwhile, global economic growth will hit 3.3 percent in 2017 and 3.6 percent in 2018.

Catherine Mann, the chief economist at OECD, told The Financial Times that the organization anticipates a stimulus equal to "0.25 to 0.5 percent of national income in the second half of 2017, mostly spent on public infrastructure and 1 percent or so in 2018 coming from tax cuts." But protectionist trade policies would hurt the possible benefits of Trump's infrastructure and tax plans, the OECD said.

INCHING ALONG FOR MILES: Freight and passenger railroads progressed ever so slightly last quarter in getting positive train control up and running on their tracks, and federal regulators are trying to keep the pressure on in the last days of the Obama administration. According to data crunched by FRA, freight carriers have the technology operational on 12 percent of their rails, a bump from 9 percent in the first half of 2016.

Meanwhile, commuter lines and Amtrak saw PTC become active on 23 percent of the route miles they control, a mere 1 percent increase over the second quarter. FRA said that bump largely reflects headway made by West Coast commuter railroads, Amtrak and Philadelphia's SEPTA network (which our Lauren Gardner visited over the Thanksgiving holiday to check out their PTC system).

Dollars and cents: Association of American Railroads spokesman Ed Greenberg noted to MT that freight railroads have spent more than $7.1 billion on PTC implementation, with the final price tag expected to come in around $10.6 billion once the technology is fully operational. DOT is on track to have provided nearly $1 billion in grant money to passenger railroads for PTC implementation once $199 million in fiscal 2017 grants kicks in, and FRA loaned New York's Metropolitan Transportation Authority $967 million to deploy the technology on the Metro-North and Long Island railroads.

SHIFTING GEARS: Donelle Harder, who recently stepped down as communications director for Senate EPW Chairman Jim Inhofe (R-Okla.), is now vice president of communications at the Oklahoma Oil & Gas Association.

THE AUTOBAHN:

— "Preferred Metro late-night service proposal: 1 a.m. weekend closing; 11:30 p.m. on weekdays." The Washington Post.

— "[European] Commission sets connected car goals for 2019." POLITICO Europe.

— "Delta bans rude pro-Trump passenger for life, gives refunds." The Associated Press.

— "Uber drivers to join protest for $15 minimum wage." CNN Money.

— "German court rejects Lufthansa bid to prevent pilots' strike." Reuters.

— "San Francisco's public railway system hit by hackers." The Associated Press.

THE COUNTDOWN: DOT appropriations run out in 10 days. The FAA reauthorization expires in 304 days. Highway and transit policy is up for renewal in 1,404 days.

THE DAY AHEAD:

9 a.m. — The Transit Advisory Committee for Safety begins a two-day meeting. National Association of Home Builders, 1201 15th St. NW.

Did we miss an event? Let MT know at transpocalendar@politicopro.com.

To view online:
https://www.politicopro.com/tipsheets/morning-transportation/2016/11/what-will-trump-do-about-travel-to-cuba-020313

Stories from POLITICO Pro

Trump will face business opposition if he tries to reverse Cuba travel opening Back

By Tanya Snyder | 11/28/2016 05:04 PM EDT

If Donald Trump follows through on repeated threats to bring back strict limits on travel to Cuba, he'll risk a major backlash from the business community.

"Technically he could, with a signature, end direct flights; he could end all the different general licenses that Obama granted for the 12 categories of travel," said Mavis Anderson, senior associate at the Latin America Working Group, who for decades has led U.S. advocacy efforts to end the travel and trade restrictions against Cuba. "But he'll have trouble doing that. He's going to get tremendous blowback from the business community, the hospitality community, the airline community."

The agriculture and travel industries have for decades been at the forefront of business advocacy against the trade embargo and the travel ban, which have been in place since soon after the triumph of the Cuban revolution. President Barack Obama's executive orders re-establishing diplomatic and business relations with Cuba, as well as travel between the two countries, have brought about a frenetic flurry of activity among travel businesses that have been hungering for access to Cuba for years.

But those executive orders don't have the staying power of an act of Congress. They can be undone with the stroke of a pen.

Marazul Charters has arranged travel between the U.S. and Cuba dating back long before the rapprochement. Marazul Vice President Bob Guild has been watching developments in Cuba policy for decades — a small opening under Bill Clinton, only to slam shut again under George W. Bush, and then the most recent thaw under Obama — and says that stopping now would have "a much more massive impact than any time over the last 40 years."

"Commercial carriers have invested large amounts of money flying to all the different airports in Cuba, not only Havana," Guild said. "They have hired people on the ground in Cuba but they also, of course, have their own personnel and their own aircraft that are flying back and forth now every day between the United States and Cuba, based on these new regulations."

U.S. airlines started running direct flights to Cuba in August and are ramping up quickly, with many more starting service this week.

A renewal of travel restrictions "would be very bad for the American travel industry," Guild said. "It would mean layoffs; people won't have jobs, and it will mean the same in Cuba, for the Cuban people who have been employed in the travel industry."

