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Commentary: Obama’s $53 Billion Transport Boondoggle

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High Speed Rail Lacks Constituent Need and Economic Reasoning

President Obama’s proposed $53 billion plan for high-speed railways across the country is a horrendous idea, even if he and his administration are yet to divulge the precise details. He seeks $53 billion of new spending over a six year period, with the lofty hope that 80% Americans will then have access to high-speed rail within 25 years.

This follows the $10 billion of stimulus funds allocated to the same cause. The fundamental problem with such a plan is unwittingly enunciated by the National Journal.

“Obama’s futuristic vision of infrastructure development… depends on the willingness of congressional appropriators to let the government work its will” (italics mine).

This statement represents the fallacy of Obama domestic agenda: its pattern of overreach into the lives of American citizens in response to politicians and special interests rather than to the will of the people. This aggrandized plan is a deliberate political move on the part of the Obama Administration, not a response to any real crucial civic need. As former Rep. Ernest Istook elaborates, “Except for our coastal areas, most of America lacks the population density that makes rail more feasible in places like Europe, Japan, or China. President Obama’s political support happens to be centered in our large cities that would claim the benefits of high-dollar rail subsidies.”

Furthermore, railways habitually fail to sustain themselves and require a large number of taxpayer subsidies to remain solvent. Unlike personal automobiles or planes, people who use public railways often do not pay their own way, or don’t pay nearly enough to balance out the construction and operating costs. Because there are very few metropolitan transits or long distance routes in America which would necessitate, let alone profit from, high speed rail, Obama’s ambitious design is bound to require continuous subsidies.

Leaving aside the political machinations behind this grandiose scheme, it would be a serious economic miscalculation. Prominent Republican opposition to Obama’s plan – Rep. John Mica (R-FL), chair of the House Committee on Transportation and Infrastructure, and Rep. Bill Shuster (R-PA), Chairman of the Railroads Subcommittee – rightfully worry that the largess of this proposal exceeds the actual need for high-speed rail across the country.

Rep. Mica is investigating how the $10 billion from the stimulus package was spent, and his findings will give an indication as to how much waste we can expect when the total rises to $53 billion. Cato Institute transportation expert Randal O’Toole has demonstrated the culture of wasteful spending that accompanies government oversight of transportation development.

O’Toole points to the California High Speed Rail Authority as a particularly egregious example of arbitrary spending. This “paragon of mismanagement” has been developing plans for a 220 mph rail network which will require $43 billion for the first leg alone. Less than a week before the November elections, the Obama Administration gave the CHSRA a $900 million grant towards building rail lines in the district of a Democratic incumbent facing uncertain reelection. Accordingly, the money was spent in the district of Jim Costa, connecting the barely inhabited town of Corcoran to another literally uninhabited location.

A bipartisan response decried this shameful expenditure as a “train to nowhere,” while Costa eked out a victory. We can expect such profligate spending on a gargantuan scale if President Obama’s plan were to come to fruition. Taking into account the costs to construct, operate, and maintain a tax-payer subsidized national rail network, including the inevitable union costs, the price tag will inevitably grow well beyond $53 billion.

Fortunately, the Obama administration faces a difficult time getting Congressional approval, and Obama appears to have virtually no idea where the money to fund this endeavor will come from. The new Congress, at least on the surface, is dedicated to restraining spending and will provide some resistant.

State governments are in no financial shape to fund an unnecessary network of railways, which explains the predicament in California and Florida. Construction of high speed railways began there, with encouragement from Obama, only to stagnate once federal money dried up.

The simple solution is to stop imposing federal boondoggles on the states and let them determine their needs for expanded rail networks. Rather than depend on money which the federal government should be conserving, state governments should defer to private companies which would better assess and then need and then deliver transportation services more efficiently and cheaply.

Innovation, regardless of industry or sector, primarily comes from the private sector, not from government taxation and intervention. One can only hope that the Obama Administration comes to this realization before embarking on a $53 billion debacle

Jamison Beuerman is a blogger with the Pelican Institute for Public Policy.

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