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	<title>The Transport Politic &#187; Congress</title>
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	<link>http://www.thetransportpolitic.com</link>
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		<title>Time to Fight</title>
		<link>http://www.thetransportpolitic.com/2012/02/06/time-to-fight/</link>
		<comments>http://www.thetransportpolitic.com/2012/02/06/time-to-fight/#comments</comments>
		<pubDate>Mon, 06 Feb 2012 05:32:35 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Congress]]></category>
		<category><![CDATA[DOT]]></category>
		<category><![CDATA[Elections]]></category>
		<category><![CDATA[Finance]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=9452</guid>
		<description><![CDATA[<p>» With a House like this, what advances can American transportation policy make?</p>
<p>Actions by members of the U.S. House over the past week suggest that Republican opposition to the funding of alternative transportation has developed into an all-out ideological battle. Though their efforts are unlikely to advance much past the doors of their chamber, the policy recklessness they have displayed speaks truly poorly of the future of the nation&#8217;s mobility systems.</p>
<p>By Friday last week, the following measures were brought to the attention of the GOP-led body:</p>

The Ways and Means Committee acted to eliminate the Mass Transit Account of the Highway Trust <p><a href="http://www.thetransportpolitic.com/2012/02/06/time-to-fight/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p><strong>» With a House like this, what advances can American transportation policy make?</strong></p>
<p>Actions by members of the U.S. House over the past week suggest that Republican opposition to the funding of alternative transportation has developed into an all-out ideological battle. Though their efforts are unlikely to advance much past the doors of their chamber, the policy recklessness they have displayed speaks truly poorly of the future of the nation&#8217;s mobility systems.</p>
<p>By Friday last week, the following measures were brought to the attention of the GOP-led body:</p>
<ul>
<li>The Ways and Means Committee <a href="http://transportationnation.org/2012/02/03/house-votes-to-cut-transit-funding-stream-to-howls-of-pain/">acted to eliminate</a> the <a href="http://www.fhwa.dot.gov/safetealu/factsheets/htft.htm">Mass Transit Account</a> of the Highway Trust Fund, destroying public transportation&#8217;s source of steady federal financing for capital projects, first established in the 1980s. The members of the committee determined that to remedy the fact that gas taxes have not been increased since 1993,* the most appropriate course was not to raise the tax (as would make sense considering inflation, more efficient vehicles, and the negative environmental and congestion-related effects of gas consumption) but rather to transfer all of its revenues to the construction of highways. Public transit, on the other hand, would have to fight for an appropriation from the general fund, losing its traditional guarantee of funding and forcing any spending on it to be offset by reductions in other government programs.** This as the GOP has made evident its intention to reduce funding for that same general fund through a continued push for income tax reductions, even for the highest earners.</li>
<li>The House Transportation and Infrastructure Committee <a href="http://dc.streetsblog.org/2012/02/03/who-still-likes-the-house-transpo-bill-big-oil-big-truck-and-big-box-retail/">approved a transportation reauthorization bill</a> on partisan lines (with the exception of one Republican who voted against it, Tom Petri of Wisconsin) that would do nothing to increase funding for transportation infrastructure in the United States over the next five years despite the fact that there is considerable demand for a large improvement in the nation&#8217;s road, rail, and transit networks just to keep them in a state of good repair, let alone expand them to meet the needs of a growing population.</li>
<li>The committee voted to eliminate all federal requirements that states and localities spend 10% of their highway <a href="http://dc.streetsblog.org/2012/02/02/house-amendment-to-save-federal-bikeped-programs-fails/">funding on alternative transportation projects</a> (CMAQ), such as Safe Routes to School, sidewalks, or cycling infrastructure, despite the fact the those mandated investments are often the only ones of their sort that are actually made by many states.</li>
<li>The committee eliminated the Obama Administration&#8217;s trademark TIGER program, which has funded dozens of medium-scale projects throughout the country with a innovative merit-based approach. Instead, virtually all decisions on project funding would be made by state DOTs, which not unjustly have acquired a reputation as only interested in highways. Meanwhile, members couldn&#8217;t resist suggesting that only &#8220;true&#8221; high-speed rail projects (over 150 mph top speed) be financed by the government &#8212; even as they <a href="http://www.miamiherald.com/2012/02/03/2623089/house-panel-moves-to-block-high.html">conveniently defunded the only such scheme</a> in the country, the California High-Speed Rail program.</li>
<li>The same committee added provisions to federal law that would <a href="http://images.politico.com/global/2012/01/120123_highway.html">provide special incentives</a> for privatization of new transportation projects &#8212; despite the fact that there is no overwhelming evidence that such mechanisms save the public any money at all. And under the committee&#8217;s legislation, the government would provide extra money to localities that contract out their transit services to private operators, simply as a reward for being profit-motivated.</li>
<li>Meanwhile, House leadership recommended funding any gaps in highway spending not covered by the Trust Fund through a <a href="http://switchboard.nrdc.org/blogs/dlovaas/worst_transportation_bill_ever.html?utm_source=twitterfeed&amp;utm_medium=twitter">massive expansion in domestic energy production</a> that would destroy thousands of acres of pristine wilderness, do little for decreasing the American reliance on foreign oil, and reaffirm the nation&#8217;s addiction to carbon-heavy energy sources and ecological devastation. New energy production of this sort is highly speculative in nature and would produce very few revenues in the first years of implementation. As a special treat, the same leadership proposed overruling President Obama&#8217;s decision to cancel the Keystone XL pipeline by <a href="http://fuelfix.com/blog/2012/01/30/boehner-says-highway-bill-fair-game-for-keystone-xl-provision/">bundling an approval for it</a> into the transportation bill.</li>
</ul>
<p>This litany of disastrous policies were endorsed by the large majority of Republicans on each committee, with the exception of two GOP members in House Ways and Means*** and one in the Transportation Committee who voted against the bill, though the vote was entirely along party lines for an amendment attempting to reverse course on the elimination of the Mass Transit Account.</p>
<p>Fortunately, these ideas are unlikely to make it into the code thanks to the Senate, whose members, both Democratic and Republican, have different ideas about what makes an acceptable transportation bill. I&#8217;ll get back to that in a bit.</p>
<p>The House&#8217;s effort to move forward on a new multiyear federal transportation bill &#8212; eagerly awaited by policy wonks for three years &#8212; follows intense and repeated Republican obstructions of the Obama Administration&#8217;s most pioneering efforts to alter the nation&#8217;s transportation policy in favor of investments that improve daily life for inhabitants of American metropolitan areas. As part of that process, federally funded high-speed rail, streetcar, and transit center projects have been shot down by local politicians as a waste of money, even as road construction <a href="http://www.infrastructurist.com/2011/05/26/report-wisconsin-gov-scott-walker-to-spend-up-to-2-billion-on-new-roads/">has continued apace</a>.</p>
<p>The Tea Party&#8217;s zany <a href="http://www.nytimes.com/2012/02/04/us/activists-fight-green-projects-seeing-un-plot.html">obsession with the supposed U.N. plot</a> to take over American land use decisions through Agenda 21 seems to have infected GOP House members and even presidential contenders. Michele Bachmann&#8217;s <a href="http://www.treehugger.com/corporate-responsibility/quote-of-the-day-michele-bachmann-on-the-secret-green-agenda.html">claim in 2008</a> that Democrats are attempting to force people onto light rail lines to travel between their housing &#8220;tenements&#8221; and government jobs may have made it <a href="http://www.huffingtonpost.com/2012/02/04/newt-gingrich-calls-subwa_n_1254340.html">into the mind of Newt Gingrich</a>, who recently made the claim that the &#8220;elite&#8221; in New York City who ride the subway and live in high-rise condos don&#8217;t understand &#8220;normal&#8221; Americans. What kind of language is this?</p>
<p>In the Senate, there is clear evidence that the hard-core proposals of the House will not become law. The upper body&#8217;s Environment and Public Works Committee unanimously endorsed a <a href="http://switchboard.nrdc.org/blogs/dlovaas/map-21_forward_progress_from_s.html">different type of transportation reauthorization</a>, one that would last only two years but that would reform and simplify the grants provided by the Department of Transportation so that they are more based on merit in such matters as ecological sensitivity and the creation of livable communities.</p>
<p>Similarly, in the Senate Banking Committee, the transit portion of the proposed bill (<a href="http://dc.streetsblog.org/2012/02/02/senate-transit-bill-clears-committee-with-unanimous-bipartisan-support/">approved unanimously</a>) would maintain funding guarantees and <a href="http://dc.streetsblog.org/2012/01/31/senate-transit-bill-would-let-federal-funds-support-transit-service/">allow transit agencies to use federal dollars for operations</a> spending during periods of high unemployment, which <a href="http://www.thetransportpolitic.com/2011/12/28/local-funding-for-public-transportation-operations-producing-inequitable-results/">would be an excellent policy</a> if pushed into law. How the Senate will be able to compromise with the House in time for the March 31st deadline set by the current legislation is up in the air.</p>
<p>The strange and laudable part of the Senate side of the story &#8212; at least as compared to the House &#8212; is the bipartisan nature of decision-making there. Why are Republicans in the Senate promoting a transportation bill that explicitly would promote multimodalism as a goal, in a contrast to the highway focus of their peers in the House? Why are they accepting environmental criteria as appropriate measures of quality in transportation policy? Perhaps the Democratic Party&#8217;s control of the Senate makes fighting such ideas a waste of time. Or perhaps longer Senate terms in office allow clearer, more reasonable thinking.</p>
<p>Whatever the reason, in the long-term, it is hard to envision reversing the continued growth of the GOP&#8217;s strident opposition to sustainable transportation investments in the House. As I have documented, <a href="http://www.thetransportpolitic.com/2011/01/25/understanding-the-republican-partys-reluctance-to-invest-in-transit-infrastructure/">density of population correlates strongly and positively with the Democratic Party vote share in Congressional elections</a>; the result has been that the House Republicans have few electoral reasons to articulate policies that benefit cities. Those who believe in the importance of a sane transportation policy need to make more of an effort to advance a sane transportation <em>politics</em> to residents of suburban and rural areas, who also benefit from efforts to improve environmental quality, mobility alternatives, and congestion relief, but perhaps are not yet convinced of that fact. Doing so would encourage politicians hoping for votes outside of the city core &#8212; Democratic or Republican &#8212; to promote alternatives to the all-highways meme that currently rules the GOP in the House.</p>
<p>In the face of such actions, it becomes imperative in the short term not only to ramp up citizen opposition to the defunding of transit and associated programs, but also to full-throatily endorse those leaders who will stand up to fight. Not working for their election in the fall risks policies like those being advanced in the House being passed by an acquiescent Senate and signed by a future president. Such actions would put in question the potential improvement of existing programs and turn back on the policy strides that must be made to contest the vision some have of an all-automobile America.</p>
