The Age of Neoliberalism at its End

Obama’s budget stands in opposition to thirty years of failed subsidies to the private sector

Though President Obama’s first budget proposal, whose rough outlines were released yesterday, doesn’t say much about his transportation proposals, it does provide insight into our country’s new direction overall.

America’s fundamental problem is that it has allowed income inequality to increase rapidly over the past four decades, especially as compared to that in other developed nations. Because of our generous corporate tax breaks, lack of national health care, and inferior education system, we have simply made the problem worse, exasperating the plight of the poor and encouraging the rich to continue enriching themselves – but not the economy as a whole.

Since World War II, the world’s developed economies have provided increasing standards of living to their inhabitants, but at a slowly mounting cost. Pressure by private interests in recent decades has sacrificed many of those gains by destroying social protections at the alter of “free” trade; the result was a reduction in the power of democracies to govern as corporate multinationals, working under the auspices of organizations such as the WTO, have created markets that prioritize the profit-making of a few above the promotion of a quality of life for all. In the name of economic freedom, the liberty of the majority has been reduced.

The Bush administration marked the high point of this neoliberal philosophy by encouraging government to subcontract every aspect of its operations to the private sphere, at higher costs and at reduced dividends. The disaster represented by Hurricane Katrina, which Bobby Jindal claimed showed that “the strength of America is not found in our government,” rather was a demonstration that a government that doesn’t believe in government doesn’t work. The death of thousands of people in New Orleans was the result of a government not willing to take account for its responsibilities, which are fundamentally to provide for the public welfare. That mission has been diluted and sometimes lost since the rise of modern conservatism.

States and cities, quickly loosing the support of the federal government, often have had no choice but to sell off public assets – or let them rot. In transportation, the result was clear: Washington wanted much of the interstate highway system auctioned off to the highest bidder; it wanted a public Amtrak to fail; it was willing to let transit systems fall into disrepair; and it saw no reason to encourage sustainable transportation if it wasn’t profitable.

Mr. Obama’s budget promises a new day in the United States, a return to the hope that as a collective, we can ensure the health and well-being of all individuals. It turns its back on the premise that the market forever decides what is right or what is wrong. It encourages us as a people to ask what we can do for one another, rather than what we can do for our own self-interests.

This year, Congress will debate and eventually approve the new transportation bill. Lawmakers can choose to continue to deny the fact that automobiles and their product – sprawl – are the principal causes of the environmental disaster that lies ahead of us. They can continue to ignore the rapid deterioration of our infrastructure, sell it to private industrialists, and allow it to continue falling apart.

Or, our congresspeople can do something new, pushing for sustainable, environmentally-friendly mobility that encourages the kind of dense living that has been proven time and time again to be better for the health of the world’s ecosystems. Congress can choose to advance a massive reconstruction of our railways and roads and bridges that will secure our standing in the twenty-first century. It can choose to work on behalf of everyone, rather than just the wealthy few.

I hope that this week marks a turning point in American society, a recognition that somewhere, we went off course. Mr. Obama’s budget proposal represents a strong starting point. Now the rest of us need to get to work.

Finance President

How the Next Budget Stacks Up

Huge budget provides billions to transportation, but doesn’t appear to mark sea change in vision for U.S. mobility

The Obama administration has officially released its budget outline, which provides a summary of how the federal government will spend money in fiscal year 2010 (from July 2009 to July 2010). It also provided some information about how it intends to use its limited funds over the next 10 years. Here is what we know so far:

  • The bill will “increase” funding to public transit, focusing on public transportation’s environmental benefits,
  • It will provide $1 billion a year for at least five years for high-speed rail, above the $8 billion already authorized from the stimulus bill
  • It will form a national infrastructure bank, such as Mr. Obama proposed during the campaign, which will be funded by $5 billion in appropriations over the next 5 years

Note that the information we have right now is the preliminary budget outline. This means that it is not detailed since the final bill has yet to be written, and that the administration may choose to change certain aspects of the bill in consultation with members of the House and Senate. It will also of course have to be approved by the Congress to enter into the law.

The budget does promise increased funding for mass transit, something I’m excited to hear… but we’ll have to wait to see the official figures over the next few weeks. It is unclear whether discretionary funding for transit will increase over SAFETEA-LU-mandated levels, based on gas tax receipts. The budget’s inclusion of a 5-year fund for high-speed rail is a good sign, but unfortunately for the U.S. treasury, it’s going to cost a lot more than that to actually build fast train lines. In order to fund the future of intercity rail in the country, we’re going to have to keep asking for more funding on rail.

The table below summarizes transportation funding in Obama’s proposed budget with those in Clinton’s proposed 2000 budget, Bush’s proposed 2008 budget, and the actual expenditures by the U.S. government in fiscal year 2008. I’ll update the table on the transport politic as I receive more information about funding for transportation programs over the next few weeks.

