Monday, April 11, 2011

What's behind the high-speed rail debate in Washington: One viewpoint

Consider this more of a background piece on decision making along Party lines in Washington.  That's where the action is right now regarding high-speed rail. Freemark raises the fundamental issue of the federal role in creating new infrastructure programs for transportation.

We are not at all convinced that private investments in passenger rail infrastructure are plausible, regardless of the funding format proposed. (Trust Funds, Investment 'Banks',etc.) Due diligence should make it clear to the financial industry that passenger rail transit is fundamentally a deficit operation requiring permanent government subsidies, high-speed rail in particular, and therefore is an unrewarding use of private investment.   

Diverting highway trust funds are in a double bind; using them for rail development, and taking people out of cars -- as the rail promoters keep telling us -- means fewer driving miles and therefore fewer fuel tax dollars; hence, self-defeating. Also, such transfers from highway use reduces highway trust dollars for highway maintenance and development, thereby also killing the golden egg producing goose.  It's an example of political and emotional manipulation.  Punish the car users by degrading their roads to build mass transit systems, including inter-city ones. It's fundamentally irrational. 

Freemark is also right about the Democratic agenda of coupling transportation with urban development.  The one is intended to support the other.  That's totally apparent when watching the video from the CHSRA on their website.  As blue and yellow trains whizz into and out of San Jose's Diridon Crystal Palace train station, we can see high-rise high-density housing growing like weeds all around the station in that urban center.  Density urbanization is the goal that will generate rail customers.

This is massive social engineering.  It obliges and coerces people to move into smaller inner city dwellings in order to be close to urban transit, and it builds transit to enable and justify that high-density development.  The code term for this is 'smart growth' and it's a developers' dream.  

Transit-Oriented Development!  Federally sponsored.  The Department of Transportation and Secretary Ray LaHood are big supporters.  It's a huge component of the Democratic philosophy, intended to reduce vehicular use, diminish residential suburbs, and subsume an ever larger cultural dynamic -- how we all live and work -- under government guidance.  Sect. LaHood calls it 'livability' which is code for massive construction. And that's where the so-called economic benefits and job creation are intended to come from.

Yet once more, follow the money.  Society becomes the pawn of the collusion between government and large corporate interests.  Massive construction projects and massive transit projects are joined with massive federal funding, ostensibly to the benefit of mankind, but, in fact, to the financial benefit of the contractors and consultants who stand to become wealthy in the massive consumption of resources.  What's involved is highly manipulated land use management and eminent domain land takings.

All this underlies the raging debate taking place in Washington.  It's not about trains or housing; it's about the marriage of politics and money.

The New Congress Makes Its Claim on the Budget
Yonah Freemark
 April 10th, 2011
» A compromise on the budget signals that the White House is not fully committed to an expansion in infrastructure investment.

The agreement between Republicans and Democrats last Friday kept the federal government from shutting down for a short period, but it did not provide for longer-term fiscal stability in Washington nor did it do anything to tone down the increasingly shrill complaints from conservatives over the size of the national budget.

One thing it did indicate, though, was that of all federal funding commitments, those that affect cities most directly — in transportation and urban development — are most likely to be cut. 

Of the $2 billion pulled from the nation’s Fiscal Year 2011 budget last week, every cent was taken from either the Department of Transportation or the Department of Housing and Urban Development. Once final decisions are made for the rest of the year’s budget, and once discussions begin on the 2012 budget, matters could be even worse.

With House Budget Committee Chairman Paul Ryan (R-WI) leading the charge, U.S. funding for urban priorities are likely to see the brunt of fiscal cutbacks, thanks to the GOP’s unwillingness to raise taxes or cut military spending — and the Democratic Party’s general lack of courage in proposing to do so (despite, after all, continuing to control both the Senate and the White House). 

Mr. Ryan’s budget, which has been panned as actually likely to increase the budget deficit whatever its putative aims, would eliminate all spending on high-speed rail and even the New Starts transit capital program, which is one of the only major federal transportation programs that actually uses merit-based measures to evaluate alternative investments.

Compared to the Obama Administration’s budget, the Ryan proposal would reduce transportation expenditures by a startling 55.6%, more than any other part of the budget. As I have described before, there is nothing particularly surprising about the Republican insistence on reducing spending on urban-focused programs: The Democratic Party has a virtual monopoly on urban congressional districts, so when it is not in power, those areas suffer.

A caveat: Much of the funds cut last week, including $1.5 billion for high-speed rail (leaving $1 billion in place), had yet to be obligated and thus arguably were not “cuts.” Another $280 million in New Starts money was eliminated, but those funds were supposed to go to the ARC Tunnel, which was cancelled. And the Administration’s proposed budget was never final, so making comparisons to it may be an unfair exercise.

But the point remains: Despite President Obama’s proposals for a huge increase in transportation funding in February, the hard-lining of Republicans and the weak response from Democrats is likely to mean a decline in spending whatever the need. Even as the President has called for a vast investment in the nation’s roads and railways, Republicans are convinced that the country must remain “within its means,” which in their opinion means keeping federal transportation investments within the bounds of revenues collected by the Highway Trust Fund.

U.S. national spending on surface transportation has in recent years increased to about $50 billion annually. Relying on the Trust Fund alone would reduce that to about $30 billion. There is no reason to believe that Republicans will soon agree to a deal that would increase the fuel tax or that would institute some new form of financing, such as a vehicle-miles traveled fee. Nor will many Democrats, who are already worried about their prospects for election in 2012. The fact that alternatives exist that would increase federal investments in the nation’s infrastructure and that would reduce annual budget deficits has not made much of a dent on the right-wing atmosphere that is choking Washington.

If appropriate decisions were made about how to distribute those funds, that might be acceptable in the short term, as there are some transportation projects that are simply a waste of funds. Yet the conservative insistence on reducing government spending is not a long-term solution for funding mobility, as states and cities are cash-strapped and the private sector, whatever its merits, does not have the investment power to finance the nation’s transportation system (nor should it). Moreover, a reduction in overall transportation spending with Republican control over Congress seems likely to mean mostly a reduction in spending on things that you and I care about, like public transportation.

Unwilling to actually make an argument in favor of a tax increase, Senators and Congresspeople have been falling over themselves to endorse Los Angeles Mayor Antonio Villaraigosa’s American Fast Forward program, essentially a national version of L.A.’s 30/10 scheme. The effort would use federal guarantees to leverage private funds and pay for projects now with future tax revenues. That may sound good for this year and next, but it does not mean more transportation spending in the long-term.

There are few ways to see the budget compromise as a positive step. So far, it has made a mockery of the idea that the government’s role is to invest in the nation’s future through improved infrastructure. And it suggests that the Democrats, from the President on down, are unwilling to stand up for the public sector’s important place in guaranteeing an equitable and appropriate distribution of resources.