<p>* <em>The Congressional Budget Office <a href="http://www.businessweek.com/news/2012-02-01/u-s-highway-trust-fund-faces-insolvency-next-year-cbo-says.html">recently estimated</a> that based on current tax receipts, the government will run out of funding for new highways next year and for new transit in 2014.</em></p>
<p>** <em>I have in the past <a href="http://www.thetransportpolitic.com/2010/04/12/reforming-the-user-fee-approach-for-funding-transportation/">frequently cited the failings of the current user-fee based transportation funding system</a>. By taxing people based on their automobile use and using some of the funds for transit, we are of course attempting to counteract the negative externalities produced by pollution and congestion. But in the process, we are charging drivers &#8212; even in places with no alternatives &#8212; a regressive tax that limits the mobility of the poor. Thus we are <a href="http://www.thetransportpolitic.com/2011/05/07/the-ineluctable-politics-of-transport-funding/">directly tying funding for transit to revenues from automobiles</a>, a perverse relationship. Yet the alternative to the user fee is guaranteed funding from the general fund, not arbitrary annual appropriations to transit that House Republicans seem to be promoting.</em></p>
<p>*** <em>Erik Paulsen of Minnesota and Vern Buchanan of Florida, both of whom represent districts just outside city centers.</em></p>
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		<title>Ignoring Inaction in Congress, DOT Pushes Through Grants for Intercity Rail</title>
		<link>http://www.thetransportpolitic.com/2011/09/29/ignoring-inaction-in-congress-dot-pushes-through-grants-for-intercity-rail/</link>
		<comments>http://www.thetransportpolitic.com/2011/09/29/ignoring-inaction-in-congress-dot-pushes-through-grants-for-intercity-rail/#comments</comments>
		<pubDate>Thu, 29 Sep 2011 05:52:05 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Congress]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[High-Speed Rail]]></category>
		<category><![CDATA[Infrastructure]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=9058</guid>
		<description><![CDATA[<p></p>
<p>» Congress isn&#8217;t able to do much in terms of passing new legislation &#8212; but the Department of Transportation hasn&#8217;t hesitated to move forward to fund intercity rail projects.</p>
<p>Americans are frustrated with the Congress: Over 80% of the population disapproves of the job the national legislature is doing. And no wonder. With the unemployment situation out of control and the economy still on the skids, this is the time for government action.</p>
<p>All we seem to be getting, however, are repeated demands from Republicans to reduce spending drastically &#8212; and meek replies from Democrats worried about upsetting the electorate. President Obama&#8217;s Jobs <p><a href="http://www.thetransportpolitic.com/2011/09/29/ignoring-inaction-in-congress-dot-pushes-through-grants-for-intercity-rail/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p><img class="aligncenter size-full wp-image-9133" title="Albany Rail station" src="http://www.thetransportpolitic.com/wp-content/uploads/2011/09/Albany-Rail-station.png" alt="" width="540" height="305" /></p>
<p><strong>» Congress isn&#8217;t able to do much in terms of passing new legislation &#8212; but the Department of Transportation hasn&#8217;t hesitated to move forward to fund intercity rail projects.</strong></p>
<p>Americans are frustrated with the Congress: Over <a href="http://www.realclearpolitics.com/epolls/other/congressional_job_approval-903.html">80% of the population disapproves</a> of the job the national legislature is doing. And no wonder. With the unemployment situation out of control and the economy still on the skids, this is the time for government action.</p>
<p>All we seem to be getting, however, are repeated demands from Republicans to reduce spending drastically &#8212; and meek replies from Democrats worried about upsetting the electorate. <a href="http://www.thetransportpolitic.com/2011/09/09/with-diminished-expectations-president-obama-renews-attempt-to-expand-transportation-financing/">President Obama&#8217;s Jobs Bill</a>, introduced twenty days ago, would provide a real, albeit too small, stimulus to the economy, specifically through the construction and refurbishment of infrastructure.* But the legislation has yet to be introduced in either house of Congress. Meanwhile, getting any transportation spending approved other than <a href="http://dc.streetsblog.org/2011/09/13/house-passes-transportation-extension-unanimously/">short-term extensions</a> of the previous multi-year bill (which expired 729 days ago) has been impossible thanks to disagreement between the parties and a general reluctance to identify funding sources.</p>
<p>When Republicans took control of the House of Representatives early this year, they promised to fight to eliminate previously approved grants for states across the nation to invest in intercity rail projects. Facing a Democratic Senate, that would not be an easy proposition, but the intense effort to reduce government spending over the past year could have meant the loss of funds already promised to states &#8212; but for projects not quite ready for prime time.</p>
<p>In the meantime, the Department of Transportation has been pushing grants out of the federal government&#8217;s hands as quickly as possible so that they can not be rescinded.</p>
<p>In September alone, the <a href="http://www.fra.dot.gov/roa/press_releases/fp_index.shtml">Federal Railroad Administration has approved</a> hundreds of millions of dollars for intercity rail upgrades nationwide: $149 million for New York State, $116 million for New England, $49 million for Texas, $48 million for North Carolina and Virginia, $35 million for the Northeast Corridor, $31 million for Washington State, and $13 million for Oregon, among others. Earlier this summer, hundreds of millions of dollars were appropriated to California and the Northeast. Unless states turn back the money, unlikely considering that the projects have gotten so far and their pro-rail sponsors, these funds cannot be taken back by Congress.</p>
<p>It&#8217;s worth questioning how ready most of these states are to use these funds now that they have them, or how quickly they&#8217;ll be able to get construction started. The <a href="http://www.thetransportpolitic.com/2010/01/28/high-speed-rail-grants-announced-california-florida-and-illinois-are-lucky-recipients/">first high-speed rail grants were announced in January 2010</a>; other than the <a href="http://www.idothsr.org/">project to upgrade tracks between Chicago and St. Louis</a>, has any major construction begun?</p>
<p>The DOT, perhaps, wouldn&#8217;t be rushing these grants out to the states if it were completely confident that the high-speed and intercity rail funding program were alive and well. Under an Obama Administration and a fully Democratic Congress, that would be likely.</p>
<p>But the Senate <a href="http://dc.streetsblog.org/2011/09/20/senate-strips-high-speed-rail-funding/">came very close</a> a week and a half ago to approving a fiscal year 2012 budget that had no money at all for high-speed rail &#8212; and Mr. Obama seemed ready to go along, in the spirit of budget-cutting bipartisanship. The compromise that was eventually reached last week <a href="http://dc.streetsblog.org/2011/09/22/senate-saves-a-sliver-for-high-speed-rail/">saved $100 million</a> for the mode (a pittance compared to years passed), though even that could face considerable obstacles in the House.</p>
<p>Though Republicans now seem willing to spend a bit more money on transportation than they did a few months back because of an outcry that set in once it became clear that initial plans would reduce funding (and therefore transportation-related jobs) by 30%, their investment strategies would do <a href="http://dc.streetsblog.org/2011/09/23/mica-gop-leadership-looking-to-raise-transportation-spending-levels-in-bill/">little to increase the</a> annual federal appropriations now spent on mobility. We are at a standstill, unable to make a big move.</p>
<p>What has been made manifest over the past few months is that President Obama&#8217;s efforts to alter American transport policy have been far from universally accepted, that their long-term effect on U.S. mobility is unclear, and that the DOT has been forced to descend into a defensive mode in which it has no choice but to push grants out as quickly as it can for fears that legislators will change their minds mid-stream.</p>
<p>Mr. Obama&#8217;s affection for high-speed rail is well-known, and he has included it as an integral element of his transportation plans from the beginning, unlike former President Bill Clinton, who <a href="http://www.thetransportpolitic.com/2008/12/10/reality-check-clinton-92/">said he cared about intercity rail during the 1992 campaign but then proceeded to forget about it</a>. Yet, possibly because of low approval ratings stemming from other issues, the current Administration has been unable to convince other politicians &#8212; especially many Republicans &#8212; that such projects are worthy of investment. Mr. Obama&#8217;s message, rebooted several times (first as a way to &#8220;win the future,&#8221; then as part of the Jobs Bill), simply has not come across loud and clear.</p>
<p>These difficulties, along with the GOP-Governor-forced destruction of three marquee projects in Wisconsin, Ohio, and Florida, has once again reinforced the idea that Americans simply cannot handle the idea of spending government funds on intercity rail &#8212; despite the <a href="http://www.thetransportpolitic.com/2011/09/24/after-30-years-tgv-service-prospers-even-as-its-future-is-questioned/">quite positive effects it has produced abroad</a>. The fact that the Congress continues to debate transportation investments in terms of mode, with a certain pot of money reserved for roads, another pot for transit, etc., suggests that few in power have taken seriously the concept that transportation decision-making should be mode-neutral and oriented towards providing the best-possible mobility, economic, and environmental benefits. The fact that future rail investments are predicated on getting specific outlays for that mode is a sad reflection of the way we currently invest in our travel corridors and in our cities;  we seem to be considering mostly vehicles, not the passengers in them.</p>
<p>So the DOT moves forward, articulating a strategy to distribute the funds it does have as quickly as possible. This is not a long-term approach and it is not a sustainable one.</p>
<p>* The U.S. Department of Transportation recently announced how Mr. Obama&#8217;s Jobs Bill dollars <a href="http://dc.streetsblog.org/2011/09/28/will-obamas-transportation-jobs-plan-avoid-funding-sprawl/">would be distributed</a>: $27 billion for rebuilding roads and bridges; $9 billion for rebuilding transit systems; $5 billion for TIGER-like competitive grants; $4 billion for high-speed rail projects, $3 billion for aviation improvements; and $10 billion for an infrastructure bank.</p>
<p><em>Image above: Albany-Rensselaer Station, set to receive aid from the Federal Railroad Administration for improvements, from <a href="http://www.flickr.com/photos/mava/5161602150/">Flickr user mava</a> (cc).</em></p>
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		<title>With Diminished Expectations, President Obama Renews Attempt to Expand Transportation Financing</title>
		<link>http://www.thetransportpolitic.com/2011/09/09/with-diminished-expectations-president-obama-renews-attempt-to-expand-transportation-financing/</link>
		<comments>http://www.thetransportpolitic.com/2011/09/09/with-diminished-expectations-president-obama-renews-attempt-to-expand-transportation-financing/#comments</comments>
		<pubDate>Fri, 09 Sep 2011 05:24:32 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Congress]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[President]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=9054</guid>
		<description><![CDATA[<p>» Major components of the President&#8217;s American Jobs Act include direct grants for improved transportation and an infrastructure bank.</p>
<p>A year and two months away from the United States&#8217; next big election, politics in Washington are at a virtual standstill, with Democrats and Republicans completely at odds with one another when it comes to government policies. The situation has aggravated an already difficult funding situation for the nation&#8217;s transportation, which lacks an adequate funding source and faces a murky future. Meanwhile, the unemployment situation worsens.</p>
