One of President Obama’s key infrastructure initiatives is dead in the water, reports Michael Barone in National Review. Despite being allocated $8 billion from the 2009 Stimulus bill and another $2.5 billion from the Democrat-controlled Congress, the President’s $53 billion vision for a nation-wide high speed rail network has flatlined.

The majority-Republican House has declined to furnish this proposal with any further money, while the Democrat-controlled Senate Appropriations Committee voted to allocate it a meager $100 million. As Barone notes, coming from Democrats, this is a blatant vote of no confidence in the high speed rail initiative. Following this rejection, it is nearly impossible to see a revival of the President’s high speed plans in his remaining tenure.  

Allegedly, this sophisticated rail network was going to employ millions of Americans in construction, engineering, and railway jobs, while upgrading transportation access.  State governments, however, never warmed up to this proposition, because the costs vastly outweighed the benefits. Once the initial government subsidies end, states would be left to pay for the mammoth costs of a higher-speed version of the failing Amtrak model.  In fact, none of the lines would actually meet the technical definition of “high speed.”

The textbook example of high speed rail’s failure is the California High Speed Rail Authority’s gross mismanagement of taxpayer funds to build a veritable train to nowhere. Facing an upcoming Congressional  election, Democratic incumbent Jim Costa received a $900 million grant to build a high speed line connecting two barely inhabited communities. This train to nowhere now sits incomplete despite having nearly $5 billion allocated to it.

As this case illustrates, the idea of high-speed rail is a transparent ploy at “progress” by putting America back to work- except that it is wholly unnecessary and any temporary construction jobs will be cancelled out by the extraneous government spending and taxes needed to maintain it. That both parties seemingly recognize this speaks volumes about how utterly this idea is a dead-end one.

NEW ORLEANS, La. - The debate over whether to build a high speed rail line between Baton Rouge and New Orleans is heating up.

Scott Bernstein, president of the Center for Neighborhood Technology, says that a rail line connecting Baton Rouge and New Orleans could be as successful as Amtrak’s most profitable lines.

He claims that routes that run from 80 to 170 miles tend to be the best able to support themselves through fares. Shorter routes, such as Amtrak’s Capital Corridor in Northern California, usually recover 75 percent to 80 percent of their operating costs through fares.

However, the remaining 25 percent to 20 percent of operating costs not covered by fares are paid for by taxpayers.

Proposed Gulf Coast Corridor

Randal O’Toole of the Cato Institute refutes the notion that taxpayers should make up the difference, claiming that any project that cannot cover its operating costs is not viable, and contends that the length of the rail line “has almost nothing to do with” covering operating costs.

He cites data from the New Haven-Springfield corridor, that shows the 62 miles rail line loses 56 cents on every dollar of operating costs, while the Chicago-Milwaukee corridor, which serves 11 million people, loses 40 cents on the dollar, leaving taxpayers to make up the difference.

In addition, O’Toole claims that there is almost no statistical correlation between the percent of operating costs covered by fares and corridor length.

Bernstein, citing a 2009 study, states that the rail line would cost taxpayers $105 million to build, while generating $186.5 million in benefits over 30 years.

However, O’Toole points out that this estimate is understated compared to current high speed rail projects. “$105 million on an 80-mile corridor is not going to produce a high-speed train. True high speed rail (150-mph or more) on an 80 miles route would cost several billion dollars.”

Florida considered spending $3 billion on a 85-mile high speed rail line in 2011, but scrapped the idea as being too costly for taxpayers.

Gov. Bobby Jindal

In 2009, Gov. Bobby Jindal made headlines when he refused $300 million in federal stimulus money intended to kick-start a high speed rail project for Louisiana. Gov. Jindal reasoned that maintenance costs would be too high to justify building the rail system between Baton Rouge and New Orleans.

In addition, Vice President Joe Biden has called for spending $53 billion on passenger trains and high-speed rail projects over the next six years, as part of the administration’s goal of making high-speed rail accessible to 80 percent of Americans within 25 years.

Worldwide, only two high speed rail lines have broken even, both of which are located in densely populated areas of France and Japan where people drive less because gas prices are twice as high as in the U.S., and many foreign intercity highways levy high tolls.

Robert Ross is a researcher and social media strategist with the Pelican Institute for Public Policy. He can be contacted at rross@pelicaninstitute.org, and you can follow him on twitter.

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.

A feasibility study by Burk-Kleinpeter Inc. and HDR Engineering emphasizes the economic and social benefits of the proposed high-speed rail linking New Orleans to Baton Rouge. Currently under revision, the final report is due March 16.

With an estimated 78% probability of having a positive return on investment, the study claims that the value creation offsets the project’s costs. However, a Baton Rouge news site reports that Louisiana would bear the burden of $11 million to $14 million in annual subsidies. These costs are too high for a state already facing large deficits.

The BR-NO rail has been debated for years, but the controversy heated up when the state turned down stimulus money that would have funded its creation. While Bobby Jindal rejects the plan due to its high costs, Cato Institute scholar Randal O’Toole concentrates on the project’s hidden negative impacts.

In a Pelican Institute publication, O’Toole argues that the new high-speed rails will be “an expensive slippery slope” leading to higher costs for Louisiana taxpayers. The project would not relieve overall traffic congestion, and only few Louisiana residents will use the new trains. In other words, the possible economic benefits from new rails line will be greatly offset by high maintenance costs and low customer usage.

O’Toole believes that Louisiana should not build new rail lines; it should instead spend the federal stimulus money on safety measures by improving signaling and crossing gates on existing lines.