Though industry officials acknowledge some jitters, the airlines and other businesses operating in Cuba are moving forward without any major change in strategy.

American Airlines launched its Miami-Havana service Monday, just as Trump was tweeting about a possible re-freeze in relations. Matt Miller, a spokesman from American, said the airline was "full steam ahead" on rolling out service to Cuba despite Trump's comments. The airline has recently decided to reduce its daily flights from 13 to 10 a day starting in February, but that decision was made the week before the election, not as a reaction to fear of how Trump might handle bilateral relations.

"We remain committed to working with government officials in both the U.S. and Cuba to ensure an adequate framework is in place to help facilitate the movement of people and goods between our two nations," said Kathy Allen, a spokeswoman for Airlines for America.

Carnival Cruise Line has started running cruises to Cuba. Starwood Hotels is investing in three Cuban hotels. Companies like these will "rise up" if Trump tries to bring back strict limitations on travel to the island, predicted Anderson.

The U.S. Chamber of Commerce, which represents every major U.S. airline except Delta, has called unequivocally for an end to all barriers to travel. "These restrictions ... put U.S. companies at a disadvantage against their global competitors and diminish opportunities for growth and job creation in the U.S. travel industry," wrote Jodi Hanson Bond, the Chamber's vice president for the Americas, in a blog post on the day of the first scheduled commercial flight to Cuba in August. "Not only that, but travel restrictions limit Cubans' ability to improve their standard of living and their economic independence from the state."

Others are doubtful that Trump will follow through on his tough talk for one simple reason: He's a businessman — in the travel business, no less.

"I don't think we will see any retreat in the progress made," said Henry Harteveldt, a travel industry analyst and adviser at the Atmosphere Research Group, which he founded. "I'm just not sure how quickly or how broadly we will see further progress take place."

Harteveldt also speculated that Trump's hotel empire might be influencing his thinking about Cuba policy. The "better deal" Trump is insisting on from the Cuban government may, Harteveldt ventured, involve an end to the Cuban policy of maintaining a majority stake in any foreign business venture on the island.

"I'm sure Mr. Trump, at some point once he leaves office, would love to see a Trump Hotel and Resort built in Cuba — perhaps even multiple properties built there — and I suspect he would not like to have the Cuban government as a business partner."

The Republican-controlled Congress still takes an official line in favor of continued sanctions and against Obama's efforts toward normalization, but experts say there are cracks in that façade. Bills to end the travel ban in the House and Senate have attracted a modest number of Republican co-sponsors.

Sen. Jeff Flake (R-Ariz.), a leading force for ending trade and travel restrictions, told Fox News' Bill Hemmer Monday that in his 15 trips to Cuba over many years, he's noticed that greater engagement with the United States has brought about greater freedom for the Cuban people. "Twenty-five percent of the Cuban workforce is now in the private sector," Flake said. "They have a measure of economic and political freedom that they didn't have before, and that's a good thing. So I hope that we continue to allow Americans to travel to Cuba."

In polling, the American people have long supported re-establishing diplomatic relations and want an end to travel restrictions. The U.S. maintains travel restrictions on no other countries — not North Korea, not Iran, not Syria.

Trump had taken a more conciliatory position on Cuba early in the campaign, saying during the primary that "50 years is enough" of the cold war-era sanctions and adding, "The concept of opening with Cuba is fine," while noting that he thought "we should have made a better deal." A trip to Miami during the general election sparked a marked toughening of his stance, and his recent tweets prove that he isn't backing down yet.

The president-elect greeted the news Sunday of Castro's death at age 90 with the ebullient tweet, "Fidel Castro is dead!" followed a few hours later by condemnation of Castro as a "brutal dictator." Monday morning, Trump turned to policy, "If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the U.S. as a whole, I will terminate deal," he tweeted.

Incoming White House chief of staff Reince Priebus clarified Sunday that the "better deal" Trump envisions would involve "some changes in their government."

"Repression, open markets, freedom of religion, political prisoners — these things need to change in order to have open and free relationships," Priebus said on Fox News Sunday, "and that's what president-elect Trump believes, and that's where he's going to head."

Trump's inclusion of Mauricio Claver-Carone — a fierce opponent to any opening with Cuba — in his transition team for the Treasury Department has further signaled a decision to hew to hard line on Cuba.

Back

WTO hands EU partial victory in Boeing trade spat Back

By Doug Palmer | 11/28/2016 10:05 AM EDT

The WTO handed the European Union a partial victory Monday in a long-running, high-stakes battle with the United States over subsidies for aircraft manufacturers Boeing and Airbus, but the two sides immediately clashed over the size of the win.

"The panel has found that the additional massive subsidies of $5.7 billion provided by Washington State to Boeing are strictly illegal," European Union Trade Commissioner Cecilia Malmström said in a statement. "We expect the U.S. to respect the rules, uphold fair competition, and withdraw these subsidies without any delay."

However, U.S. and Boeing officials said the value of the one Washington state tax break found to be a "prohibited subsidy" under WTO rules was no more than $50 million annually, and Boeing had yet to receive any of the tax benefits intended for its new 777X wide-body plane because it's not yet available for sale.