<p>President Obama&#8217;s speech tonight, in which he introduced a proposed American Jobs Act, was designed to stake a strong <p><a href="http://www.thetransportpolitic.com/2011/09/09/with-diminished-expectations-president-obama-renews-attempt-to-expand-transportation-financing/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p><strong>» Major components of the President&#8217;s American Jobs Act include direct grants for improved transportation and an infrastructure bank.</strong></p>
<p>A year and two months away from the United States&#8217; next big election, politics in Washington are at a virtual standstill, with Democrats and Republicans completely at odds with one another when it comes to government policies. The situation has aggravated an already difficult funding situation for the nation&#8217;s transportation, which lacks an adequate funding source and faces a murky future. Meanwhile, the unemployment situation worsens.</p>
<p>President Obama&#8217;s speech tonight, in which he introduced a proposed <a href="http://www.whitehouse.gov/the-press-office/2011/09/08/fact-sheet-american-jobs-act">American Jobs Act</a>, was designed to stake a strong ground in opposition to the anti-investment GOP. In addition to a number of other policies, it promoted transportation investment as a great opportunity for reducing the rate of joblessness and improving the sometimes miserable condition of the country&#8217;s highways, rail, and transit. While the speech is unlikely to result in much Congressional action &#8212; Republicans do not seem inclined to support any of the President&#8217;s initiatives &#8212; it came across as thoughtful and in line with the nation&#8217;s great economic needs of the moment.</p>
<p>For transportation, the bill would direct $50 billion to the construction of highways, transit, rail, and aviation. Another measure would deposit $10 billion into an infrastructure bank. Both funds would identify and sponsor the projects most likely to spur job growth as quickly as possible. Though the proposal was not laid out in further detail tonight, it represented another variation of the ramp-up in investments in transportation the Obama Administration has been attempting to promote for several years now.</p>
<p>Even so, the project was a clear step back from the <a href="http://www.thetransportpolitic.com/2011/02/14/president-obama-proposes-major-funding-increases-reorganization-for-nations-transport/">far more ambitious proposals Mr. Obama made at the beginning of the year</a>, when he suggested directing $70.4 billion to highways, $18.5 billion to transit grants, and $8.0 billion to high-speed rail in 2012 alone.</p>
<p>In response to the President&#8217;s new plans, House Majority Leader Eric Cantor (R-VA) <a href="http://www.nytimes.com/2011/09/09/us/politics/09scene.html?hp">criticized him</a> for being unwilling to describe how the investments would be paid for, evidently unwilling to accept the Keynesian evidence that in difficult economic periods it is a good idea for governments to use deficit funding to support the economy. Chair of the House Transportation and Infrastructure Committee John Mica (R-FL) <a href="http://thehill.com/blogs/transportation-report/highways-bridges-and-roads/180481-gop-chairman-opposes-obamas-call-for-national-infrastructure-bank">immediately articulated a position</a> against the plans for the infrastructure bank, arguing that states should take on the responsibility.</p>
<p>Just yesterday, the Republican leaders of the House Appropriations Committee <a href="http://appropriations.house.gov/News/DocumentSingle.aspx?DocumentID=258659">unveiled their proposals</a> for massive reductions in spending at the U.S. Department of Transportation, reducing highway expenditures to $27.7 billion in 2012 (from $41.8 billion in 2011) and transit formula spending to $5.2 billion (from $8.3 billion). No new New Start or Small Start transit capital grants would be funded. The high-speed rail program, which had once been one of Mr. Obama&#8217;s signature policies, would be entirely cut. These are austerity measures completely out of step with an economy desperately in need of stimulus, job creation, and infrastructure improvements.</p>
<p>Alternatives to Mr. Obama&#8217;s plan that would continue to limit transportation funding from the federal government have little credibility &#8212; at least if we believe that keeping the nation&#8217;s mobility networks in a condition of acceptable repair is an important national goal. States have limited ability to increase their indebtedness, and the cutbacks that have followed the recession have demonstrated that governors and state legislatures have been almost universally unwilling (or unable) to invest their own funds to shore up their roads and transit lines &#8212; in spite of a decline in support from D.C.</p>
<p>At this point, with a Congress that has now dithered on the matter of transportation funding for <a href="http://action.smartgrowthamerica.org/p/dia/action/public/?action_KEY=3934">709 days</a>, the President&#8217;s proposal is about as good as it gets. That doesn&#8217;t mean, however, that it has any chance of making it into law.</p>
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		<title>Spurring Jobs through Infrastructure?</title>
		<link>http://www.thetransportpolitic.com/2011/09/02/spurring-jobs-through-infrastructure/</link>
		<comments>http://www.thetransportpolitic.com/2011/09/02/spurring-jobs-through-infrastructure/#comments</comments>
		<pubDate>Fri, 02 Sep 2011 14:40:35 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Congress]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[Infrastructure]]></category>
		<category><![CDATA[President]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=9044</guid>
		<description><![CDATA[<p>» President Obama plans to launch a major jobs initiative next week, and it will likely include an effort to expand spending on infrastructure. But is that the right policy approach?</p>
<p>The Obama Administration&#8217;s planned announcement of a jobs stimulus will not be welcomed by the anti-investment Republicans in Congress, but in a country desperate for jobs and with disintegrating infrastructure, it seems wholeheartedly necessary. Throughout his Presidency, Mr. Obama has argued strongly for using federal funds for upgrading the nation&#8217;s highways and transit networks, so he seems likely to further his push for federal expenditures on capital programs such as these.</p>
<p>What <p><a href="http://www.thetransportpolitic.com/2011/09/02/spurring-jobs-through-infrastructure/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p><strong>» President Obama plans to launch a major jobs initiative next week, and it will likely include an effort to expand spending on infrastructure. But is that the right policy approach?</strong></p>
<p>The Obama Administration&#8217;s <a href="http://www.nytimes.com/2011/09/02/us/politics/02assess.html">planned announcement</a> of a jobs stimulus will not be welcomed by the anti-investment Republicans in Congress, but in a country <a href="http://www.nytimes.com/2011/09/03/business/economy/united-states-showed-no-job-growth-in-august.html">desperate for jobs</a> and with disintegrating infrastructure, it seems wholeheartedly necessary. Throughout his Presidency, Mr. Obama has argued strongly for using federal funds for upgrading the nation&#8217;s highways and transit networks, so he seems likely to further his push for federal expenditures on capital programs such as these.</p>
<p>What the proposals likely will not match are the <a href="http://www.thetransportpolitic.com/2011/02/14/president-obama-proposes-major-funding-increases-reorganization-for-nations-transport/">hundreds of billions of dollars for all sorts of mobility-enhancing programs over the next few years</a> the Administration promoted with great fanfare this spring, only have them fall apart as it became clear that the White House had no proposal for <em>actually funding</em> the program and the country became obsessed with a <a href="http://www.washingtonpost.com/blogs/ezra-klein/post/an-opportunity-we-cant-afford-to-miss/2011/08/25/gIQAHtWPpJ_blog.html?wprss=ezra-klein">completely wrong-headed</a> effort to cut the deficit. More recently, Mr. Obama&#8217;s big dreams of an Eisenhower-like infrastructure effort seem to have collapsed almost entirely: This week&#8217;s news that he will back an <a href="http://dc.streetsblog.org/2011/08/31/president-obama-pushes-congress-for-a-clean-extension-of-transpo-bill/">effort to extend</a> the existing transportation funding program rather than immediately expand it because of a lack of agreement in Congress about where to go from here suggests that he understands the limitations of his bully pulpit.</p>
<p>Is that such a bad thing, especially if states and cities <a href="http://www.thetransportpolitic.com/2011/08/15/in-atlanta-and-seattle-hope-for-better-transit-through-referendums/">play a more significant role in funding their own transportation programs</a>? Would Washington be doing the most with its limited funds by continuing to invest in infrastructure, or should it focus on direct service provision?</p>
<p>The stimulus bill passed in early 2009 did increase the number of jobs available; while it was not perfect, the current weakness in the economy is more a result of that original legislation being too small than a reflection of poor government decision-making. A new jobs-centered stimulus would likely improve the unemployment situation and expand the economy as a whole.</p>
<p>While the stimulus made a number of major investments in infrastructure possible &#8212; <em>virtually all</em> of the nation&#8217;s recent spending on intercity rail and the advancement of several major transit capital projects &#8212; it did so as transit agencies were suffering tremendously from the consequences of declining local tax receipts. While cities could spend hundreds of millions of dollars on new rail lines paid for mostly by Washington, hiring thousands of construction workers, they were forced to cut back on essential pre-existing transit routes mostly funded by municipal taxes and fire thousands of drivers, maintenance workers, and other service-providing personnel. For the jobs situation, this environment was decidedly mixed. For the transit-using customer, the environment arguably got worse because most of those capital investments will only pay off years from now.</p>
<p>If President Obama is serious about investing in a proposal that not only increases the number of jobs available but produces a valuable benefit for the public, a focus on paying for transit service rather than infrastructure could arguably be the best approach. By ensuring that public transportation agencies are able to provide adequate, day-to-day bus and rail operations, the federal government would be not only guaranteeing fewer job losses in the public sector (local governments have lost about 500,000 jobs since the official end of the recession) but also making it more feasible for the average person to rely on transit, since increasing frequencies makes it far more appealing.</p>
<p>Some might argue that the federal government should not be getting involved with the subsidy of local transit services, since this would set a dangerous precedent in which municipalities are unable to fend for themselves. But imagine a shift in which Washington takes over far <a href="http://www.thetransportpolitic.com/2010/06/11/reversing-roles-should-washington-cover-operations-costs/">more of the costs of operations, and localities assume the obligations for capital expenses</a>. For the average rider, dependent on transit service recession or not, this would be an improvement, since the federal government is able to assume a deficit during economic declines, while local governments are not.</p>
<p>For sure, at the moment <a href="http://www.thetransportpolitic.com/2011/08/07/two-light-rail-extensions-for-salt-lake-with-more-on-the-way/">big improvements like new rail lines</a> are unlikely to be pursued just about anywhere in the United States without an infusion of new dollars from the feds. With its large receipts from the nationwide gas tax, Washington is able to distribute funds to projects across the country and allow construction to occur far more quickly than would be possible were states and localities to go at it alone. The use of federal funds prevents a fight to the bottom in which a competition over lower and lower taxes intended to attract business from other parts of the country create a less-than-optimal provision of public services. In addition, the concept that the federal government is the primary investor in the funding of roads and transit projects is too engrained for a quick transition to another model.</p>
