(Adds confirmation from Trump transition team, Chao statement)
By David Shepardson
WASHINGTON, Nov 29 (Reuters) - President-elect Donald Trump said on Tuesday he plans to nominate former Labor Secretary Elaine Chao to head the Transportation Department as he plans to push for $1 trillion in new infrastructure spending to fix U.S. roads, airports, water systems and bridges.
Chao, the wife of Republican Senate Majority Leader Mitch McConnell, served as labor secretary under President George W. Bush and was the first Asian-American woman to hold a Cabinet position.
"Secretary Chao's extensive record of strong leadership and her expertise are invaluable assets in our mission to rebuild our infrastructure in a fiscally responsible manner," Trump said in a statement.
Although Trump spoke on the campaign trail about wanting to "drain the swamp" in Washington, more than half of Trump's nine key appointments so far have been accomplished Washington insiders, such as Chao.
Chao will take a leading role in Trump's plans to rebuild U.S. infrastructure. Trump has called for $1 trillion in infrastructure spending over 10 years, but it is unclear how much of the funding would come from the federal budget.
Trump said during the campaign he would "create thousands of new jobs in construction, steel manufacturing, and other sectors to build the transportation, water, telecommunications and energy infrastructure needed to enable new economic development in the U.S."
"The President-elect has outlined a clear vision to transform our country's infrastructure, accelerate economic growth and productivity, and create good paying jobs across the country," said Chao in a statement.
Chao will face a number of big decisions at the agency that regulates the nation's vehicles, airplanes, railroads, pipelines, ports and highways - including how to proceed on self-driving cars on U.S. roads, the use of small unmanned aerial vehicles, or drones, over people and whether U.S. fuel efficiency standards should be revised.
There are dozens of other pending regulatory issues the next administration will face, including railroad safety and staffing rules, requiring event data recorders in all U.S. vehicles and whether to set rules for airlines requiring they give more passengers with disabilities seats with extra leg room and whether to ban or restrict phone calls made on personal phones on U.S. flights.
Mitch Bainwol, chief executive of the Alliance of Automobile Manufacturers, a trade group that has urged the Trump administration to conduct a sweeping review of auto regulations, praised Chao as a "superb choice."
He said the next administration will make important decisions on self-driving cars and how to maximize "the rate of innovation in the technologies that save lives, avoid crashes and improve fuel economy."
Former U.S. House Speaker Newt Gingrich praised Chao's expected nomination. She will be a "great Secretary of Transportation. She really understands the federal government-can lead rebuilding our infrastructure," he wrote on Twitter.
House Democratic leader Nancy Pelosi said Democrats want to work with Chao on fixing infrastructure but "will not allow Republicans to use an infrastructure bill as a Trojan horse for undermining workers' wages and handing massive tax breaks to big corporations."
Chao is a former deputy transportation secretary and sits on the boards of Wells Fargo & Co, Ingersoll-Rand Co , News Corp and Vulcan Materials Co.
A Chinese immigrant, Chao arrived in the United States at age 8. Her father, James S.C. Chao, is founder of the Foremost Group, an international shipping company. (Reporting by David Shepardson; Editing by Jonathan Oatis and Dan Grebler)