"The WTO rejected six of the seven tax measures challenged by the EU, along with their main argument in this case," said Matthew McAlvanah, a spokesman for the Office of the U.S. Trade Representative. "On the single fallback argument the WTO accepted, we are currently reviewing the report in consultation with Washington state officials to decide how to respond. This case is a small fraction of the overall aerospace dispute, on which the WTO has found overwhelmingly in the United States' favor."

The tax break in question is a reduction in Washington state's Business and Occupancy tax rate from 0.484 percent for all manufacturers to 0.2904 percent for the aerospace sector. One source estimated Boeing would have sell at least 8,000 777X planes for the value of the tax break to reach $5.7 billion, a figure he said was unrealistically high given historical sales rates.

Still, the ruling could give the EU additional ammunition as it faces the possibility that President-elect Donald Trump's administration could impose billions of dollars in trade sanctions on the EU if the two sides cannot reach a negotiated settlement to the 12-year-old trade spat.

"I continue to think that the only way out of the ridiculous series of disputes initiated by the U.S. is to agree on a set of globally applicable rules for the support of the civil aircraft industry, which would benefit both sides of the Atlantic," Airbus Group Chief Executive Officer Tom Enders said in a statement, referring to pressures arising from increased competition in Russia and Asia and new Canadian government subsidies for its domestic aircraft manufacturer, Bombardier.

"We need a global framework, like the one ICAO [International Civilian Aviation Organization] recently elaborated for aviation CO2 emissions," Enders added. "This WTO battle is a battle of the past which benefits only the armies of lawyers both sides employ for more than a decade."

In a case filed by the EU in 2014, that WTO dispute settlement panel ruled that one of seven tax incentives provided by the state of Washington to encourage Boeing to manufacture its new wide-body 777X aircraft in the state is a "prohibited" subsidy under WTO rules.

That panel urged the United States to remove the offending measure "without delay" and within 90 days. However, with the expected appeals, the tax incentive could remain on the books for at least another year as the two sides continue their litigation.

The European Commission filed the case after Washington moved to keep 777X production in the state by extending a tax incentives program for Boeing and other large aircraft manufacturers from 2024 to 2040.

State officials have put the overall size of the tax breaks at $8.7 billion, a figure that both the EU and Airbus have embraced but Boeing says is exaggerated.

The WTO ruled that only one of the seven tax incentives challenged by the EU is a prohibited subsidy, so the amount of the tax benefits affected by the decision is no more than $50 million annually, Boeing said.

The U.S. aircraft manufacturer also said it has yet to receive any benefit from the tax incentive since it only takes effect when the 777X goes on the market in another four years.

"Today's decision is a complete victory for the United States, Washington State and Boeing," the company's general counsel, J. Michael Luttig, said in a statement. "The WTO found in September that Airbus has received $22 billion in illegal subsidies from the EU and that without these subsidies neither Airbus itself nor any of its airplanes would even exist today. By contrast, in rejecting virtually every claim made by the EU in this case, the WTO found today that Boeing has not received a penny of impermissible subsidies."

Monday's ruling is the latest chapter in a dispute dating back to 2004 that could finally come to a head during the Trump administration through either a negotiated settlement or a damaging WTO-sanctioned trade war.

In September, the WTO ruled the EU had not complied with a previous decision against $18 billion in subsidized European government loans to help Airbus develop new aircraft. European governments had compounded the problem by providing more than $4 billion in new subsidized financing for the A350 XWB family of wide-body jets, the global trade body said.

The EU appealed the ruling, but Boeing officials say they hope a final decision in favor of the United States could come in the spring. That would allow the Trump administration to ask the WTO to authorize trade retaliation equal to the amount of trade damage done by the European "launch aid" loans.

The office of the U.S. Trade Representatives has previously estimated the amount of damages at $7 billion to $10 billion annually — a figure that does not include the impact of the financing for the A350 XWB family. However, it would be up to the WTO to decide the retaliation amount.

The United States had hoped to prove the EU provided prohibited subsidies for Airbus, but an initial ruling in that direction was reversed on appeal. Still, for the purpose of calculating authorized levels of retaliation, it's the amount of trade damages found by the WTO that matters, not whether a subsidy is prohibited or "actionable" under WTO rules.

"The WTO has repeatedly found that Airbus is entirely a creature of government, and they must now bring themselves into compliance with the international laws or risk massive sanctions," Boeing's Luttig said.

Meanwhile, both sides are awaiting yet another decision, this one in the 2004 counter-complaint brought by the EU against U.S. support for Boeing through various means, such as Department of Defense, NASA, Washington state and Wichita, Kan., programs.

The WTO Appellate Body ruled in March 2012 that Boeing had received about $3 billion to $4 billion in actionable subsidies under the programs, down from the panel's original ruling of about $5.2 billion.

Six months later, the USTR informed the WTO that it had worked with the Department of Defense, NASA, Washington state and Wichita to comply fully with the ruling. The EU ask for a compliance panel to rule on the matter, just as the United States did after the EU said it had complied with the ruling against government support for Airbus.