<p>But for the sake of actually spurring job creation and providing the types of services people need, a transition of federal government spending priorities away from capital projects and towards transit operations could be an important step forward.</p>
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		<title>For Federal Transportation Investment, a Difficult Prognosis</title>
		<link>http://www.thetransportpolitic.com/2011/07/07/for-federal-transportation-investment-a-difficult-prognosis/</link>
		<comments>http://www.thetransportpolitic.com/2011/07/07/for-federal-transportation-investment-a-difficult-prognosis/#comments</comments>
		<pubDate>Thu, 07 Jul 2011 21:59:05 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Congress]]></category>
		<category><![CDATA[DOT]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[Infrastructure]]></category>
		<category><![CDATA[Los Angeles]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=8902</guid>
		<description><![CDATA[<p>» A new plan for the country&#8217;s transportation financing system from Congressman John Mica would cut spending significantly &#8212; but Democrats have yet to provide a serious counter-proposal.</p>
<p>With everyone from Mitch McConnell to Barack Obama arguing &#8212; no matter the evidence to the contrary &#8212; that the federal budget must be constrained in order to save the American economy, it is perhaps no surprise that the long-expressed hopes of a greatly expanded transportation bill have fallen to the wayside.</p>
<p>The revealing today of House Transportation and Infrastructure Committee Chair John Mica&#8217;s (R-FL) plan for a six-year, $230 billion reauthorization bill is the <p><a href="http://www.thetransportpolitic.com/2011/07/07/for-federal-transportation-investment-a-difficult-prognosis/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p><strong>» A new plan for the country&#8217;s transportation financing system from Congressman John Mica would cut spending significantly &#8212; but Democrats have yet to provide a serious counter-proposal.</strong></p>
<p>With everyone from <a href="http://krugman.blogs.nytimes.com/2011/07/06/all-greek-to-him/">Mitch McConnell</a> to <a href="http://krugman.blogs.nytimes.com/2011/07/06/the-obama-keynes-mystery/">Barack Obama</a> arguing &#8212; no matter the evidence to the contrary &#8212; that the federal budget must be constrained in order to save the American economy, it is perhaps no surprise that the long-expressed hopes of a greatly expanded transportation bill have fallen to the wayside.</p>
<p>The revealing today of House Transportation and Infrastructure Committee Chair John Mica&#8217;s (R-FL) plan for a six-year, $230 billion reauthorization bill is the latest evidence that support in Congress for expanded investment in the U.S. transport network is weak. Though the bill is by no means final &#8212; Senate Environment and Public Works Committee Chair Barbara Boxer (D-CA)&#8217;s own two-year plan, slightly larger (and with $12 billion in missing revenues), was <a href="http://dc.streetsblog.org/2011/07/06/boxertwo-year-transpo-bill-will-save-600000-jobs/">partially revealed yesterday</a> &#8212; the writing is on the wall: At least for now, expecting any improvement in federal funding for transit or even highway programs is unrealistic.</p>
<p>The current federal transportation authorization legislation, SAFETEA-LU, has already been extended several times and will expire on September 30th this year.</p>
<p><a href="http://transportation.house.gov/News/PRArticle.aspx?NewsID=1337">Mr. Mica&#8217;s proposal</a> would provide $35 billion for surface transportation in fiscal year 2012, rising to $42 billion in 2017. Existing funding provides $51.5 billion, so this would represent a draconian <em>one-third</em> cut in federal spending so that expenditures on transportation match the funding received from federal fuel taxes. It has been <a href="http://www.thetransportpolitic.com/2010/11/23/a-new-political-reality-settling-in-for-national-transportation-financing/">clear since last November</a> that the GOP would push for this funding cut once it took control of the House.</p>
<p>Mr. Mica argues that a loosening up of red tape and increasing private investment would make up the difference, a questionable assumption.</p>
<p>The specific distribution of funds to transit or highways has not been enumerated, but the current shares (about 20% for transit and 80% for highways) will be maintained. This would mean a cut from <a href="http://www.thetransportpolitic.com/2010/02/01/obama-introduces-proposed-fy-2011-budget-transportation-appropriations-stay-largely-intact/">about $11 billion for transit today</a> to about $7 billion. What does this mean? Fewer dollars in the <a href="http://fta.dot.gov/funding/grants/grants_financing_3561.html">urban formula program</a> means fewer new buses and rail cars for transit agencies across the country. Less money for <a href="http://www.fta.dot.gov/about/about_FTA_8986.html">state of good repair</a> means a decline in the number of renovations of aging railway tunnels and viaducts or bus depots. A loss for the <a href="http://www.fta.dot.gov/planning/planning_environment_5221.html">New Starts program</a> means the end of several major capital expansion projects nationwide.</p>
<p>The Administration&#8217;s high-speed rail program, already under siege by a <a href="http://www.answers.com/topic/siderodromophobia-1">siderodromophobic</a> GOP, is axed in the proposal. <a href="http://fta.dot.gov/publications/publications_10935.html">Livability grants</a>, too fuzzy for the mobility-oriented Mr. Mica, also appear to have been taken out of funding consideration.</p>
<p>Compared to the heady days of early 2009, during which the Congress approved billions of dollars in additional funding for transportation in the stimulus bill, this represents quite a turnaround. And even early this year, President Obama announced that he would push for a <a href="http://www.thetransportpolitic.com/2011/02/14/president-obama-proposes-major-funding-increases-reorganization-for-nations-transport/">$556 billion six-year transportation bill</a> that would more than double annual national expenditures on public transportation (he wanted $128 billion in 2012 alone) and introduce significant support for a high-speed rail program. Though Mr. Obama <a href="http://online.wsj.com/article/SB10001424052702303544604576430314142653944.html?mod=googlenews_wsj">continues to articulate support</a> for a major infrastructure initiative, he has been unable to put forward a proposal that would <em>fund</em> such a project.</p>
<p>Democrats, sitting in the minority on the House Transportation and Infrastructure Committee, were <a href="http://democrats.transportation.house.gov/press-release/committee-democrats-respond-republican-surface-transportation-proposal">quick to lambaste the proposal</a>. They argued that the significant reduction in spending on transportation that the Mica proposal would entail would result in a significant loss of jobs. And indeed they would. But in Washington, where the mood has shifted sharply away from the idea that government might be able to aid the advancement of the economy, even these committee Democrats were unwilling to propose a funding mechanism that would actually finance the bill they would introduce if they were able.</p>
<p>This is ultimately the handicap that has restrained any increase in expenditures on transportation; as is made explicitly clear <a href="http://republicans.transportation.house.gov/Media/file/112th/Highways/Reauthorization_document.pdf">in the document</a> that adjoined the bill, the Highway Trust Fund &#8212; the fuel tax-filled bank account that finances surface transportation in this country &#8212; is broke, and the situation is worsening. While it might make sense for Mr. Obama and Ms. Boxer to propose larger bills simply because the country&#8217;s infrastructure is in a deplorable condition, without any way to finance them, how can they be approved by the Congress? Both have relied on promises of future &#8220;revenue sources&#8221; but ruled out an increase in the gas tax or the implementation of a vehicle miles-traveled fee. When cherished entitlement programs are <a href="http://www.nytimes.com/2011/07/08/us/politics/08fiscal.html?hp=&amp;pagewanted=all">on the cutting block</a> because of a general unwillingness to expand the nation&#8217;s debt, how can an increase in the deficit to pay for transportation be defended?</p>
<p>Stuck with limited resources, then, Mr. Mica&#8217;s bill is the only approach that seems realistic. But even ignoring the overall spending amounts, the bill is quite problematic.</p>
<p>Though Mr. Mica&#8217;s specific approach is not yet apparent since the full legislation has yet to be released, the bill outline does state that &#8220;<em>The percentage of available formula funds for transit programs that benefit suburban and rural areas</em>&#8221; would be increased. The low down: Urban transit systems &#8212; the agencies that serve the vast majority of transit users &#8212; would suffer the ridiculous indignity of having their already smaller pot of funds be cut even further to benefit the less cost-effective, least valuable public transportation systems.</p>
<p>Eliminating red tape in the federal approval process is another of Mr. Mica&#8217;s priorities, and indeed, there may currently be more studies and years required to move forward with a transportation project than necessary. But it is difficult to believe that cutting off a few years from the planning process for new road or transit projects will make up for billions of dollars in lost financing for new buses or trains.</p>
<p>Bemoaning the lack of funding for transit and transportation in general is a worthwhile endeavor, but the real challenge continues to be whether any significant group of politicians of any stripe can be convinced of the need for revenue generators. In other words, without new taxes to fund the transportation program, the argument that the nation&#8217;s infrastructure is inadequate will never really matter.</p>
<p>If leaders in Washington have failed to advance on these matters, local and state leadership could fill the gap &#8212; if they so desire.</p>
<p>Though Mr. Mica&#8217;s bill would not introduce an infrastructure bank (one of Mr. Obama&#8217;s repeated goals since he entered office), it would expand funding for TIFIA grants and loans, offered by the <a href="http://www.fhwa.dot.gov/ipd/tifia/">Transportation Infrastructure Finance and Innovation Act</a>. One billion dollars would be appropriated annually to use federal dollars to leverage private-sector investments, which would then be paid back either through user-generated fees or dedicated taxes applied at the local level.</p>
<p>The value of this approach was demonstrated yesterday, when Los Angeles announced that it <a href="http://thesource.metro.net/2011/07/06/westside-subway-extension-receives-640-million-federal-loan/">had received</a> a $640.8 million low-interest TIFIA loan to begin work on its Westside Subway project. The money will eventually be paid back by sales tax receipts collected in L.A. County over the next 30 years. The extension, which would bring trains eight miles from the existing Wilshire/Western station to the V.A. Hospital in Westwood, will cost a total of $5.3 billion, so the loan is just a starting point, but it is a good one, since if all financing is lined up, it will allow completion in 2022, instead of 2036, the soonest possible without any sort of loan.</p>
<p>Would this program, in association with Mr. Mica&#8217;s plan to open newly built federally funded Interstate highways to tolling, be enough to &#8220;double&#8221; funding for transportation, as he has suggested? It seems unlikely &#8212; at least in the long term. While the TIFIA loans will make it possible to advance construction more quickly, they will have to be paid back eventually, using local sales taxes &#8212; which won&#8217;t be usable for projects twenty years from now. Some private investors may choose to jump on board, but getting private sources to contribute to public transit projects <em>while saving money overall</em> has been a <a href="http://www.thetransportpolitic.com/2010/05/11/london-undergrounds-privatization-experiment-dead-as-remaining-ppp-is-bought-out/">notoriously difficult process in our day and age</a>.</p>
<p>Mr. Mica&#8217;s proposal is not the law yet, but more endowed alternatives to it have yet to have their funding sources adequately described by Congresspeople willing to raise the specter of increasing taxes. We&#8217;re waiting.</p>
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		<title>Are Private Operations on the Northeast Corridor the Means to an End, or Just an End?</title>
		<link>http://www.thetransportpolitic.com/2011/06/17/are-private-operations-on-the-northeast-corridor-the-means-to-an-end-or-just-an-end/</link>
