Four months into his new position as secretary of transportation, Ray LaHood has a great deal on his plate. As well as overseeing 55,000 employees and a $70 billion budget, he's in charge of $48 billion in stimulus funds directed to his department by the Economic Recovery and Reinvestment Act and is gearing up for the reauthorization of the massive, six-year "highway bill" that funds transportation projects. The former congressman from Illinois sat down with U.S. News to talk about the administration's priorities, high-speed rail, and where all that money will come from. Excerpts:

Given everything that is going on right now, is this a watershed moment for transportation?



I think the term really is "transformational." The things we have in our part of the economic recovery are not just highways and bridges. It's transit. It's airports. It's $8 billion for high-speed rail. And I also think it's some opportunities that we have to promote livable communities. You've spoken about drawing on the Portland, Ore., model of transportation as a "livable community" that emphasizes public transit and walking and biking paths. But is it exportable to all kinds of cities, even the largest?



I think it can be replicated in some cities. I also think you can replicate parts of it in neighborhoods in cities. Chicago is so spread out and so big, but you could connect neighborhoods, perhaps with light rail. And they've been connected by "rails to trails." So much of why we haven't done these things yet seems to stem from a culture of driving in America. Is that really changeable?



We've spent three decades building an interstate system. We've put almost all of our resources into the interstate system. This is a transformational president, and the department is following the president's lead. People haven't really been thinking about these things. They have been thinking about how to build roads, how to build interstates, how to build bridges. People now are thinking differently about where they want to live, how they want to live, and how they want to be able to get around their communities. What is the administration's biggest priority for the reauthorization of the so-called highway bill in the fall, which will fund transportation projects for the next six years?



The Highway Trust Fund, we think by August, is going to probably be in some serious need of plussing up. People have lots of ideas about all of the things that they want to do, and we have lots of ideas, and we know that the Highway Trust Fund is just not going to be adequate enough to do all the things that everybody wants to do. So we're thinking about an infrastructure bank that could fund some projects of national prominence. What about raising the gas tax?



We're not talking about raising the gas tax. With hard economic times, with so many people out of work, the last thing we really want to be proposing is raising the gas tax. Still, Obama's stricter emissions regulations will mean people will be spending less money on gas.



Those standards really don't take ef-fect until 2012 in the executive order that the president signed and 2016 in the announcement that the presi-dent made at the White House. At that point, hopefully, the economy is going to be in much better shape, and there will be opportunities for us to find other ways to fund the things that we want to do. How would a national infrastructure bank avoid competing with other sources of funding?



You would allow the states—and you could even do it at the federal level—to sell bonds. Then you could [set aside money for] projects of a state or of a national significance. You would know that it was going to the big stuff, the big projects. It's been tried in some states, and it works, and you can generate a lot of money. For metropolitan transportation, one challenge has been that funding flows through states, which haven't historically prioritized cities. Is this a problem?

I talked to a number of mayors during the time that we were working on the economic recovery [act], and I know that they were concerned that money was going to go through the states. But what's happened is they've worked with the states, and they've been able to get a pretty good chunk of money to fix up roads. So you're not considering changing the way funding works systematically?



I think the thing that the mayors would really like to see changed is the metropolitan planning organizations, the MPOs. The mayors would like it if they would be much more broad-based—rather than just in a metropolitan area, that they take in a much larger area. I think that's the kind of reform that they're going to try to get into the highway bill. If they can convince the transportation committee to change, that's something that I think needs reform. The American Society of Civil Engineers has given U.S. infrastructure a D. Would you agree?



I would agree with them for last year. But I think when the grades come out after our economic recovery plan is implemented and after we move beyond that with the Highway Trust Fund, we'll get a good grade. Look, there hasn't been a lot of attention paid to infrastructure over the last eight years. There's been more attention paid to it in the last hundred days than there has in a long time. So a D probably is a good reflection of the past. I hope it's an A a year from now. How far can $13 billion for high-speed rail—$8 billion in the stimulus, $5 billion in the budget over five years—really go? The San Francisco-to-Los Angeles line alone is projected to cost more than $30 billion.



When you look back when the interstate bill was signed, I'm sure people were saying, "Well, where are we going to get the money for it?" And I guarantee you this, all of the lines weren't on the maps. Three decades later, we have an interstate system that's a model for the world, built with Highway Trust Fund money. Eight billion dollars is a lot of money. It will help jump-start opportunities all over America. You know what? It's an excellent start. What have the biggest obstacles been, historically, to the United States having a top-notch infrastructure?



Only the will to do things. Infrastructure isn't usually seen as a "sexy" topic. How do you get the public engaged in transportation issues?