"I have little faith in the U.S. compliance with the WTO rulings," Fabrice Bregier, president and CEO of Airbus' commercial division, said in a statement. "The 777X case shows total disrespect for the WTO, which already condemned the 787 subsidies as illegal. This will only encourage other aerospace producing countries to feel totally free to subsidize their local industries. Is this the competitive environment we want to work in?"

The WTO is expected to send both parties a confidential ruling by the end of the year, but the decision most likely won't become public until spring.

If the WTO rules that the United States has not fully complied, the EU could begin the process of seeking authorization to impose retaliation for any remaining subsidies.

However, U.S. officials are optimistic the WTO will rule largely in their favor, both in the compliance case and on the amount of trade retaliation the two sides could slap on each other if no negotiated settlement is reached.

"To date, the WTO has found that Airbus has already used $22 billion in illegal EU subsidies while finding against the U.S. on a single tax provision that wouldn't be applied until 2020, and that is worth less than $50 million a year according to Boeing," USTR spokesman McAlvanah said. "The U.S. government will continue to hold the EU to account for illegal, market distorting subsidies that have put American workers and businesses at a competitive disadvantage."

Back

Barletta in the running to be Trump's transportation secretary Back

By Rachael Bade | 11/28/2016 07:39 PM EDT

Rep. Lou Barletta is being considered for Donald Trump's Transportation Secretary, according to one source close to the president-elect's transition team.

The Pennsylvania Republican was an early Trump supporter and is now helping Trump fill out his Cabinet and identify top administration staff as part of the transition.

He will meet with Trump Tuesday. His office would not comment on his prospects for an appointment.

As a cardinal on the House Transportation Committee, Barletta, just elected to his fourth term, met Trump while overseeing his bid to turn the historic Beltway Post Office building into a ritzy hotel.

Barletta also invited Trump to speak on a December 2013 panel about public-private partnerships that he hosted as emergency management subcommittee chairman. Trump couldn't go, but sent his daughter Ivanka in his stead.

Over the course of Trump's presidential campaign, Barletta became a key member of the Trump Caucus, a group of core Hill supporters that tried to convince skeptical Republicans to back the real estate tycoon. He advised Trump on immigration and transportation issues, submitting policy pitches to the candidate's team.

As secretary of Transportation, Barletta would be tasked with implementing a key pillar of Trump's policy agenda: boosting infrastructure spending. The president-elect has said repeatedly that he wants to rebuild the nation's roads and bridges — a task that would fall under the Transportation Department's jurisdiction.

Back

Trump's early backers seize power in Congress Back

By Rachael Bade | 11/28/2016 05:15 AM EDT

Rep. Lou Barletta was at a hospital in mid-August helping his daughter get ready to give birth when he received a surprise call from a Donald Trump campaign aide.

The congressman, who ignored the advice of fellow Republicans when he endorsed Trump back in March, was wanted the next day at Trump Tower for a campaign meeting on national security. So off he went, hoping the baby would hold out until he returned.

Fast-forward a few months. The former mayor of Hazleton, Pennsylvania (pop. 25,000), just elected to his fourth term in the House, is helping the president-elect fill out his Cabinet and hire thousands of appointees. Barletta jokes that he can't make eye contact with his House colleagues because so many of them are seeking jobs in the Trump administration and know his pull could make all the difference.

Barletta is a member of Washington's newest and most exclusive club, a small band of Republican lawmakers who got behind Trump when their own party establishment had him pegged as a surefire general election loser, if he even managed to win the nomination. The few who were willing to endure the ridicule of other GOP lawmakers by placing their chips on Trump early have been vaulted from backbench obscurity to now arguably rivaling the influence of GOP congressional leaders.

They, more than the high-profile pols flocking to Trump since he won, have the ear of the president-elect. They are among a handful of gatekeepers to the soon-to-be most powerful man in the world.

"As the president-elect makes those Cabinet-level decisions, they cannot in New York be inundated with thousands of requests from people who want to serve somewhere in the Trump administration," said Barletta, 60, who first met Trump in 2015 as a subcommittee chairman overseeing his bid to turn Washington's historic Old Post Office building into a ritzy hotel.

"So we're taking that information, categorizing it, getting it in order, sending it to who it needs to be sent to," added Barletta, who cited Trump's tough-on-immigration stand when he embraced the real estate mogul in late March.

No one exemplifies the leap to relevance better than Rep. Chris Collins. On Feb. 24, the Republican from upstate New York became the first member of Congress to endorse Trump. (Alabama Sen. Jeff Sessions, Trump's nominee for attorney general, campaigned with Trump in August 2015 but didn't officially endorse until a few days after Collins.)

Collins, a longtime entrepreneur and businessman first elected to Congress in 2012, wasn't even sure Trump wanted his support given the candidate's anti-Washington platform. So Collins instructed his staff that month to reach out to the campaign to find out whether he should keep his endorsement low key, or play it up on national TV. A few hours later he was surprised to receive a voicemail from Trump thanking him for his support and encouraging him to go big. Anything Collins could do to win over other Washington insiders would be appreciated, Trump added.