		<comments>http://www.thetransportpolitic.com/2011/06/17/are-private-operations-on-the-northeast-corridor-the-means-to-an-end-or-just-an-end/#comments</comments>
		<pubDate>Fri, 17 Jun 2011 06:32:44 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Amtrak]]></category>
		<category><![CDATA[Congress]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[Northeast Corridor]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=8858</guid>
		<description><![CDATA[<p style="text-align: center;"></p>
<p>» Without a commitment of more federal funds for improvement, an initiative to transfer rights to private entities to operate trains along the Northeast Corridor would not accomplish much.</p>
<p>In order to take advantage of the roadways effectively, bus drivers &#8212; not to mention car drivers &#8212; do not need to take possession of said roads. Indeed, they need only to be in possession of a vehicle that can navigate along the streets and be able to pay for fuel, part of whose cost returns to cover many of the expenses required to build and maintain the roads. Many different <p><a href="http://www.thetransportpolitic.com/2011/06/17/are-private-operations-on-the-northeast-corridor-the-means-to-an-end-or-just-an-end/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p style="text-align: center;"><img class="aligncenter size-full wp-image-8860" title="New Haven Station" src="http://www.thetransportpolitic.com/wp-content/uploads/2011/06/New-Haven-Station.png" alt="" width="540" height="355" /></p>
<p><strong>» Without a commitment of more federal funds for improvement, an initiative to transfer rights to private entities to operate trains along the Northeast Corridor would not accomplish much.</strong></p>
<p><strong></strong>In order to take advantage of the roadways effectively, bus drivers &#8212; not to mention car drivers &#8212; do not need to take possession of said roads. Indeed, they need only to be in possession of a vehicle that can navigate along the streets and be able to pay for fuel, part of whose cost returns to cover many of the expenses required to build and maintain the roads. Many different vehicles, owned by many different people or organizations, can share the roads, usually without problems. Sometimes, there are accidents, which can be mostly avoided through proper design of the roadways, and there is sometimes congestion, which can be relieved through road fees. Fundamentally, the system works: There are vehicle owners, usually private individuals, and there are infrastructure owners, usually the public sector, and they get along fine.</p>
<p>All of this, I know, is obvious. But when it comes to rail transportation, this formula has been avoided, especially in the U.S. The owner of railroad tracks usually is also the operator of trains along them. When other operators want to move their own trains in, conflicts typically erupt. The <a href="http://www.detnews.com/article/20110615/METRO05/106150358/1409/metro/Amtrak-passengers-to-face-slower-rides-on-Detroit-Chicago-line">frequent disagreements</a> about acceptable service levels between national rail operator Amtrak and freight railroads on tracks that the latter owns (and which it isn&#8217;t very happy to share) are indicative of this problem.  But these disagreements are not irreconcilable. Indeed, an infrastructure owner that is able to arbitrate between competing operators could be more effective in producing efficient service for everyone than might be an owner-operator, which discriminates against other operators.</p>
<p>In this context, yesterday&#8217;s <a href="http://republicans.transportation.house.gov/News/PRArticle.aspx?NewsID=1310">revealing of</a> House Transportation and Infrastructure Committee Chairman John Mica&#8217;s (R-FL) plan for the Northeast Corridor raises a number of interesting questions. Convinced of the value of private sector competition and promoting a pull-out of the federal government from every public service imaginable, Mr. Mica has submitted a proposal that attempts to re-imagine the Northeast Corridor, Amtrak&#8217;s flagship route and the nation&#8217;s most-traveled intercity rail line, as a place where, fundamentally, the rules of the road &#8212; but not the railroad &#8212; could apply.</p>
<p>The bill (<a href="http://republicans.transportation.house.gov/Media/file/112th/Railroads/Rail_Competition_Bill_Discussion_Draft.pdf">draft text</a>) <a href="http://republicans.transportation.house.gov/Media/file/112th/Railroads/Rail_Competition_Bill_Section_by_Section.pdf">would force</a> Amtrak to abandon its control of (much of) the Northeast Corridor between Washington and Boston, handing it over to the Department of Transportation, which in turn would lease it to an &#8220;Executive Committee.&#8221; Amtrak would have to give up all of its assets and it would loose federal funding. The Committee, in charge of infrastructure and setting pricing policies, would then engage a public-private partnership (PPP) with a private group, which would commit to upgrading the line and then operating trains to offer two-hour trips between New York and Washington and 2h30 between New York and Boston &#8212; within ten years, twenty years more quickly <a href="http://www.thetransportpolitic.com/2010/09/28/amtrak-unveils-ambitious-northeast-corridor-plan-but-it-would-take-30-years-to-be-realized/">than Amtrak has said it would</a> be able to make roughly the same improvements.</p>
<p>Mr. Mica also claims that this could be done at a cheaper price than Amtrak&#8217;s $117 billion proposal.</p>
<p>Outside of the Northeast, states would have to offer their rail corridors to competitive bidding; current subsidies to Amtrak would simply be redistributed to the winners of those operations bids.</p>
<p>Despite the wide-ranging proposed effects of the bill as summarized, the manner in which any of this would be implemented remains incredibly unclear. How would intercity rail operators interact with the freight and commuter railroads that also use the tracks, in the Northeast and elsewhere? If a PPP were implemented, how much would the government agree to commit to pay for improvements?</p>
<p>Unfortunately, the bill would not provide a realistic way to promote true operational competition. Nor does it would it offer a promise of actual federal support to fund an upgrade of the corridor, which seems unlikely to be sponsored by private entities alone. Most problematic would be the transfer of authority over the line&#8217;s management to the currently non-existant Executive Committee, whose ability to make decisions about rail properties has yet to be tested, let alone proven.</p>
<p>Fortunately, the proposal is unlikely to make it through the Senate, where Democrats and other Republican supporters of Amtrak are likely to prevent the bill from passing even if it makes it through the House. The American intercity rail system and the governance bodies that oversee it at the federal and state levels are too underdeveloped to be able to guarantee that this semi-privatization wouldn&#8217;t be a disaster.</p>
<p>But Mr. Mica&#8217;s bill does articulate a number of policy changes that could play an important role in shoring up passenger service in the Northeast. The status quo, in which Amtrak operates relatively infrequent and slow passenger trains within the nation&#8217;s most important megaregion, certainly is not ideal.  If managed appropriately, the separation of track ownership and line operations could allow for a situation in which multiple operators offer competing services along the same routes, just as Megabus and Bolt Bus compete for the most customers on I-95.</p>
<p>In mainland Europe, E.U. regulations have mandated that national rail companies like France&#8217;s SNCF or Germany&#8217;s DB <a href="http://www.thetransportpolitic.com/2010/08/30/european-transport-agencies-consolidate-intercity-rail-operations-in-face-of-competition/">allow other operators (in many cases, SNCF and DB affiliates)</a> to run trains between similar destinations. Though I am <a href="http://www.thetransportpolitic.com/2010/03/02/as-sncf-loses-its-public-focus-the-future-of-french-rail-is-in-question/">not convinced that this will produce universally positive results</a>, it will at least likely result in lower fares for customers on the most heavily trafficked rail corridors.  And focusing on the most-used lines is clearly Mr. Mica&#8217;s goal; according to the bill, the second-highest stated priority for potential investors are &#8220;<em>activities that benefit the greatest number of passengers</em>&#8221; (just after safety). Amtrak&#8217;s current policies do not exactly fit that bill since they are designed to push lower-income individuals (like myself) onto slower and less comfortable intercity buses.</p>
<p>Yet the Mica proposal would not produce true competition in rail operations. It would encourage competition in rail operations <em>contracts</em>.  Rather than invest in the infrastructure and then open up the rights to use tracks, the PPP structure as proposed would be a build-operate-maintain system in which one private group would invest in improvements and then have control over operations, which it would perform itself. Mr. Mica has repeatedly referred to Amtrak as a &#8220;Soviet-Style&#8221; system because it has a monopoly over its services, but it is hard to see how a PPP extended over a long contract would be any different, except that it would charge even higher prices to make up for the initial cost of capital improvements and &#8212; even worse &#8212; it would be literally banned from cross-subsidizing other services with the profits, according to the proposed bill. <a href="http://www.thetransportpolitic.com/2011/05/31/discussing-privatization-of-the-northeast-corridor-but-for-what-aims/">Is this in the public interest</a>?</p>
<p>The biggest question of all, though, is whether Mr. Mica is in complete denial about the extent of either the private sector&#8217;s ingenuity or their collective willingness to invest in public infrastructure. While it may sound nice, asserting that corporations can rebuild the Northeast Corridor in 10 years at a far lower cost to the taxpayers than Amtrak has proposed could is a stretch. And even a $50 billion upgrade would be larger than any single private investment in infrastructure ever in the U.S. What evidence does Mr. Mica have that a plan like this could move forward?</p>
<p><em>Image above: Inside New Haven&#8217;s station along the Northeast Corridor, from <a href="http://www.flickr.com/photos/ciscel/1636169456/">Flickr user Andrew Ciscel</a> (cc)</em></p>
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		<title>Discussing Privatization of the Northeast Corridor, but for What Aims?</title>
		<link>http://www.thetransportpolitic.com/2011/05/31/discussing-privatization-of-the-northeast-corridor-but-for-what-aims/</link>
		<comments>http://www.thetransportpolitic.com/2011/05/31/discussing-privatization-of-the-northeast-corridor-but-for-what-aims/#comments</comments>
		<pubDate>Tue, 31 May 2011 06:13:07 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Amtrak]]></category>
		<category><![CDATA[Congress]]></category>
		<category><![CDATA[Finance]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=8806</guid>
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<p>» House Republicans suggest putting Amtrak&#8217;s primary line up for bids, but faith in the private sector is not enough to promote this change.</p>
<p>House Representative John Mica, a conservative Republican from central Florida and the Chairman of the Committee on Transportation and Infrastructure, has been berating Amtrak for years, so his announcement last week that he would promote the privatization of the Northeast Corridor comes as no surprise.</p>
<p>With Democrats still in control of the Senate and a Republican Party history of bringing up the issue and then promptly giving up in the 1980s and 90s &#8212; even when the <p><a href="http://www.thetransportpolitic.com/2011/05/31/discussing-privatization-of-the-northeast-corridor-but-for-what-aims/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p style="text-align: center;"><img class="aligncenter size-full wp-image-8823" title="30th Street" src="http://www.thetransportpolitic.com/wp-content/uploads/2011/05/30th-Street.png" alt="" width="540" height="330" /></p>
<p><strong>» House Republicans suggest putting Amtrak&#8217;s primary line up for bids, but faith in the private sector is not enough to promote this change.</strong></p>
<p>House Representative John Mica, a conservative Republican from central Florida and the Chairman of the Committee on Transportation and Infrastructure, has been berating Amtrak for years, so his announcement last week that he would promote the privatization of the Northeast Corridor comes as no surprise.</p>
