Obama Taps LaHood for Transportation Secretary

Dec. 17, 2008— -- President-elect Barack Obama is expected to announce Illinois Republican Rep. Ray LaHood as his choice to become the next secretary of transportation, ABC News Chief Washington Correspondent George Stephanopoulos reports.

If confirmed by the Senate, the Illinois lawmaker will replace Transportation Secretary Mary E. Peters in overseeing the Department of Transportation and its key agencies, including the Federal Aviation Administration (FAA) and the National Highway Traffic Safety Administration (NHTSA).

LaHood is the first registered Republican who would be joining the Obama administration, and just the second non-Democrat. Obama has tapped current Defense Secretary Robert Gates, a registered Independent who considers himself a Republican, to stay on in his current position.

On Wednesday, Republicans were already reacting to the choice.

"Ray LaHood is a good friend, a solid member of our congressional delegation, and would make a fine addition to any administration," said Illinois Republican Party Chairman Andy McKenna in a statement.

The new transportation secretary will play a critical role in getting a stimulus package up and running. Creating jobs and rebuilding the nation's infrastructure is just one of the challenges the incoming secretary faces, and there are a number of nasty labor issues that have been stewing beneath the surface that will need to be addressed.

In early December, Obama vowed that his administration would invest in transportation.

"We will create millions of jobs by making the single largest new investments in our national infrastructure," Obama said.

On Wednesday, a long-time Democrat and a former transportation official in the Clinton administration told ABC News that many Democrats are "greatly disappointed" by the pick.

"LaHood is a decent guy, but Democrats were anxiously looking for a Democrat to be in this position because it is a choke point for much of the economic stimulus package," he said.

On the other side, another Democrat and former DOT official said, "LaHood is a huge consensus builder and has a great reputation on the Hill. He is very popular with staff and with members. People see him as a smart guy and someone who understands the needs of both rural and urban America."

Obama has not yet decided who will replace acting administrator Robert Sturgell at the high-profile Federal Aviation Administration.

Until the new administration takes office, Peters has vowed to make the transition a smooth ride.

"My goal is clear," Peters said in a statement shortly after the election. "On Jan. 20, give the next Administration a transportation system that is safe, that is innovative and that is helping move our American economy. I am counting on all of our employees to help in that effort, as well as the transition process."

Upcoming Transportation Priorities

Upon taking the helm at DOT, LaHood would immediately confront several critical issues. The DOT inspector general's office issued its yearly report on Nov. 17, in which it stressed top challenges for the year ahead. Issues of runway safety, airline inspections, air traffic controller training and bridge and tunnel safety all made that list.

"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.

The Struggling Airline Business

This year the airlines imposed a host of new fees on travelers, relying on their customers to help them survive high oil prices. Though oil prices are down, the carriers have not removed the fees for everything from a second checked bag to a soda in flight. In the face of a struggling airline business, mergers are expected to be less likely in an Obama administration than they were under Bush. Obama has also said he will limit foreign ownership of U.S. airlines, a move labor groups fear could mean a loss of jobs.

Fuel Efficient Vehicles

With consumers shifting to smaller cars and trying to cut spending in the tight economy, making cars and trucks more fuel efficient is also expected to remain a top priority in the years ahead. For passenger cars, Peters has proposed increasing required fuel economy standards to 35.7 miles per gallon by 2015. For light trucks, DOT has proposed increasing fuel economy to 28.6 miles per gallon in the same period. Peters has also proposed incentives for companies that go above and beyond the Corporate Average Fuel Economy, known as CAFE standards. Obama has said it is one of his goals to put 1 million plug-in hybrid vehicles on road by 2015.

FAA's Airline Inspections

The agency that oversees the airlines came under fire this year when maintenance lapses at Southwest Airlines sparked a series of questions about how the FAA inspects the airlines to ensure they're safe for travelers. Ensuring the FAA does not get too cozy with the industry it regulates will continue to be a challenge for the next administration.

Congestion in the Skies

To reduce congestion in air travel, the Department of Transportation has plans to auction slots at New York-area airports, a hub where many of the country's delays originate. The plan for a slot auction is likely to face tough challenges under an Obama administration. The Bush administration has also pushed congestion pricing, a model through which people pay more to travel during peak hours to try to discourage travel during the busiest times.

Number of DOT Positions for Political Appointees

There are 105 political positions up for grabs at the Department of Transportation, 10 of which are at the FAA. Of the 10 political positions at the FAA, the top two are the FAA administrator and the deputy administrator.

At NHTSA, there are five political appointees, including the administrator, the deputy administrator, head of government affairs, head public affairs, and chief counsel.

ABC News' Sunlen Miller and George Stephanopoulos contributed to this report.