New Dawn for U.S. DOT under Biden

The U.S. DOT and the National Highway Traffic Safety Administration need a reset and a new business model. The arrival of the Biden Administration in January offers reason for hope for renewed regulatory vision and the political will to save lives.

At this time, one year ago, current U.S. Department of Transportation Secretary Elaine Chao was preparing her remarks to be shared at the upcoming Consumer Electronics Show in Las Vegas. Chao was standing in for General Motors CEO Mary Barra who had been sidelined by a United Auto Workers strike and delays in the company’s plan to announce an electric pickup truck and a new automated robotaxi.

Barra will be back to keynote virtual CES 2021 with plenty to talk about. Ms. Chao, happily, will not.

The incoming Biden Administration has already made the splashy announcement of former presidential candidate Pete Buttigieg as the nominee to replace Chao. Buttigieg will arrive with a broad previously stated agenda targeting a $1T dollar investment in U.S. infrastructure. The details from his pre-pandemic platform include:

• $100B to establish a fund to address lead in water, paint and soil
• $150B to improve public transportation, including $100B for states and cities to repair existing systems and expand their rail and bus services, and $12B for rural public transit
• $80B to a school repair program, allocating grants and loans to states based on poverty levels
• $80B to expand internet access to unserved and underserved communities
• $165B into the Highway Trust Fund to ensure its solvency through 2029

This is not to say that Buttigieg’s platform is perfectly aligned with Biden’s priorities. They do suggest a vision for taking on the infrastructure challenges facing the country.

In contrast, Chao’s legacy will be one of championing deregulation and further eroding the influence and credibility of the U.S. DOT generally and the NHTSA, in particular. Legacy-wise, Chao topped her deregulation agenda with evidence of favoritism for interests connected to her husband’s, Senator Mitch McConnell’s, home state of Kentucky and for her father’s shipping company – both topics now the subjects of lawsuits. In mid-2020, the Trump Administration replaced the Inspector General that had announced investigations into Chao’s suspected favoritism.

Reputationally, the U.S. DOT under Chao presided over the Boeing 737 MAX debacle. One year ago, in the midst of the ongoing scandal, which implicated a rigged Federal Aviation Administration approval process, Chao released a statement that she had signed a “rule on rules” ensuring the department’s regulations aren’t "too complicated, out of date, or contradictory." The new Transportation Department action formalized a Trump administration requirement that for each regulatory step a department takes, it must undertake two deregulatory moves.

It appeared that the lesson that Chao took from the 737 MAX debacle was that the U.S. transportation sector needed less regulation, not more. At the time of the “rules on rules” announcement, Chao’s DOT was quoted claiming that it had exceeded its own standard, establishing a ratio of 23 deregulatory steps for each regulatory initiative – estimating unspecified resulting industry savings of $3.7B. (The agency provided no details regarding the source of these savings or industries impacted.)

Of course, the claim of a $3.7B contribution to industry savings from reduced regulatory oversight must be considered in the context of the $3.7B earnings hit Boeing took from the 737 MAX affair, to which $5B in victim compensation and liability were later added.

The automotive industry received even less attention from Chao. The NHTSA never had a full-time administrator during the Trump Administration. It is currently led by Deputy Administrator James Owens.

Much was left undone under Chao’s leadership of the U.S. DOT. The agency failed to make any progress toward the assessment or adoption of any automotive active safety system technologies – though voluntary implementation of automatic emergency braking systems initiated under the last Administrator of NHTSA, Mark Rosekind, have proceeded apace.

In her CES 2020 keynote, Chao presented her vision of AV 4.0 – the fourth generation of the agency’s failure to define or execute on a national automated vehicle vision or strategy. Chao outlined three principals to guide government agencies and developers as they pursue automated driving:

#1 Protect Users and Communities. 

1. Prioritize safety.  Safety is always #1 at the U.S. DOT.
2. Emphasize security and cybersecurity.
3. Ensure privacy and data security.
4. Enhance mobility and accessibility.

#2 Promote Efficient Markets. 

1. Remaining Technology Neutral.
2. Protecting American Innovation and Creativity – by protecting intellectual property.
3. Modernizing Regulations.

#3 Facilitate Coordinated Efforts.

1. Promote Consistent Standards and Policies
2. Ensure a Consistent Federal Approach
3. Improve Transportation System-Level Effects

None of these eloquently expressed principals or objectives produced any tangible results. History will record that nearly 150,000 Americans perished in crashes on U.S. highways under Chao’s watch. The agency noted last week that 36,096 died in 2019, a 2% improvement on the 36,835 killed in fatal crashes in the U.S. in 2018. A reminder: that is 100 fatalities/day.

It’s clear that the U.S. will not de-regulate its way to saving lives on U.S. highways. It’s worth noting that NHTSA was created during the Nixon Administration and airbags were mandated during Reagan’s Administration – though Reagan famously defunded NHTSA. This might suggest that automotive safety and regulation were actually Republican Party values and priorities. Not under Trump.

The automotive industry is desperately in need of direction and vision regarding both electrification and driving automation. The incoming Biden Administration has already made clear its prioritization of climate-related policy and the importance of infrastructure. The Trump Administration threw a lot of words at automation, but lacked any particular vision. Trump had little or no regard for electrification or fuel efficiency – a priority of the Environmental Protection Agency – another demoralized, defunded, and deconstructed agency under Trump.

Chao’s CES 2020 keynote identified government’s cross-agency interest in vehicular automation – including cars, trucks, and drones. The challenge for 2021 and beyond is to identify the public’s interest at the state and city level with the goal of defining a meaningful vision for putting automation to work as an element of economic leadership. We will not de-regulate our way to that leadership.

The Biden Administration will be taking over a U.S. DOT and NHTSA that are broken, defunded, and demoralized. It may take nothing less than a reconsideration of the fundamental underpinnings of the agency and a partial privatization of its mission. The task of guiding active safety system development and deployment is beyond the resources of the agency as it currently stands.

It’s time for new thinking. The creation of a vaccine for the COVID-19 coronavirus in less than a year ought to be inspiration for accelerating standard-setting and the forumulation of a regulatory vision for such promising life-saving automotive technologies as driver monitoring, blindspot detection, lane keeping, and cross-traffic warnings. We have the technology. We lacked only the regulatory vision and the political will, until now.