<p>With Democrats still in control of the Senate and a Republican Party history of bringing up the issue and then promptly giving up in the 1980s and 90s &#8212; even when the GOP has <a href="http://www.nytimes.com/1987/01/06/us/reagan-sends-1-trillion-budget-to-congress-and-battle-is-joined.html?scp=3&amp;sq=bob+dole+amtrak&amp;st=cse&amp;pagewanted=all">controlled the Presidency</a> or <a href="http://www.nytimes.com/1995/01/15/opinion/getting-our-train-to-run-on-time.html?scp=1&amp;sq=bob%20dole%20amtrak&amp;st=cse">both houses of the Congress</a> &#8212; any such plan is unlikely to move forward. Yet the question of the privatization of intercity railway operations in the United States will play a role in future debates, especially if the federal government continues to invest in new and improved rail networks. This may be the opening salvo in a years-long argument.</p>
<p>Before stepping into that, though, we need an honest discussion about the goals of the railway system and that of the transportation network in general. Is it there to generate profit for a small number of private corporations, or to ensure alternative mobility options to the largest possible percentage of the population? Should its operations be ultimately determined by surface-level profitability, or by public and political consensus?</p>
<p>Mr. Mica&#8217;s recent denunciations of the national railroad have come across as downright dogmatic: So convinced of the failures of Amtrak, he has been referring to it as a &#8220;Soviet-style&#8221; railroad. The committee <a href="http://republicans.transportation.house.gov/Media/file/112th/Railroads/2011-05-26-Amtrak_Ridership_Chart.pdf">released a chart</a> showing little growth in Amtrak ridership along the corridor over the past thirty years to back up this notion.* Thus the committee chair&#8217;s privatization argument, founded in the broader modern conservative logic that claims &#8212; whatever the evidence suggests &#8212; that anything that the public sector does, the private sector can do better. For Mr. Mica, who is an <a href="http://www.thetransportpolitic.com/2010/11/04/understanding-representative-john-micas-transportation-agenda/">adamant supporter of high-speed rail</a> between Boston and Washington, this means that Amtrak&#8217;s current ownership of the Northeast Corridor is a stumbling block in the way of progress.</p>
<p>Instead of <a href="http://www.thetransportpolitic.com/2010/09/28/amtrak-unveils-ambitious-northeast-corridor-plan-but-it-would-take-30-years-to-be-realized/">Amtrak&#8217;s 30-year, $117 billion proposal</a> to build a new true high-speed link along the East Coast, Mr. Mica would <a href="http://thehill.com/blogs/transportation-report/railroads/163597-dems-unions-speak-up-for-amtrak-in-the-fight-over-national-rail-plan">produce the same benefits</a> &#8220;<em>in half the time and at significantly less cost</em>,&#8221; thanks to private sector participation, which <a href="http://transportation.house.gov/News/PRArticle.aspx?NewsID=1280">would be involved</a> in building, designing, and operating the new system. His committee has yet to release any information showing how this could work.**</p>
<p>Avoiding the complicated issue of construction and focusing on operations alone, the committee <a href="http://republicans.transportation.house.gov/Media/file/112th/Railroads/2011-05-26-Amtrak_Virgin_Rail_Chart.pdf">compared</a> Amtrak&#8217;s performance with that of Virgin Trains, which has since 1997 held the contract to operate the United Kingdom&#8217;s West Coast Main Line, connecting London with Birmingham, Manchester, and other cities. Mr. Mica made the claim that Virgin had been operationally profitable and been able to pay the government usage fees, compared to Amtrak, which he noted was subsidized. The U.K., which began the privatization of its railroads in the early 1990s, is the model the Florida congressman seems to be interested in imitating: The general idea, like in Great Britain, <a href="http://www.bloomberg.com/news/2011-05-26/amtrak-may-come-under-more-direct-u-s-control-in-house-bill-2-.html">is to pull</a> the Northeast Corridor itself out of the hands of Amtrak and hand it over to a new track-owning entity under the auspices of the Department of Transportation (the fate of the track section not owned by Amtrak in New York and Connecticut is unclear). Then private operators, potentially including Amtrak, would be able to bid out for operations rights.</p>
<p>This was an odd comparison to make, not only because Amtrak is operationally profitable in the Northeast Corridor, but also because Virgin&#8217;s history of operating trains in the U.K. has not been scot-free. Though ridership has increased more than expected, on-time performance of Virgin trains <a href="http://en.wikipedia.org/wiki/Virgin_Trains">have never reached levels</a> above 90%. Instead of <a href="http://www.guardian.co.uk/business/2001/aug/24/transportintheuk?INTCMP=SRCH">paying £1 billion to the government</a> as originally planned in the contract, the company <a href="http://www.nao.org.uk/publications/0607/west_coast_main_line_upgrade.aspx">actually received</a> what were effectively £590 million in operating subsidies between 2002 and 2006, according to the National Audit Office (much of which was due to the government&#8217;s own poor contract writing).</p>
<p>And then there&#8217;s the fact that the U.K. government paid for most of the costs of the <a href="http://www.virgintrains.co.uk/assets/pdf/media-room/fact-sheet.pdf">£9 billion upgrade</a> to the West Coast Main Line that was completed in 2008. Can we compare Amtrak effectively to this history? The U.S. government certainly did not commit to a $15 billion upgrade of the Northeast Corridor over the past 15 years &#8212; in fact, the Northeast Corridor Master Plan, the last serious effort to improve the system, <a href="http://republicans.transportation.house.gov/Media/file/112th/Rail%20Briefing%20Memo%20%205-26-11.pdf">lasted between 1977 and 1998</a> and distributed only $6 billion to the line.</p>
<p>This is not to say that Virgin is a particularly bad example. Its peer companies have a <a href="http://www.guardian.co.uk/business/2011/may/15/west-coast-sale-delayed?INTCMP=SRCH">history of dropping their contracts</a> in order to avoid paying the government for the use of the railroad tracks. During the recession, <a href="http://www.thetransportpolitic.com/2009/11/10/privatization-in-the-uk-breaks-down-putting-neoliberal-ideology-into-question/">several private companies simply determined that they could not handle the agreements they had signed</a> just a few years before, putting several lines <a href="http://www.directlyoperatedrailways.co.uk/html/index.php">into public hands</a> (which now are <a href="http://www.directlyoperatedrailways.co.uk/PDF/DORAnnualReport2010.pdf">making a profit</a>). But these failures do not &#8220;prove&#8221; anything: There is no evidence that a public sector entity would have done the same job more effectively. A well-functioning government service provider would have passed any profits or shareholder dividends back to the user or the government, arguably the better outcome &#8212; but how can we be sure that it would be well-functioning?</p>
<p>The irony for Mr. Mica is that Amtrak, especially in the Northeast, has been acting much like a private, profit-motivated company would. The company has prioritized profitability in its operations over expanded ridership: The growth of intercity buses between the region&#8217;s largest cities has been met with little decrease in rail prices, and that&#8217;s because Amtrak knows it can fill its trains even at higher fares. The continued operational profitability of the corridor in the face of this competition is indicative of this fact.</p>
<p>Why, then, bring up the issue? Because the value of the nation&#8217;s rail system is established by the policymakers determining how to distribute grants or to whom to award service contracts, whether they be to public or private entities. Alon Levy <a href="http://pedestrianobservations.wordpress.com/2011/05/27/the-problem-is-the-fra-not-amtrak/">wrote pointedly last week</a> that the major handicap to improved performance in the Northeast is not Amtrak but rather the Federal Railroad Administration, which determines the regulations that govern the operations of the railways. Public or private, these rules would have to be followed.</p>
<p>If Mr. Mica&#8217;s ambition is to improve rail services, a reasonable path must evaluate the risks and benefits associated with different models of transport operations. This might mean transferring control of the infrastructure to an independent entity, or altering regulations, or even promoting some competitive bidding for the rights to operate in certain rail corridors.</p>
<p>But a goal of moving yet another service out of public hands and into private ones mostly for the sake of denouncing government as a concept is one that cannot be accepted. The surface-level comparison Mr. Mica made between Amtrak and Virgin Trains is indicative of the lack of serious thought that has been devoted to this conversation thus far. We need to evaluate and determine the national vision for our transportation system, and then move on from there.</p>
<p>* There was no mention of the fact that Amtrak&#8217;s capacity problems are mostly structural, stemming from track conflicts with commuter railroads and an <a href="http://www.thetransportpolitic.com/2011/02/15/breaking-down-the-department-of-transportations-proposed-2012-budget/">inability to buy new railcars</a> until recently. <strong><em>Update, 31 May:</em></strong> Ross Capon of the National Association of Railroad Passengers <a href="http://www.narprail.org/cms/index.php/news_releases/more/reactions_to_hearing_on_nec_privatization/">notes that</a> the decline in ridership cited by the committee was not accurate; the initial figures included New York to Philadelphia Clockers (turned over to New Jersey Transit in 2005) and trains between Philadelphia and Harrisburg, neither of which were included in the 2010 numbers. Comparing the same train service, Amtrak ridership on the Corridor increased from 7.7 million in 1981 to 10.4 million in 2010.</p>
<p>** Amtrak has recently announced that it will pursue partnerships with private investors on future improvements for the Corridor.</p>
<p><em>Image above: Amtrak Acela train, from <a href="http://www.flickr.com/photos/mocvdleung/880233843/">Flickr user Angelo Leung</a> (cc)</em></p>
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		<title>The New Congress Makes Its Claim on the Budget</title>
		<link>http://www.thetransportpolitic.com/2011/04/10/the-new-congress-makes-its-claim-on-the-budget/</link>
		<comments>http://www.thetransportpolitic.com/2011/04/10/the-new-congress-makes-its-claim-on-the-budget/#comments</comments>
		<pubDate>Sun, 10 Apr 2011 14:37:56 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Congress]]></category>
		<category><![CDATA[Finance]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=8685</guid>
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<p>» A compromise on the budget signals that the White House is not fully committed to an expansion in infrastructure investment.</p>
<p>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.</p>
<p>One thing it did indicate, though, was that of all federal funding commitments, those that affect cities most directly &#8212; in transportation and urban development &#8212; are most likely <p><a href="http://www.thetransportpolitic.com/2011/04/10/the-new-congress-makes-its-claim-on-the-budget/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p style="text-align: center;"><img class="aligncenter size-full wp-image-8687" title="Rail yards in Washington" src="http://www.thetransportpolitic.com/wp-content/uploads/2011/04/Rail-yards-in-Washington.png" alt="" width="540" height="333" /></p>
<p><strong>» A compromise on the budget signals that the White House is not fully committed to an expansion in infrastructure investment.</strong></p>
<p>The <a href="http://www.politico.com/news/stories/0411/52854.html">agreement</a> 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.</p>
<p>One thing it did indicate, though, was that of all federal funding commitments, those that affect cities most directly &#8212; in transportation and urban development &#8212; are most likely to be cut. Of the $2 billion pulled from the nation&#8217;s Fiscal Year 2011 budget last week, <a href="http://thehill.com/images/stories/blogs/flooraction/Jan2011/cutssummary.pdf">every cent was taken</a> 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&#8217;s budget, and once discussions begin on the 2012 budget, matters could be even worse.</p>