Proposed ’00
Proposed ’08
Actual ’08 Proposed ’10
Program $B
Highways $31.4 58.8% $39.6 59.1% $42.2 60.1% $ ? % ?
Amtrak $0.6 1.1% $0.8 1.2% $1.3 1.9% $ ? % ?
Rail Grants $0.0 0% $0.1 0.1% $0.0 0% $1.0 1.4 %
FTA $6.1 11.4% $9.4 14.0% $9.5 13.5% $ ? % ?
» Formula $4.9 9.2% $7.9 11.8% $7.8 11.1% $ ? % ?
» Capital $1.1 2.1% $1.4 2.1% $1.6 2.3% $ ? % ?
DOT Overall $53.4 $67.0 $70.2 $72.5
DOT Finance High-Speed Rail

Competitors for High-Speed Rail Grants

States all around the country see themselves as likely qualifying for HSR grants, but we’ll have to wait a few months to see which projects get funding

The economic stimulus bill included $8 billion for high-speed rail projects. Though Republicans continue to repeat the lie that the funding has already been earmarked for a maglev project between Los Angeles and Las Vegas, the truth is that there are a large number of corridors around the country that are likely to apply for funds. Here are the projects whose sponsors have mentioned in the news as being interested in applying for the funds (no specific order here):

  • California High-Speed Rail Project – First phase of the project would connect Anaheim and San Francisco, via Los Angeles, Fresno, Bakersfield, and San Jose. The State Authority managing the project will ask for $2 billion of the funds to be used for construction before 2012, for grade separations, right-of-way purchase, construction grading, and electrification of lines between San Francisco and San Jose (for Caltrain, too) (Progressive Railroading).
  • Texas T-Bone Project – Project is less defined and funds would probably be used for engineering purposes; it would connect Dallas with San Antonio, via Austin, and Temple and Houston (Temple Daily).
  • Florida High-Speed Rail Project – Project connecting Orlando with Tampa and Miami was close to realization in early 2000s, but after failure on a referendum, group hasn’t met since 2005. First leg connecting Orlando Airport, downtown Orlando, Disney World, Lakeland, and Tampa would have cost $2 billion, construction could begin in 12 to 18 months, last three to four years, and provide trains running at 120 mph maximum (MSNBC).
  • Washington-Oregon Cascades CorridorVery limited Quite a bit of planning thus far for the corridor running from Eugene, Oregon to Vancouver, British Columbia, via Portland and Seattle, but; states could be interested in asking for funds to upgrade and speed up the line (Cascadia Prospectus).
  • Southeast High-Speed Rail – Project, running from Washington, D.C. to Charlotte, via Richmond and Raleigh, is more advanced than most others in this list, with environmental impact statements already completed; strong support from Virginia and North Carolina would mean that 110 mph trains could be running in 4 years with funds (News and Observer).
  • New York High-Speed Rail – $10 billion project would connect New York City with Buffalo, via Albany and Rochester. Project has not been planned, so funds would go to engineering and slight upgrades, like double tracking and sidings (Binghamton Press).
  • Midwest High-Speed Rail – First leg of the Midwest HSR project would connect Chicago to St. Louis, via downstate Illinois. Incremental improvements could increase speeds to around 100 mph; project might be aided by the fact that Transportation Secretary Ray LaHood is from Peoria, which is near the line (Pantagraph).
  • Michigan High-Speed Rail – The state of Michigan would like to improve existing rail between Detroit and Chicago; this project would not be true high-speed rail and would likely focus on small improvements to the line (Free Press).
  • Minnesota/Wisconsin High-Speed Rail – Project, which has received avid support from the governor of Wisconsin, would connect Chicago with Milwaukee and the Twin Cities; most of the funds would likely go to corridor enhancements, especially between Milwaukee and Chicago (Star Tribune).
  • Ohio 3C Corridor – State project would connect Cincinnati, Columbus, and Cleveland, a line that was deactivated years ago; this would not be true high-speed rail (Plain Dealer).
  • Pittsburgh Maglev Project: 54-mile project would cost a total of $3.75 billion and run from Pittsburgh’s airport to the city center and then to suburban Monroeville and Greensburg, PA; private project proponents claim that phase one between the airport and downtown could be completed in 2.5 years (WTAE-TV).
  • Las Vegas – Los Angeles Maglev – $12 billion project, which has received so much GOP criticism could begin first phase within 18 months and would be run by a private company. (Associated Press).

All of the projects listed above have been already considered by the federal government, either through its designated high-speed rail corridors program or its maglev demonstration program. All the projects listed above are in the running for some of the funds, though California’s project, which was recently partially funded by a $10 billion bond approved by the state’s voters, seems to be on the fast-track.

When the Department of Transportation delivers guidelines in March for how the high-speed rail funding should and can be spent, we’ll have a better idea of which projects will get money, though final decisions won’t be made until late May.