Collins, to this day, has the message saved on his phone.

Collins soon set about to organize the early Trump backers. They dubbed themselves the "Trump Caucus."

It was, Collins said, a "pretty lonely group." There was Barletta, who advised Trump on immigration and transportation policy; Rep. Tom Marino (R-Pa.), who with Barletta helped Trump win the Pennsylvania primary in April, earning them the nicknames "thunder and lightning" from Trump's team; Rep. Duncan Hunter, a combative Californian who wrote op-eds touting Trump in his Democratic state; and Rep. Marsha Blackburn (R-Tenn.), an invaluable female surrogate who argued that Trump, despite his controversial comments about women, would implement policies important to mothers.

They met weekly and acted as what Collins called Trump's "chief salesmen" within the House Republican Conference — which responded, by and large, with a mix of dismissiveness and alarm.

Not so much anymore.

"As all these members are coming up to me, many of them seeking Cabinet-level positions, and a few agency heads, a couple ... undersecretary positions," Collins said. "We're floating [names] back to the campaign." When he feels particularly strongly about a person's qualifications, Collins said he'll "directly contact people like Jared Kushner," Trump's son-in-law, to give his blessing.

Another House member with a direct line to Trump's inner circle is Intelligence Committee Chairman Devin Nunes. The Californian wasn't an initial endorser, but early this year, he made a standing offer to brief any of the Republican presidential hopefuls on national security issues.

Trump's campaign took him up on it in March. From those meetings, Nunes grew close with retired Army Lt. Gen. Michael Flynn, a top Trump hand who has just been nominated to be the president-elect's national security adviser.

Since the election, Trump's camp has turned to Nunes for recommendations on filling national security posts. One of his suggested picks, Rep. Mike Pompeo (R-Kan.), was tapped for CIA director.

"Now that I'm on the [transition] executive committee, my phone is ringing off the hook from all over the country — people who know me are sending their résumés," said Nunes, who received a call from Trump just hours before the news about Pompeo dropped.

Some of the early Trump supporters are being mentioned for plum administration jobs. In May, Budget Committee Chairman Tom Price (R-Ga.) enlisted eight other committee chairmen to join him in making a joint endorsement of Trump. It made a big media splash, and Trump Caucus members say it was a huge boon for the candidate — the first sign that senior members of the House were coming around, despite GOP leadership's lukewarm response to the reality-TV star turned candidate.

Price has been floated for secretary of Health and Human Services.Rep. Jeb Hensarling (R-Texas), one of the other eight chairmen who endorsed Trump then, is being considered for Treasury secretary. Trump's team is also remaining in touch with other committee chairmen who helped craft his policy platforms, including Veterans Affairs Chairman Jeff Miller (R-Fla.).

Rep. Darrell Issa also likely earned Trump's enduring allegiance. The California congressman met Trump years ago through his good friend Phil Ruffin, who owns Treasure Island Casino in Las Vegas. Issa stood by Trump through the bruising general election, even as he was attacked relentlessly for it in his own, very competitive race. The longtime congressman signed on as a national security adviser to the campaign hours before the "Access Hollywood" video surfaced, but declined to back away. He went on to narrowly win his race.

At one Trump Caucus meeting over the summer, Issa whipped out his cellphone and called Trump directly, then put the candidate on speakerphone to talk with other members present. Sources say he, like many of the early Trump supporters, talks with Trump occasionally and is likely to remain a key ally in Congress.

As for Collins, these are easily the headiest days since he arrived in Washington four years ago.

On a recent episode of "The Late Show with Stephen Colbert," the host mocked Collins for defending Trump's Twitter habits. The 66-year-old lawmaker also seconded Trump's nomination at the Republican National Convention and over the course of the campaign did more than 150 media appearances defending Trump.

Tickled by the Colbert clip, Collins says it's proof he's "hit the big time." In fact, the morning after Trump won the election, he and his daughter Ivanka called Collins to discuss the next steps. Pre-empting any suggestion of an administration job as a reward for his help — Collins was repelled by the idea of 70-hour workweeks and moving his family to Washington — he said he wanted to serve as Trump's liaison to Congress.

Trump loved the idea. During a visit to Capitol Hill the next morning, he asked Speaker Paul Ryan to create the post. Ryan called Collins that night to say it was a done deal: He would be Trump's point man in Congress.

"Mr. Trump, I have come to find out, very much values loyalty," Collins said. "I didn't know that on Feb. 24, but I've come to know that. ... To know these people and have them on your speed dial is awesome, humbling."

Back

POLITICO Pro Q&A: California DMV Director Jean Shiomoto Back

By Tanya Snyder | 11/28/2016 05:04 AM EDT

California has been a leader in crafting state guidance for the testing and deployment of driverless cars, leading to some friction with the federal government and the auto industry.