<p>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&#8217;s unwillingness to raise taxes or cut military spending &#8212; and the Democratic Party&#8217;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&#8217;s budget, which has been panned as actually <a href="http://krugman.blogs.nytimes.com/2011/04/09/serious/">likely to increase the budget deficit</a> whatever its putative aims, would <a href="http://switchboard.nrdc.org/blogs/dlovaas/ryans_budget_cuts_fail_to_fix.html">eliminate all spending</a> 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.</p>
<p>Compared to the Obama Administration&#8217;s budget, the Ryan proposal would <a href="http://nationalpriorities.org/media/uploads/publications/pres_budget_ryans_plan/obama_v._ryan.pdf">reduce transportation expenditures</a> 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 insistance on reducing spending on urban-focused programs: The <a href="http://www.thetransportpolitic.com/2011/01/25/understanding-the-republican-partys-reluctance-to-invest-in-transit-infrastructure/">Democratic Party has a virtual monopoly on urban congressional districts</a>, so when it is not in power, those areas suffer.</p>
<p>A caveat: Much of the funds cut last week, <a href="http://www.cahsrblog.com/2011/04/obama-caves-on-hsr-funds/">including $1.5 billion for high-speed rail</a> (leaving $1 billion in place), had yet to be obligated and thus arguably were not &#8220;cuts.&#8221; Another $280 million in New Starts money was eliminated, but those funds were supposed to go to the <a href="http://www.thetransportpolitic.com/2010/10/27/arc-project-definitively-cancelled-but-there-are-other-ways-to-improve-new-jerseys-transit-future/">ARC Tunnel, which was cancelled</a>. And the Administration&#8217;s proposed budget was never final, so making comparisons to it may be an unfair exercise.</p>
<p>But the point remains: Despite President Obama&#8217;s proposals for a <a href="http://www.thetransportpolitic.com/2011/02/14/president-obama-proposes-major-funding-increases-reorganization-for-nations-transport/">huge increase in transportation funding</a> 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&#8217;s roads and railways, Republicans are convinced that the country must remain &#8220;within its means,&#8221; which in their opinion means keeping federal transportation investments within the bounds of revenues collected by the Highway Trust Fund.</p>
<p>U.S. national spending on surface transportation has in recent years increased to about $50 billion annually. Relying on the Trust Fund alone <a href="http://www.americanprogress.org/issues/2011/04/ryan_infrastructure.html">would reduce that</a> 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 <a href="http://voices.washingtonpost.com/ezra-klein/CPC.Budget.112th.Memo.pdf">alternatives exist</a> that would increase federal investments in the nation&#8217;s infrastructure <em>and</em> that would reduce annual budget deficits has not made much of a dent on the right-wing atmosphere that is choking Washington.</p>
<p>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 href="http://articles.boston.com/2011-04-07/yourtown/29393603_1_infrastructure-freight-rail-broadband">a waste of funds</a>. 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&#8217;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.</p>
<p>Unwilling to actually make an argument in favor of a tax increase, Senators and Congresspeople have been <a href="http://dc.streetsblog.org/2011/03/31/strange-bedfellows-unite-for-infrastructure-investment-financing-tools/">falling over themselves</a> to endorse Los Angeles Mayor Antonio Villaraigosa&#8217;s American Fast Forward program, essentially a national version of <a href="http://www.thetransportpolitic.com/2010/10/16/l-a-s-3010-plan-advances-suddenly-with-a-546-million-loan-for-the-crenshaw-light-rail-project/">L.A.&#8217;s 30/10 scheme</a>. The effort would use federal guarantees to <a href="http://thesource.metro.net/2011/03/30/how-would-america-fast-forward-help-build-transit-see-the-nifty-graphic-below/">leverage private funds</a> 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.</p>
<p>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&#8217;s role is to invest in the nation&#8217;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&#8217;s important place in guaranteeing an equitable and appropriate distribution of resources.</p>
<p><em><span style="text-decoration: underline;">Update, 12 April</span></em>: The newest information from the U.S. House Appropriations Committee shows that there will be <a href="http://appropriations.house.gov/_files/41211SummaryFinalFY2011CR.pdf">no funding at all</a> for high-speed rail in Fiscal Year 2011. In addition, $400 million in money allocated last year will be rescinded. Though the TIGER program remains in place (with funding of $528 million). <a href="http://graphics8.nytimes.com/packages/pdf/politics/20110412CONGRESS/41211Finalprogramcuts.pdf">Another detail</a>: Federal Transit Administration capital investment will be reduced from FY 2010 levels by $680 million.</p>
<p><em>Image above: Rail yards in Washington, D.C., from <a href="http://www.flickr.com/photos/takomabibelot/3411949708/">Flickr user takomabibelot</a> (cc)</em></p>
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		<title>Private Sector Participation in Intercity Rail Service</title>
		<link>http://www.thetransportpolitic.com/2011/03/11/private-sector-participation-in-intercity-rail-service/</link>
		<comments>http://www.thetransportpolitic.com/2011/03/11/private-sector-participation-in-intercity-rail-service/#comments</comments>
		<pubDate>Fri, 11 Mar 2011 16:12:57 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Congress]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[Infrastructure]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=8599</guid>
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<p>» A House Committee holds a hearing on privatizing passenger rail, but recommendations are likely to be difficult to implement.
</p>
<p>Three weeks after Florida Governor Rick Scott (R) cancelled the Tampa-Orlando intercity rail project &#8212; a decision that seems increasingly foolish considering newly released projections of profitability on the route &#8212; members of the House Subcommittee on Railroads, Pipelines, and Hazardous Materials held a hearing today on the potential for increased private sector involvement in the funding and operations of intercity passenger rail service. The stated goal is to consider how to make intercity rail less expensive to run, at least in <p><a href="http://www.thetransportpolitic.com/2011/03/11/private-sector-participation-in-intercity-rail-service/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p><img class="aligncenter size-full wp-image-8600" title="Veolia Train" src="http://www.thetransportpolitic.com/wp-content/uploads/2011/03/Veolia-Train.png" alt="" width="540" height="331" /><strong></strong></p>
<p><strong>» A House Committee holds a hearing on privatizing passenger rail, but recommendations are likely to be difficult to implement.<br />
</strong></p>
<p>Three weeks after Florida Governor Rick Scott (R) <a href="http://www.thetransportpolitic.com/2011/02/16/florida-governor-rick-scott-rejects-funding-for-tampa-orlando-intercity-rail-project/">cancelled the Tampa-Orlando intercity rail project</a> &#8212; a decision that seems increasingly foolish considering <a href="http://www.miamiherald.com/2011/03/09/2106646/high-speed-rail-is-profitable.html">newly released projections of profitability</a> on the route &#8212; members of the House <a href="http://republicans.transportation.house.gov/subcommittees/Rail.aspx">Subcommittee on Railroads, Pipelines, and Hazardous Materials</a> held <a href="http://republicans.transportation.house.gov/News/PRArticle.aspx?NewsID=1166">a hearing</a> today on the potential for increased private sector involvement in the funding and operations of intercity passenger rail service. The stated goal is to consider how to make intercity rail less expensive to run, at least in terms of government subsidies.</p>
<p>For Republican supporters of passenger rail, as few and far between as they are nowadays, getting non-governmental actors into the business is a major priority. Yet the ability to do so has been previously handicapped by <a href="http://www.trainweb.org/tgvpages/fox.html">other members</a> of the GOP, most recently by Mr. Scott, whose decision to reject federal funds for his state&#8217;s project came <em>before</em> companies had the chance to respond to an offer to operate the line that would have required them to absorb construction and operating risks. And the whole goal of encouraging private investment may be troubled by the fundamental deficits in American rail infrastructure.</p>
<p>Nonetheless, the goal of increasing private participation in what for now is a government monopoly in the United States has long been a favorite of House Infrastructure and Transportation Committee Chairman John Mica (R-FL). In December 2008, Mr. Mica announced that the <a href="http://www.thetransportpolitic.com/2008/12/15/details-on-hsr-nec/">government would solicit private companies</a> for their ideas for how to improve the nation&#8217;s rail system, and by February 2009, the government <a href="http://www.thetransportpolitic.com/2009/02/06/groups-respond-overwhelming-to-solicitations-for-new-us-hsr/">had received more than 100 responses</a>. Notably, French national rail company SNCF <a href="http://www.thetransportpolitic.com/2009/09/19/breaking-sncf-proposes-development-of-high-speed-rail-in-midwest-texas-florida-and-california-corridors/">produced a stunning report</a> revealing plans for corridors in the Midwest, Texas, Florida, and California. These plans have gone nowhere so far.</p>
<p>There is quite a bit of precedent for private involvement in rail services: The United States&#8217; passenger rail system, which was once impressive, was largely built by companies. More recently, European Union liberalization rules have encouraged the <a href="http://www.thetransportpolitic.com/2010/08/30/european-transport-agencies-consolidate-intercity-rail-operations-in-face-of-competition/">growth of huge multi-national transportation companies</a> that are increasingly playing a role in moving people on commuter and intercity rail lines.</p>
<p>And the American freight rail system, which transports a large percentage of the nation&#8217;s goods, is self-supporting. In fact, its operators <a href="http://online.wsj.com/article/SB10001424052748704132204576190670934339338.html">plan to collectively spend</a> $12 billion on improvements this year alone.</p>
<p><a href="http://www.thetransportpolitic.com/2008/12/22/hsr-public-or-private/">Whether or not it is a good idea to replace</a> monopolistic public sector ownership with private companies and competition is worth evaluating in the passenger rail sector. As Edward Wytkind of the AFL-CIO stated today accurately, privatization in the U.K. has resulted in numerous difficulties and arguably an increase in public subsidies. But an even more serious question is just how realistic privatization is at all in the American context.</p>
<p>Mr. Mica, who referred to Amtrak as a &#8220;Soviet-style&#8221; passenger rail service because of its reliance on subsidies and lack of competition, argued today that routes be put up for competition, implying that private companies would be able to provide similar services at a less expensive rate for the government.</p>
<p>But there will continue to be very limited interest in &#8220;attracting private sector capital,&#8221; as Mr. Mica put it, unless there is a significant increase in public investment in intercity rail. The problem is that outside of the Northeast, most rail corridors are owned by the freight railroads, and they offer only limited capacity for increases in passenger operations. These freight companies have been largely uninterested in investing in passenger rail (their ancestors, after all, abandoned such services decades ago), and the Congress cannot simply expect other companies to be able to operate trains on those tracks. The law allows Amtrak, as a public company, to run along freight tracks, but it would be very problematic to extend similar rights to private companies, as Stephen Gardner, Vice President at Amtrak, said today. Would it be fair to force private freight companies to allow other private companies to run on their tracks?</p>
<p>States that subsidize their in-state passenger rail services, including California and North Carolina, among others, have the right to contract intercity rail services out to companies other than Amtrak, but they have not done so so far &#8212; part of the problem, apparently, is that few or no companies have expressed their interest in doing so.</p>