High-Speed Rail Montréal Toronto

Canada Considers Québec-Windsor HSR Corridor, Again

High-speed line running through Toronto and Montréal getting another think-over

Ontario Premier Dalton McGuinty said yesterday that Canadian Prime Minister Steven Harper is frowning on the idea of a high-speed rail line between Québec City and Windsor, via Montréal and Toronto, reports the Canadian Press. Mr. McGuinty, along with his centrist Liberal Party ally Québec Premier Jean Charest, have been strong supporters of the line, which would do quite a bit to connect the biggest cities in the two provinces. Mr. Harper’s conservative party has been notoriously uninterested in the project over the past twenty years of proposals, though recently the conservatives made a few moves that indicated they were interested in supporting the line.

Conservatives have agreed to spend $3 million to study the 1,200 km corridor once again. It will be considered by Wilbur Smith, an engineering consulting firm; Deutsche Bahn, the German rail operator; and a few other groups. According to the Toronto Star, the corridor has been studied at least 16 times since 1973. Ontario’s NDP Party leader Howard Hampton, on the left of Canada’s political spectrum, criticised the government’s reluctance to get moving:

“They’re going to study it again? You don’t need to study it again. The biggest issue is purchasing all of the land and purchasing some of the rail bed that belongs to CN or CP that you need to make this run… Everybody wants to study it because they think it will give them a good headline. We’re long past the study stage. Where’s the money to start doing it?”

The project, which I ranked as relatively worthwhile in the transport politic’s study of high-speed corridors,  would cost upwards of $30 billion if built at international high-speed standards, using electric propulsion and 200 mph trainsets. It would require a massive federal government intervention that doesn’t seem to be forthcoming from the ruling conservatives, but it would reduce the travel time between Canada’s two biggest metropolises from 4h today to 2h18. Air traffic between the cities likely would, based on international experience, be almost entirely replaced by train travel.

The Québec-Windsor line has become Canada’s top rail priority over the past few years after Québec province dropped its efforts for a fast line between Montréal and New York City. Long-time Montréal mayor Jean Drapeau dreamed of implementing such a corridor and saw it as the third step in realizing his city’s dominance over rival Toronto, after the successful Expo ’67 and less praised (and very expensive) ’76 Olympics there. Those dreams have slowly faded as Montréal’s position compared to Toronto has diminished since the 1970s as a result of anglophone business moving to the latter city because of fears of a French Québeçois secession.

Congress President

Mr. Obama's Address to Congress Avoids Transportation Issues, but Mr. Jindal's Reaction Repeats GOP Vegas HSR Lie

Hints at broad interest in nation-building at home

Last night, President Barack Obama addressed the nation in a pseudo-State of the Union address in front of a joint session of Congress, with the Supreme Court and the Cabinet in attendance. His comments, meant to encourage the nation in this period of collective doldrums, were focused on energy, health care, and education, with a small element at the end focused on foreign affairs. In his 52-minute speech, he didn’t address how transportation is an integral element of the energy problem, but he did mention public transportation when talking about the stimulus bill:

“Over the next two years, this plan will save or create 3.5 million jobs.  More than 90% of these jobs will be in the private sector – jobs rebuilding our roads and bridges; constructing wind turbines and solar panels; laying broadband and expanding mass transit.”

That said, he did suggest that it was time for a new era of national planning:

“In the next few days, I will submit a budget to Congress.  So often, we have come to view these documents as simply numbers on a page or laundry lists of programs.  I see this document differently.  I see it as a vision for America – as a blueprint for our future….

“History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas.  In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry.  From the turmoil of the Industrial Revolution came a system of public high schools that prepared our citizens for a new age.  In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history.  And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.”

There was no mention of high-speed rail here, but the overall impression is that he’s suggesting we need a national infrastructure project. The obvious candidate for such an investment is a fast railway network. We’ll see whether Mr. Obama replicates the advocacy he demonstrated for the mode in the stimulus in future spending bills.

That said, in his lackluster GOP response, Louisiana Governor Bobby Jindal didn’t have a problem mentioning high-speed rail:

“But Democratic leaders in Congress rejected this approach. Instead of trusting us to make wise decisions with our own money, they passed the largest government spending bill in history – with a price tag of more than $1 trillion with interest. While some of the projects in the bill make sense, their legislation is larded with wasteful spending. It includes $300 million to buy new cars for the government, $8 billion for high-speed rail projects, such as a ‘magnetic levitation’ line from Las Vegas to Disneyland, and $140 million for something called ‘volcano monitoring.’ Instead of monitoring volcanoes, what Congress should be monitoring is the eruption of spending in Washington, DC.”

I’ve pointed out in the past that this Republican line of thinking is not simply political spin on an issue… it is a lie. The bill includes no specific earmarks for a Las Vegas maglev line. While it is possible that the corridor will get some funding, it will be waiting in line along with other far more advanced projects in California, the Midwest, and the Southeast. Mr. Jindal’s line is embarrassing and repeats the Republican mistake of assuming that if a lie is repeated enough, it becomes true in the minds of the American people.

I think we’ll be seeing four more years of mindless Republican opposition to sensible transportation investments.