The state DMV adopted rules for testing, but not deploying, self-driving cars in 2014. Draft regulations on deployment languished while the state waited for the federal government to act — which it did Sept. 20, with NHTSA's release of its guidance on automated vehicles. Ten days later, California released a revision of its state policy and has been soliciting comment on it.

The reaction has been mixed. The auto lobby would prefer that states stay out of the business of regulating anything but licensing, registration and insurance. The biggest complaint has been California's attempt to require a 15-point safety assessment that NHTSA intended to be voluntary. But industry officials were also alarmed by some data-sharing provisions and reporting requirements.

POLITICO talked to Jean Shiomoto, director of the California DMV, to find out more about how federal guidance looks from ground zero of the burgeoning industry. It's the first in a series of conversations with officials leading the way on regulating autonomous vehicles at the state level.

The transcript, which includes occasional comments from Bernard Soriano, a DMV deputy director, has been edited for length and clarity.

Did California start its own regulations because there was a void at the federal level, or do you think this is a state responsibility?

We were given this responsibility because of legislation passed in California in 2012 — it was Senate Bill 1298 that gave us that responsibility. That was because technology was being developed in California. It was just coming on the scene. It wasn't on a lot of people's radar. There wasn't a void.

Is there anything in the model state policy you think should be established at the federal level instead of in state regulation?

NHTSA lays out a framework for states to follow to get away from a concern of a patchwork of 50 states having different approaches to autonomous vehicles. That's what the manufacturers were asking for.

California is out front on this — you and Michigan and a handful of other states. Do you feel like a lot of eyes are on you?

[The American Association of Motor Vehicle Administrators] put together an autonomous vehicle work group, and it has representation from 14 jurisdictions in the United States, and also representation from Canada and from law enforcement. A lot of states are active in pursuing autonomous vehicle technology in their states.

We do share all our information on our website. Our testing regulations are on our website; our draft regulations are there. Comments that have been received from public hearings are there. We have copies of accident reports and disengagement reports from manufacturers and developers that have testing permits. States do call us and we share our experience so they don't have to reinvent wheel.

You require compliance with NHTSA's voluntary safety assessment, which some manufacturers complain essentially makes it mandatory. Would you prefer that NHTSA just flat out require it? Or is there some other way that you anticipate ameliorating those concerns?

Bernard Soriano, DMV deputy director: Our interest is making sure that what's enacted in California statute comes to fruition. That means we needed to develop the regulations to allow for testing and deployment of autonomous vehicles on California's roadways. The statute also requires us to be responsible for the safety of those vehicles. With the federal guidelines, those assurances are there.

Shiomoto: We don't have to require anything of the manufacturers. They meet the 15-point assessment through NHTSA, and then what we are just asking for is a copy of the letter.

Yes, but NHTSA doesn't require that, but you do.

Soriano: NHTSA's interest is in ensuring that the vehicles are safe on the roadways. They're going through the process now of refining how that will work. Developing regulations at the federal level is a lengthy process; the technology changes on a pace that's much more rapid.

Shiomoto: Also, the manufacturers have a very long relationship with NHTSA, and so the manufacturers know how NHTSA operates and NHTSA knows how the manufacturers operate. NHTSA has more expertise at that than we do, and so we do welcome that manufacturers have to work with NHTSA in providing that information, and we're just asking that they provide that 15-point assessment letter to the DMV.

Would you advocate for NHTSA to simply require it at their level so there's no conflict between the federal government and the state about whether it's required or voluntary?

Shiomoto: What we have put out is a draft. Based on the comments that we receive and the comments that NHTSA receives, we'll talk. There could be changes. They're going to review and update the policy every year.

Soriano: To require something means that it needs to be in regulation. And regulation takes a lengthy amount of time. So what's available to NHTSA is to be able to publish policies, which have some limitations in terms of making it a requirement.

NHTSA has contemplated requesting pre-market approval authority. Would that help you? Would you contemplate setting up a regime where the state certifies cars before they're deployed or put to market?

No, we would not do that.

There has been concern about municipal laws. Are you encouraging municipalities to set their own laws and regulations? If they do, would those regulations trump the state regulations?

No, we're not encouraging that. We're getting a lot of comments on that, so we're going to revisit that and talk to local governments about it.

There have also been concerns about data sharing and intellectual property.

We're not asking for intellectual property or data sharing. That's not part of our purview.

You are asking for shared crash reports.

If there's a crash, they need to submit a report to us within 10 days, and we require a report of disengagements, and it goes on our website. The data sharing is what NHTSA is asking for; that's in the federal policy.

Manufacturers complain that the requirement to submit an annual report creates a yearlong waiting period between testing and deployment. Is that something you'll go back and work on?

It's premature for us to say exactly what we'll change, because we're still receiving comments.

Back

POLITICO Pro Q&A: Michigan DOT Director Kirk Steudle Back

By Tanya Snyder | 11/29/2016 05:00 AM EDT

When Michigan lawmakers jumped into the fray of driverless car regulation, they did so as an explicit rejection of the approach California was beginning to take.

