Obama Taps LaHood for Transportation Secretary

"The Department faces these challenges in an environment of uncertain financial markets, volatile fuel prices, rising deficits and a softening economy," Inspector General Calvin Scovel wrote in the report. "These factors will impact all modes of transportation and require a careful reassessment of how Federal agencies do business and manage investment portfolios."

Chief among DOT's priorities are:

Money for Infrastructure Improvements
The nation's roads and bridges are in dire need of upgrades. President-elect Obama has said, "We'll also invest in our ports, roads and high-speed rails -- because I don't want to see the fastest train in the world built halfway around the world in Shanghai, I want to see it built right here in the United States of America."

In September, President Bush signed into law a measure to pour $8 billion into the nearly broke Highway Trust Fund. The money for the fund comes mostly from a gas tax, but with Americans driving less, the amount coming into it is diminishing. On Nov. 19, Peters said the revenue in the Highway Trust Fund fell $3 billion just this year and reiterated her call for a new way to generate money for infrastructure projects.

The rail system also needs an upgrade. Amtrak train ridership has soared this year, and incoming Vice President Joe Biden is an Amtrak proponent, having long ridden the northeast corridor route between Washington, D.C. and his home in Wilmington, Del. On Nov. 14, Amtrak CEO Alex Kummant announced his resignation, signaling more changes ahead for the railways.

A Bill to Reauthorize the FAA
At the same time, the air traffic control system's technology is sorely outdated. Many say the antiquated system is a factor in flight delays. But a bill to reauthorize the FAA and direct new funding for those improvements has been stalled in Congress. The measure expired in 2007 and the FAA has been running on temporary extensions since. Obama has said he will work with Congress to modernize the air traffic control system.

A New Era in Air Traffic Control
Meantime, air traffic controllers hired under President Ronald Reagan are retiring, leaving a gap officials are quickly trying to fill. While scrambling to hire and train new controllers, the controller's union is also locked in a contract fight with the FAA. In 2006, Obama introduced a bill that supported air traffic controllers in their negotiations with the FAA.

Some also worry controllers new to the job could make potentially catastrophic mistakes. While aviation has been remarkably safe in recent years, the No. 1 one concern in the aviation community remains a runway incursion. The FAA has taken steps during the past two years to begin to address the issue.

"One of the most pressing issues at DOT is labor peace with [the National Air Traffic Controller's Association]," a former transportation official told ABC News on Wednesday, explaining there is concern about whether LaHood would make that a top priority.

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