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Obama Raises his Bet on High-Speed Rail

The White House won’t back down. That was the signal beamed yesterday when Vice President Joe Biden announced the administration’s plan to spend $53 billion on high-speed rail over the next six years. But questions remain: How can the administration convince a spending-skeptical public it’s a worthwhile investment? And how can it bring long-term funding predictability to high-speed rail?

Since winning control of the House, Republicans have been angling to cancel the administration’s high-speed rail program as part of their deficit reduction plan. Their goal is to halt the program before any new train segment is constructed in Florida and California (where plans are most advanced) and to rescind funds appropriated but not yet spent on other passenger rail lines under the stimulus act.

Yesterday, the administration called their bluff by asking for $8 billion for fast trains in the 2012 federal budget, followed by $45 billion over the next five years.

The proposal puts a bold but reasonable dollar sign on President Obama’s State of the Union pledge to bring high-speed rail to 80 percent of Americans within 25 years. The federal government now spends about $35 billion a year to maintain its highway system. Washington will have to spend considerably more to expand roads to accommodate a growing population if new train lines are not in the transportation mix.

Assets Matter

But to make high-speed rail happen, the White House needs to mount a better public education campaign. For starters, the president must hammer home the point that developing modern infrastructure matters just as much as cutting spending.

In other words, while we want to avoid government waste that raises the national debt, productive debt – or debt that creates future opportunities for all citizens – is not a burden, especially when money can be borrowed at record low interest rates.

A presidential trip to General Electric’s locomotive factory in Erie, Pa., could demonstrate that America has an existing manufacturing base for high-speed rail. This base needs to be tapped before more jobs migrate to countries that actually make things.

GE has pledged to develop high-speed trainsets aimed for the California and Florida lines. CEO Jeffrey Immelt could pitch in by tasking his big financial arm, GE Capital, to help finance promising rail projects.

President Obama should also lean on his newfound friends at the Chamber of Commerce. Joe Biden got it right yesterday by warning that “commerce is going to suffer and it’s going to show up on the bottom line” if the U.S. does not improve the flow of people and goods. Building and operating high-speed lines would also create tens of thousands of middle-class jobs.

Reforming Congressional Spending

Public persuasion must be matched by a more clear-eyed view of how to fund this long-term program without the uncertainty of annual congressional appropriations.

The six-year surface transportation bill coming before this session of Congress could be an excellent vehicle for the White House to develop a reliable source for high-speed rail funding. We have outlined in a policy memo how to restructure the transportation bill, now beset by wasteful congressional earmarks, into a productive program that leverages public money with private capital.

While the White House and House Republicans currently appear far apart on high-speed rail policy, there are areas of compromise. House Transportation Committee Chairman John Mica (R-Fla.) has been critical of stimulus money spent on existing rail lines for upgraded passenger service. Mica says he is in favor of “true” high-speed rail that operates above 150 mph and would support federal funds that reduce trip times along Amtrak’s busy Northeast Corridor.

There seems to be room for the White House to accommodate Mica’s concerns, including expediting an environmental impact study that currently hangs up progress in the Northeast Corridor, and ways for Mica to persuade his colleagues that reflexively obstructing rail projects is not the way to bequeath America a better transportation future.


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