Michigan and California — home to the auto industry and the tech industry, respectively — have very different attitudes toward the testing and deployment of driverless cars. While California wants to keep a close eye on it, Michigan's message to developers is: Have at it.

Just after the election, the Michigan Legislature passed bills allowing self-driving cars to be tested on the state's roads without a driver inside — an unusual move among states that have taken action setting rules around autonomous vehicle technology — and allows for full deployment, not just testing, of self-driving cars. The legislation also allows the "platooning" of trucks traveling closely together at a uniform speed. It also assigns liability for crashes and malfunctions, sets up a test facility for driverless cars at an old GM plant and authorizes shared fleets of on-demand autonomous vehicles.

As the second installment in our series of Q&As with state officials taking the lead on regulating driverless car technology, POLITICO talked to Michigan DOT Director Kirk Steudle, an enthusiastic backer of these bills.

This transcript has been edited for length and clarity.

NHTSA's guidance is intended to avoid a "patchwork" of state policies. Michigan's guidance doesn't conflict with NHTSA's but it does conflict with California's, for example. Is some amount of diversity okay among states, or ideally should states pass more or less identical guidance?

I think in the end states are going to come together to pass something that's similar. The DMV folks have a working group where they're trying to pull the states all into conversation. The thinking of the whole group is closer to what Michigan has and what NHTSA has than what California has.

We actually did not like the way that California went. We thought it was way too prescriptive and way too overbearing of government, and we said there needs to be another option on the table — which is the reason we pushed forward with our own legislation, even knowing NHTSA was coming up with some model legislation, and frankly, in an attempt to maybe influence NHTSA as well, saying look, we don't believe the California model is the way to go; we don't think it was right.

So you specifically wanted to get out in front because you wanted to counteract what California was proposing.

We felt there needed to be another option than just what California had proposed because we didn't feel the California approach was correct. We prefer the current method of safety approvals, done through the self-certification process through NHTSA as opposed to the prescriptive process that California law laid out, which put a third-party certifier in the middle. That fundamentally changes the liability for manufacturers; you've moved it off onto somebody else. We just think it clouds the liability issue unnecessarily.

If you're a manufacturer and you can say, "Hey, I can give it to Joe Smith at ABC company and he'll certify it for me and I've just transferred all the liability," who wouldn't want that? But I don't think it makes sense from a public policy perspective to do that.

And if you're the people that own ABC certifying company, imagine the liability insurance you're going to have to have. Your approach is going to be so bureaucratic and slow. Just think of the FDA, right? How long does it take to get a new drug approval? Now it'll be: How long will it take to get a new upgrade of the software approved on a vehicle? Until you know everything is perfect and you've already had 10 billion miles on it, then it's finally, "OK, go ahead and use it." I just think that's trouble. It's going to get in the way. It's going to create barriers.

But doesn't it also provide some consumer guarantee of safety?

How many years of automobile safety have we had under the current model? Other than the airbag issue with Takata, we hold manufacturers accountable for problems. Just because there's a third-party person involved doesn't mean that's still not going to happen.

Is there anything in the final document or the model state policy you would encourage NHTSA to change?

We're in agreement with most of it. There's a couple little things, like the data developers are supposed to provide to the states. That's data we don't want. The government shouldn't have some of that data.

You don't want it?

Yeah, why do we need it? Once it's presented to the government it's a public document, it's a FOIA-able document. There's information that should stay with individual makers of manufactured goods, as opposed to being shared, so their competitors can find out what they're working on.

There are lots of big, thorny issues being left to the states to figure out and states could theoretically figure them out in different ways.

Right. Think about insurance. Insurance right now is the state's responsibility and it's not the same across the country. I think federal agencies could help pull together law enforcement from the state and local level to have a summit or a conversation about what makes good model policy. Because I think you could very easily have jurisdictions that could take different approaches on how they enforce regulations on an autonomous vehicle. Maybe on the insurance side as well, the federal government could begin to broker those conversations.

Self-certification of NHTSA's 15-point safety assessment is voluntary. Do you think NHTSA should require that?

I think the way that checklist is going to evolve is, it starts with this 15-point checklist and I think the auto manufacturers will all come together and say, "Yes, this is the checklist we'll all live by," and they'll probably have some conversations back and forth about what works and what doesn't work, and then in the end I'd bet that, ultimately, NHTSA will say, "OK, these are requirements." And it probably looks like it does now, with some modifications.

And then they'll put that into regulation?

I think so. I think it gets there eventually.

And do you think there's any rush to get there? Or is voluntary guidance a place where you can operate for a good number of years?

I think that's the appropriate place to be right now. Because I don't think there's anybody anywhere that has the total, complete knowledge and understanding of this technology and its deployment. I think it has to be a coordinated effort where they learn and adjust along the way.

Is there anything Congress could do that would make this easier for your state?

I don't think so, other than the encouragement to keep advancing the technology. The safety benefits are significant, and the sooner we get there the better. The more barriers they can remove, I think is the best.

Michigan has been on the vanguard of setting policy around autonomous cars. Do you feel like you are sort of setting model state policy yourself?

