Wednesday, December 21, 2011

My mistake about confusing government agencies and who's looking at High-Speed Rail

I made a big boo-boo in the prior blog entry by confusing the Congressional Budget Office (CBO) with the Government Accountability Office (GAO). (Blame it on the egg-nog.)  It's the latter, the CAO,  that the California Republican House Caucus, plus John Mica, is asking for an audit of the CHSRA project.  Not the CBO.  

The mistake, for which I apologize, was in confusing the federal two agencies in my comparing the federal agency with its state equivalent.  The Legislative Analysts' Office in Sacramento is the state version of the Congressional  Budget Office, which at the federal level advises the Congress.  Neither the state nor the federal level of these agencies has decision authority.  However the State Auditor and the federal GAO are the accounting analysts for their respective governments. 

What all this means for us is this: The Republicans in the House are really serious about fact-finding with the California HSR project, and then making those findings stick.  Were the GAO to come out with a damning report on the CHSRA, it will be really difficult (but not impossible) to continue to fund the rail project, even with the awarded $3.3+ billion now obligated by the FRA.

This really bears watching. 

House Republicans want inquiry into California high-speed rail
Associated Press
Posted: 12/20/2011 08:08:17 PM PST
Updated: 12/20/2011 08:40:02 PM PST

WASHINGTON -- Congressional Republicans on Tuesday escalated their case against the California high-speed rail program, with calls for an independent audit by a nonpartisan watchdog agency.

Led by House Majority Whip Kevin McCarthy, R-Atascadero, the GOP lawmakers formally requested a review by the Government Accountability Office. In particular, the congressional skeptics want a closer look at California's ridership and cost projections.

"Allowing the money of hardworking Americans to be wasted on a questionable project with many unanswered questions would be an abdication of our responsibilities," McCarthy wrote in a letter signed by 11 other House members. Ten of the letter's signers are from California.

Because of the agency's carefully maintained reputation for neutrality and thoroughness, a GAO study could effectively shape both public and political attitudes toward the California project. One way or another, it's likely to become ammunition.

"As one of the largest projects in the country and as one of the largest job creators in the country, we realize this project deserves careful review," acknowledged Tom Umberg, chairman of the California High-Speed Rail Authority board.

Umberg, in a statement Tuesday, added that it is "more than appropriate" for the Government Accountability Office to weigh in.

The GAO seems likely to heed the request, whose backers include Rep. Jeff Denham, R-Fresno, and two House committee
chairmen in addition to McCarthy. Separately, McCarthy and other Republican lawmakers have introduced legislation to mandate a GAO study.

One of the chairmen urging the GAO audit, Rep. John Mica, R-Fla., already used his House Transportation and Infrastructure Committee position last week to convene a hearing designed to showcase criticism of California's ambitious plan.

"The California project is turning out to be an additional disaster in a long list of projects touted for high-speed rail," Mica declared at the start of last week's four-hour hearing.

The latest business plan prepared by the California High-Speed Rail Authority anticipates a $98.5 billion price tag over the next 20 years, more than twice the original cost. Planners anticipate connecting Los Angeles to San Francisco with trains traveling through the San Joaquin Valley at speeds of up to 220 mph.

California voters have approved a $9.9 billion bond measure. The Obama administration has provided $3.6 billion, plus several hundred million dollars for other California rail projects.

The Republicans' request identifies seven specific areas for investigation. For instance, the lawmakers want the GAO's assessment of the "accuracy of ridership projections" prepared by California high-speed rail planners. By the year 2034, officials have claimed, 30 million riders annually would be traveling at high speeds between Los Angeles and San Francisco.

The House Republicans also want an assessment of how much state and federal funding will be required to complete the California project. Starting in fiscal year 2015, the project's business plan anticipates some $52 billion in federal grants, according to congressional estimates.

Bringing the issue down to the level of the individual rider, the House Republicans also want the Government Accountability Office to investigate what ticket prices would have to be for the project to be self-sustaining.

One skeptic, Elizabeth Alexis of the Palo Alto-based Californians Advocating Responsible Rail Design, predicts taxpayers will be providing a subsidy of nearly $100 per California passenger for the first 30 years.

"Needless to say, the California High-Speed Rail Authority's recently released business plan for the project only raises more questions and concerns," McCarthy and the other lawmakers wrote.

Other Republican lawmakers signing the letter, from California, are Reps. Darrell Issa, John Campbell, Brian Bilbray, Duncan Hunter, Tom McClintock, Gary Miller, Buck McKeon and Devin Nunes. 

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