You must read this news analysis from the New York Times, TODAY. It anticipates tonight's State of the Union speech by the President.
I'll get right to the bottom line. Public work projects, like repairing broken bridges are an infrastructure investment. So are fixing highways, airports and runways, water delivery systems (California's is on the brink of collapse), power delivery grids and systems, railroads and urban transit operations.
Unfortunately, the President includes the creation of a new high-speed rail system in that shopping list.
And that's a huge mistake.
Republicans are loath to spend money on high-speed rail because the federal government will not pay for it, but merely provide seed-funding (more about that in a moment), expecting the states (already on the brink of bankruptcy) to pay for this Administration vision. And they don't want it because to pay for it means pouring tax dollars into it. They want to lower, not raise taxes.
The President believes funding HSR development will stimulate the economy. And, as we said in our prior blog entry, that's a misconception since the entire intent is to spend money for unemployment and economic recovery, not because we need or want a high-speed rail system, especially if it will cost the Nation one trillion dollars or more. The jobs created are not real jobs like private sector manufacturing or services; they are temporary public works make-believe jobs for a make-believe project.
The President, we are told, is seeking long term "economic competitiveness." What does that mean? Because Europe and Asia have high-speed trains, we must have them also? Will that make us competitive? How about our competing with China's manufacturing capacity where workers are paid an average of around $5,000. per year? Perhaps that's why we're not "competitive." The point here is that spending unavailable dollars to build flashy, whizzy luxury trains won't make us competitive, especially if they are built by foreign manufacturers such as China.
Is it the process of spending hundreds of billions of dollars' worth of construction within a public works project of vast dimensions that will make us competitive? Or is having state subsidy-supported trains that go 200 mph from Tampa to Orlando, or San Francisco to Los Angeles that will make us competitive? That makes no sense.
Mr. Obama wants "to rebuild the nation's aging infrastructure." And so he, and we, should. We already know the shopping list. That, we all know, will cost billions. Much of it is "shovel ready" right now (and has been for a long time). Also, our urban and regional transit systems are struggling for both operational funds, maintenance and upgrade support; more billions. Shouldn't those all come first?
Do I need to mention that the federal government is on the verge of credit rating reductions since the national debt is in the many trillions and the interest alone is consuming about one third of the national revenue stream?
If we do intend to borrow more, then let's by all means fix the leaking roof and repair the aging car in the driveway. Let's not borrow more money to buy a Ferrari! Yes, I do understand the Keynesian argument, but that doesn't mean we shouldn't be highly selective in what we borrow for, and a high-speed rail system is an overpriced pig in a poke.
In this news analysis, Michael Cooper again raises the issue of "livability" as the Administration's measure of investment worthiness. We mentioned this briefly in prior blog entries. That term seems to drive and justify the government's intent to expand mass transit, particularly inter-city rail.
In view of the fact that there is no national, over-arching transportation and transit strategy or policy (just as there is none at the state level), being a proponent of one modality over another, in this case, HSR over highways, doesn't make a huge amount of sense. Favoring rail over highway and air travel has become politically correct, but is actually unsubstantiated by honest and reliable data. There is ample counter analysis telling us that all the hyped rhetoric favoring HSR is rigged and without substance. Let's just say here that we need all transit modalities, but it needs to be the "right tool for the right job;" that is, cost/effective. And high-speed rail isn't.
Interestingly, there is a similar struggle taking place elsewhere in the government right now.
Disclosure: My wife works for NASA and we are both close NASA watchers of the budget and agenda deliberations that take place constantly in Washington. The government has been sending mixed messages for a number of years. Congress wants this or that program; going to the moon, not going to the moon, going to Mars, going to an asteroid, etc. but is never willing to provide adequate funding. It's a no-win situation and the endless debates and ambiguities are crazy making and leave the agency directionless and constantly improvising. One of the confusing, driving forces in this quagmire can be called The Romance of Space.
Basically, it's about wanting something very expensive and not being willing or able to pay for it. Doesn't that sound like the "American Dream" to you? Aren't we "entitled?"
I bring this up because high-speed rail is a similar problem. What we are talking about here regarding HSR is The Romance of Rail. We want it because we believe it will make us look good. We want to be Number One at everything. Whether human space travel or passenger rail travel at 200 mph, we Americans must have it or hang our heads in shame. Isn't that what TV advertisement is all about? Buy that expensive hair cream that you deserve? What a stupid way for the government to conduct the peoples' business.