Well, that's what we intended to do. To the extent states find value in what we've done and agree, we'd take that as a compliment.

Obviously there's a value to being first, but some states might find that there's a value to being tenth and letting you take the fall for any problems that come up early on and learning from you.

When it came to making cars, I'm glad that Michigan didn't decide to be tenth. There's a good reason why I think Michigan needs to lead on this. It's the auto state.

And I think there are probably states that are perfectly fine to be last. They said, "OK, when you've sorted this out and ironed out all the bugs, then we'll just come along."

Can Michigan municipalities create their own laws on this? And how would that work in conjunction with state and federal guidance?

If the Legislature says autonomous vehicles are allowed on all roads in the state of Michigan at any time, then they're allowed on all roads. And that's what legislature said. So there isn't a place for a local unit of government to say, "Well, except they can't be here; you can't bring that car out on Main Street." How they would influence that is for their state representative to bring an issue back to the legislature to have them deal with some issue that's popping up in their particular district.

One thing that is under local control in Michigan is land use planning. Cities are looking at the impacts of automated vehicles in terms of parking. It could alleviate a lot of parking issues. And there are still a lot of questions. Is it going to be a shared model? Is it going to be an individual ownership model? In my mind, some of that comes back to what type of energy it runs on, and what's the cost of it, and then parking rates — think about it this way: I've got my own autonomous car that drives me to work; I commute in 20 miles, it drops me off and it costs me three dollars in electricity. If I don't want anybody else to use it, but it's going to cost me $20 to have it parked for the day, I just send it home and tell it to pick me up at 3:30 and that costs me $6 instead of $20.

So at the local level, the policy discussion about the cost of parking will drive that, as will the cost of the vehicle itself. If the vehicle costs $100,000, well, there's going to be lots of sharing going on. If the vehicle costs $18,000, you might want two.

And all these people that own all this valuable property for downtown parking ramps, they're not going to like it. And I was on panel with a guy from San Francisco who said one of the things they're worried about is the bonds that they've sold based on parking revenue. All that revenue goes away if it's a shared use model.

At the DOT you're looking at infrastructure changes that will be necessary with driverless cars. What are the changes you're making?

When we reconstruct a freeway, we make sure it's got fiber optics buried in the conduit, or at least has the conduit under it, so in the future we've got easy accessibility to handle information flow if that's what's needed. That's the first piece. The other piece is, as we reconstruct for the long term -- this one is a little further out -- but right now the standard is 12-foot-wide lanes, but the average car is six feet wide. So you have three feet on each side. At some point in time, when you have all automated cars, particularly on a freeway, it's very likely you can squeeze them together. So you take the space that you normally have for a three-lane freeway and you probably legitimately can get four lanes on it.

And at that point there's no need for paint lines, and there's no need for signs, because signs and paint lines provide information to the driver. Well, the driver doesn't need it.

Well, there's still pedestrians and bicyclists.

Yes, on a surface road you'll always have a street sign for a bicyclist or a pedestrian. But not on a freeway.

But that's when everything on it is automated. It's going to take 20 years until every vehicle on a highway is automated.

You think within 20 years every vehicle on the highway will be automated?

I think part of the uptick will be through aftermarket devices, whether they come through cell phones or individual little units. Once the technology is out there, there will be a portion of the general public that says, "I'm not ready for new car yet, but I want this latest safety feature." And then the vehicle fleet turns over every 12 to 13 years. So if you added another seven years on top of that you're at about 20. That's if it started today.

In my mind, we're in for a rough 20-year period of messy transition between really smart cars and cars that have dumb drivers.

Back

OECD bullish on Trump's tax, infrastructure proposals Back

By Toby Eckert | 11/28/2016 09:16 AM EDT

President-elect Donald Trump's proposed tax cuts, combined with his infrastructure investment plan, would boost U.S. and global economic growth over the next two years, the Organization for Economic Cooperation and Development said in a report released today.

"The new Administration will begin implementing its policy priorities next year and in this context the fiscal stance is projected to become more expansionary as public spending and investment rise, while taxes are cut. This will provide a boost to the economy, particularly in 2018," the OECD said in its latest Global Economic Outlook.

Overall, the report estimated U.S. economic growth would hit 2.3 percent in 2017 and 3 percent in 2018. Global economic growth would be 3.3 percent in 2017 and 3.6 percent in 2018.

Catherine Mann, the OECD's chief economist, told the Financial Times that the the possible benefits of Trump's proposals are "an important part of our projection. We don't think anything will happen over the next six months, but we expect [a stimulus worth] 0.25 to 0.5 per cent of national income in the second half of 2017, mostly spent on public infrastructure and 1 per cent or so in 2018 coming from tax cuts."

Trump has proposed a tax reform plan that includes deep cuts in business and individual tax rates. He also wants to invest up to $1 trillion on infrastructure.

Despite the OECD's optimism, it warned the benefits of Trump's tax and infrastructure policies would be squelched if he pursues a protectionist trade policy.

Back