<p>Moreover, because the existing infrastructure is so decrepit &#8212; too few double-track corridors and poor stations are only the start of the problem &#8212; it is hard to see why many private companies would want to become involved in this process, because there are very limited margins for increased profitability.</p>
<p>On the routes where Amtrak currently is not operationally profitable &#8212; those outside of the Northeast Corridor &#8212; private companies would almost definitely require subsidies. This is not an exception to the rule: In the U.K. and in other countries, private operators often compete for subsidized contracts. Joseph Szabo, head of the Federal Railroad Administration, said today that his agency would move forward with competitive bidding for services along two current Amtrak corridors, but why any company would want to bid out for the three-times-a-week <a href="http://www.amtrak.com/servlet/ContentServer?c=AM_Route_C&amp;pagename=am%2FLayout&amp;cid=1241245650939">Sunset Limited</a>, for instance, is unclear.</p>
<p>Indeed, the whole discussion about increasing private investment in intercity rail implies that Amtrak has been unreasonable and inefficient in its use of funds. But the fact that Amtrak loses money does not mean that private companies would, or that they would require fewer subsidies. Indeed, Amtrak&#8217;s losses are mostly a result of the fact that its routes run along corridors that have suffered from public disinvestment: With capital expenditures along its lines, it would likely do far better. That is what the <a href="http://www.thetransportpolitic.com/2011/02/08/the-white-house-stakes-its-political-capital-on-a-massive-intercity-rail-plan/">Administration&#8217;s $53 billion intercity rail program</a> is supposed to do, but the Republican Party majority in the House has been largely opposed to any such investments.</p>
<p>The Northeast Corridor, which is the only rail route in the United States that has received significant investment, may be the only good candidate for private involvement because of its high capacity, high ridership, and even higher ridership potential with improvements. The problem with that idea is that Amtrak owns the line <em>and is making money</em> on its operations there. Would competition there be reasonable? Wouldn&#8217;t that simply reduce Amtrak&#8217;s ability to cross-subsidize its other operations into the future?</p>
<p>Advancing the cause of privatization and competition in America&#8217;s passenger railroads paradoxically <em>requires</em> an increase in public investment in infrastructure. That spending could be coordinated with private partnerships, but no company is likely pay for the entire cost of a new line. The European decision to allow liberalization only came after decades of upgrades along intercity corridors and parallel increasing ridership. Only after the government has opened up new lines for service &#8212; Florida&#8217;s high-speed rail line was an excellent example &#8212; will there be significant interest from companies.</p>
<p><em>Image above: A train in the Netherlands operated by private contractor Veolia, from <a href="http://www.flickr.com/photos/reinoutvanrees/2174883359/">Flickr user Reinout van Rees</a> (cc)</em></p>
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		<title>Ideological Debate Simmers Over How to Determine Appropriate Transportation Funding Levels</title>
		<link>http://www.thetransportpolitic.com/2011/01/04/ideological-debate-simmers-over-how-to-determine-appropriate-transportation-funding-levels/</link>
		<comments>http://www.thetransportpolitic.com/2011/01/04/ideological-debate-simmers-over-how-to-determine-appropriate-transportation-funding-levels/#comments</comments>
		<pubDate>Tue, 04 Jan 2011 22:11:05 +0000</pubDate>
		<dc:creator>Yonah Freemark</dc:creator>
				<category><![CDATA[Congress]]></category>
		<category><![CDATA[Finance]]></category>

		<guid isPermaLink="false">http://www.thetransportpolitic.com/?p=8356</guid>
		<description><![CDATA[<p>» A new PIRG study notes the failure of user fees to fully fund the nation&#8217;s roads network. The report&#8217;s conclusions, though, do little to calm what is becoming an increasingly ideological debate over how to determine funding limits for transportation.
</p>
<p>The federal government does not fully cover the cost of its transportation investments through the collection of user fees. The same can be said for many local and state governments. Each has come to increasingly rely not only on fuel taxes to build highways and streets, but also general revenues derived from income and sales taxes.</p>
<p>If this fact has been noted <p><a href="http://www.thetransportpolitic.com/2011/01/04/ideological-debate-simmers-over-how-to-determine-appropriate-transportation-funding-levels/">Continue reading this post »</a></p>]]></description>
			<content:encoded><![CDATA[<p><strong>» A new PIRG study notes the failure of user fees to fully fund the nation&#8217;s roads network. The report&#8217;s conclusions, though, do little to calm what is becoming an increasingly ideological debate over how to determine funding limits for transportation.<br />
</strong></p>
<p>The federal government does not fully cover the cost of its transportation investments through the collection of user fees. The same can be said for many local and state governments. Each has come to increasingly rely not only on fuel taxes to build highways and streets, but also general revenues derived from income and sales taxes.</p>
<p>If this fact has been noted <a href="http://www.thetransportpolitic.com/2010/06/07/the-age-of-general-fund-financing-is-already-here-but-it-may-not-matter/">again and again on this site</a>, the idea that America&#8217;s roads system has been constructed and maintained by its users remains a popular myth, especially according to those who would suggest limiting public transportation investment to the highway network. A <a href="http://www.uspirg.org/news-releases/transportation-news/transportation-news/washington-d.c.-myth-busted-road-costs-not-covered-by-gas-taxes">new U.S. Public Interest Research Group (PIRG) report</a> by Tony Dutzik, Benjamin Davis, and Phineas Baxandall demonstrates conclusively that over the course of the past 60 years, total roads spending has exceeded by $600 billion the amount collected by user fees. Notably, the U.S. Congress has <a href="../2010/12/20/to-ensure-continued-funding-limiting-expectations-on-federal-transportation-reform/">over the past two years transferred tens of billions of dollars</a> of  general funds to pay for highway and transit programs, despite the fact  that they are &#8220;supposed&#8221; to be financed solely by fuel tax revenues.</p>
<p>Even without accounting for the large number of externalities associated with driving &#8212; including environmental degradation, sprawl, and accident-related insecurity &#8212; user fees now only pay for about half the total costs of building and maintaining roads.</p>
<p>Moreover, the assumption that fuel tax revenues are spent on transportation is fallacious. In 1990 and 1993, increases in the federal fuel tax went towards deficit reduction rather than roads expenditures.</p>
<p>In the larger debate over what kinds of transportation to fund, making these facts known is essential. Proponents of public transit, biking, and pedestrian infrastructure are  frequently caught flailing defensively because their favored expenditures require subsidies that extend beyond user fees. But if one of the primary arguments made by proponents of highway investment &#8212; that they &#8220;pay for themselves&#8221; &#8212; is undercut, the reasons propping up public support for roads spending over transit no longer seem so reasonable. And it suggests that the currently stalled efforts to expand national financing for infrastructure could be set into motion if political leaders were to realize that using funding sources <em>not</em> based on user fees is also a legitimate option.</p>
<p>Whether expenditures on transportation should be directly informed by the revenues collected <em>from</em> transportation is an essential question that largely divides the transportation policy community. Should funding levels dictate investment, or should investment needs dictate funding levels?</p>
<p>Congressional Republicans, who will take control of the House of Representatives tomorrow, have <a href="http://dc.streetsblog.org/2011/01/03/republicans-want-to-horde-transpo-money-and-call-it-deficit-reduction/">proposed a rule change</a> for transportation spending that would limit expenditures to revenues collected through fuel taxes. In effect, this would reduce government expenditures on highways and transit substantially, <a href="http://www.thetransportpolitic.com/2010/11/23/a-new-political-reality-settling-in-for-national-transportation-financing/">pulling $7 to $8 billion out</a> of the typical annual pot of around $50 billion, despite &#8220;guarantees&#8221; made in previous years to fund transportation at the higher level. (The Senate remains in Democratic hands and thus is unlikely to approve a similar rule change.) Conservatives <a href="http://www.openmarket.org/2011/01/04/highway-trust-funds-funding-guarantees-are-the-problem/">have argued</a> that this is the fiscally sound approach, as it would ensure that federal spending is limited by fuel tax revenues, rather than expanded into the general fund as has been the rule recently.</p>
<p>As Steve Heminger, Chair of the San Francisco Bay Area Metropolitan Transportation Commission, <a href="http://transportation.nationaljournal.com/2011/01/highway-trust-fund-battles.php">has written</a>, &#8220;<em>The simple fact is the transportation community can&#8217;t have it both ways. We can&#8217;t insist on continued protection from general fund diversion if we&#8217;re not willing to offer the general fund similar protection from continued bailouts for the beleagured [</em>sic<em>] transportation program</em>.&#8221; In other words, if transportation advocacy groups want to maintain the devout connection between the fuel tax and transportation funding, they cannot in turn demand what are effectively bailouts from the general fund. Mr. Heminger wants a fuel tax increase to transportation funding woes, a solution that has little to no support from Republican leaders.</p>
<p>Yet this line of thought generally follows the same argument that is propelling the House GOP to promote a rule change, that spending on transportation should be limited to user fees. It&#8217;s just that Mr. Heminger is willing to ask motorists to contribute more than his Republican colleagues are.</p>
<p>But if, as the PIRG report illustrates, the connection between road construction and user fees collected is questionable at best, both in the present and throughout U.S. history, why must questions of transportation expenditure continue to be constrained by fuel tax returns? If financing from other revenue sources has always played a role in the debate, is it essential to continue perpetrating the myth that it is necessary to raise user fees, <em>so as</em> to increase spending on transportation?</p>
<p>Indeed, the progressive stance on this issue is frankly not to constrain expenditures on transportation to the revenue currently provided, but rather to identify actual national mobility needs <em>and then</em> work to identify the revenue sources &#8212; user fee or anything else &#8212; to finance them. This was <a href="http://www.thetransportpolitic.com/2009/06/19/congressman-oberstars-transportation-bill-outline/">something of the approach of Representative Jim Oberstar (D-MN)</a>, who chaired the House Committee on Transportation and Infrastructure until today, but his efforts for a $450 billion transportation reauthorization bill, which would have represented a large and unfunded expansion of federal investment,<a href="http://www.thetransportpolitic.com/2010/12/29/after-two-years-of-democratic-control-in-washington-a-transportation-roundup/"> went down in flames</a>.</p>
<p>Nonetheless, there is reason to think that a well-measured and honest campaign in favor of spending on roads and transit could attract significant popular support, even if it required increasing someone&#8217;s taxes. If it has worked over and over at the local level in referendums over local sales tax increases, why couldn&#8217;t it work in Washington?</p>
<p>In some ways, this is a highly unrealistic approach to the problem of transportation finance since, after all, there is a large backlog on transportation maintenance and expansion needs and simultaneously significant political opposition to the idea of raising any taxes at all. To some, this situation would be best countered with a stimulus of sorts, using debt financing to update the nation&#8217;s infrastructure to workable condition. Yet agreement can apparently only be reached on reducing taxes, not on investing in the nation&#8217;s future.</p>
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