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January 24, 2011
Pitch for Rebuilding Infrastructure Carries Political Challenges
By MICHAEL COOPER
When President Obama uses his State of the Union address on Tuesday to rally America to “outbuild” other nations, he will face an unusual challenge: getting Republicans to embrace public works projects again as the kind of worthy bacon they have traditionally fought to bring home, and not as wasteful pork that should be spurned.
The atmosphere has changed considerably since last year, when the president used his address to outline his vision of a national high-speed rail network and then flew to Tampa the next day to announce stimulus money for a bullet train to Orlando.
Now Florida’s new Republican governor, Rick Scott, is looking that gift train in the mouth and trying to decide whether to accept the promised $2.4 billion from the federal government to begin construction. New Republican governors in Ohio and Wisconsin have already turned down federal money for new rail lines that they saw as boondoggles. And the Republicans who now control the House have said that deficit-reduction, not new spending projects, would be their top priority.
So Mr. Obama is recalibrating his message and trying to make the case that public works are not just about short-term construction jobs, but about long-term economic competitiveness. He is increasingly arguing that spending money to rebuild the nation’s roads, rails, ports, power grids and even broadband networks will be necessary if America is to be able to compete in the global economy. And he is expected to repeat his call for creating a National Infrastructure Bank, which would choose public works projects by their merits.
“The question is, how do you know you’re going to get a return on your investment?” said David Burwell, the director of the Energy and Climate Program at the Carnegie Endowment, explaining the importance of careful project selection. “It’s a question of, how do you give us some confidence that you’re investing to grow the economy?”
Tuesday’s speech will be Mr. Obama’s third call to rebuild the nation’s aging infrastructure. His first effort, the $787 billion stimulus package, ended up devoting only a small part of the money to public works, and many stimulus projects were selected more because they were “shovel ready” and could get people working relatively quickly than because they were particularly transformative. His second effort, a call for a $50 billion infrastructure program on Labor Day, went nowhere in the run-up to the midterm elections.
The challenge the administration now faces is twofold: negotiating a new transportation bill with Congress amid great uncertainty over where the money will come from and what it should be spent on, and then devising a system that would ensure that in times of limited resources, the worthiest projects get money.
In Washington, the Obama administration’s priorities for expanding mass transit, passenger rail and what planners call “livability” will likely be challenged by Republicans in Congress, who come from more rural areas with different needs — a trend that gathered steam after the midterm elections. The median Republican Congressional district now has a population density 11 times smaller than the median Democratic district, according to an analysis by Transportation Weekly, a trade publication that focuses on federal transportation spending. That kind of disparity can have big ramifications when it comes to deciding how much federal transportation money should be spent on, say, mass transit instead of highways.
The battle is already beginning to play out. Just last week, a bloc of conservative Republicans in the House released a proposal to cut Amtrak subsidies, grants for passenger rail and high-speed rail, a major federal transit program and the federal subsidy for the Washington Metro. That led William Millar, the president of the American Public Transportation Association, to charge that the group had “focused only on the short-term costs without looking at the economic value these essential public transportation investments provide.”
There are areas of possible common ground. The new chairman of the House Transportation and Infrastructure Committee, Representative John L. Mica, Republican of Florida, had long been a champion of high-speed rail. But unlike the Obama administration, which decided to put more than half of its high-speed rail money toward regular passenger routes that it hopes can one day be upgraded, Mr. Mica wants the federal money to go toward true bullet trains that could be run at a profit and attract investment from the private sector.
Right now the bulk of the money in the federal Highway Trust Fund comes from the federal gasoline tax, a flat 18.4-cent tax levied on each gallon of gasoline sold that has not been raised since 1993. One of the less-noticed proposals made late last year by the president’s commission of fiscal responsibility and reform — sometimes known as the debt commission — was to gradually increase the gas tax by 15 cents per gallon from 2013 to 2015. But doing so could still be politically difficult.
In an era where “bridges to nowhere” have eroded public confidence, most federal transportation money is divided by a formula and sent to the states, which get wide latitude in deciding how to spend it. This fall, a report by the Treasury Department and the Council of Economic Advisers found that “with a few notable exceptions, federal funding for infrastructure investments is not distributed on the basis of a competition between projects using rigorous economic analysis or cost-benefit comparisons.”
This article has been revised to reflect the following correction:
Correction: January 25, 2011
Because of an editing error, an article on Tuesday about President Obama’s plan to stress the need to update the nation’s infrastructure during the State of the Union address referred incorrectly to population data for Congressional districts. Democratic districts tend to be more urban, so the average district has a population density that is 11 times greater than the average Republican district; the average Democratic district does not have a total population that is 11 times greater than an average Republican district.
