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A $53 Billion High-Speed Rail Program to Nowhere

Posted by Ken Orski on Tuesday, February 8th, 2011
Innovation NewsBriefs Vol. 22, No. 5 Vice President Joe Biden announced today a plan to spend $53 billion over the next six years on passenger high-speed rail projects that will help reach the goal of giving 80 percent of Americans access to high-speed rail within 25 years. According to the announcement, the proposal will place high-speed rail “on equal footing with other surface transportation programs.” The initiative includes $8 billion in the President’s FY 2012 budget proposal, of which $4 billion will be focused on building new infrastructure and $4 billion will be dedicated to system preservation and renewal. The announcement makes no mention how the plan will be paid for. Congressional reaction to the announcement was immediate. House Transportation Committee Chairman John Mica (R-FL) and Railroads Subcommittee Chairman Bill Shuster (R-PA) issued a press release expressing “extreme reservations” regarding the Administration’s plan. Several congressional sources we reached for comment pronounced the Administration initiative “dead on arrival.” “What the Administration touted as high-speed rail ended up as embarrassing snail-speed trains to nowhere,” Mica said. “Rather than focusing on the Northeast Corridor, the most congested corridor in the nation…the Administration continues to squander limited taxpayer dollars on marginal projects,” Mica added. “This is like giving Bernie Madoff another chance at handling your investment portfolio.” Rep. Shuster was equally critical. “The Administration continues to fail in attracting private investment, capital and the experience to properly develop and cost-effectively operate true high-speed rail,” he said. “Government won’t develop American high-speed rail. Private investment and a competitive market will.” Shuster was also critical of the manner in which the Administration has administered the program. “Selecting routes behind closed doors runs counter to the Administration’s pledges of transparency. … High-speed rail funding could become another political grab bag for the President. …If the Obama Administration is serious about high-speed rail, they should stop throwing money at projects in the same failed manner.” The strong condemnation by two leading congressional transportation spokesmen poses a serious obstacle for the Administration’s proposal on Capitol Hill. They are not alone. House leadership has called for cancelling the high-speed rail program as part of its deficit reduction plan. Opposition from governors and state legislatures adds another hurdle to the Administration’s plan. Without state support high-speed rail projects cannot go forward. But, as we have seen, the governors of Wisconsin and Ohio have declined to participate in the Administration’s HSR programs. Other governors, concerned about potential operating subsidies, open-ended risk of construction overruns or unable to raise the required matching funds, may do likewise. Florida’s Gov. Scott, in introducing his budget proposal on February 7, offered a hint about his thinking, that makes HSR boosters uneasy. “Over the last few years,’ the Governor said, “Florida accepted one-time hand-outs from th federal government. Those temporary resources allowed state and local governments to spend beyond their means. There was never any reason to think that Florida taxpayers could afford to continue that higher level of spending once the federal hand-outs are gone. The false expectations created by the federal hand-outs are the reason we hear about a multi-billion dollar deficit.” The words “high-speed rail” and  “operating subsidies” were not mentioned, but the implication was clear. Several other high-speed rail projects are in danger of collapse because of stringent conditions demanded by the Federal Railroad Administration (FRA)— conditions that the host railroads find unacceptable. As reported by the respected railroad observer Fred Frailey, high-speed rail projects in Washington State, North Carolina and Virginia, totaling $1.4 billion in HSR grants, are in jeopardy because the service agreements negotiated by the states with Class 1 railroads have been rejected by the FRA as not strict enough. At the core in each case is the railroads’ insistence that passenger train operations must not interfere with freight operations and their refusal to accept penalties for potential delays suffered by passenger trains. If these projects fall through, there will be little to show for the $10.5 billion HSR program other than a 48-minute reduction in travel time between Chicago and St. Louis as a result of an ongoing project with Union Pacific (see, “The Uncertain Future of the High-Speed Rail Prgram,” InnoBrief, January 5, 2001). It is revealing that the only example the White House announcement chose to highlight  was a $38 million program of track improvements between Portland and Brunswick, ME to permit a 30-mile extension of the five Downeaster round trips to and from Boston at slightly increased speeds, as Frailey pointed out. Given this meager progress, given more than ample evidence of congressional and state-level opposition, and with so many much more deserving infrastructure needs awaiting federal support (incl. rail in the Northeast Corridor), one wonders why the Administration has chosen to doggedly pursue its unrealistic vision of a nationwide high-speed rail network. We hope Congressmen Mica and Shuster will try to get some answers.

C. Kenneth Orski is a public policy consultant and former principal of the Urban Mobility Corporation. He has worked professionally in the field of transportation for over 30 years, in both the public and private sector. He is editor and publisher of Innovation NewsBriefs, now in its 22nd year of publication.

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