The Administration Refreshes Its Push for a Major Infusion of Funds into the National Rail Program

» The Obama Administration hopes to invest almost $40 billion in new and improved passenger rail infrastructure over the next five years. Good luck getting that through Congress.

It’s an annual spectacle. The President releases his budget. The budget proposes a huge expansion in spending on surface transportation, particularly in high-speed rail. Administration figures testify on Capitol Hill, hoping to raise the specter of infrastructure failure if nothing is done. The Congress responds lackadaisically, with Democrats arguing that something should be done and Republicans doing everything they can to prevent a cent more from being spent, and ultimately no one agrees to much of anything other than a repetition of the past year’s mediocre investments.

Will things be different this year?

The question is particularly relevant because the U.S. Government’s rail investment program — its authorization for allocating funds to the Federal Railroad Administration (FRA) will expire this year. Legislation supporting the FRA, as well as Amtrak, the national passenger rail corporation, and improvements to freight rail, is necessary to ensure continuity of funding. Previous bills have authorized funding over five-year increments. In effect, the bills set out how much Congress expects to expend over the next few years, and allows the House and Senate to avoid debating the issue for years at a time.

The Obama Administration has responded to situation by proposing a massive infusion of funds for passenger rail and the creation of a “National High-Performance Rail System.”

Total funding for rail activity, both for operating funds and capital projects, would increase from about $1.8 billion in 2013 to more than $6.5 billion in fiscal year 2014. Over the course of five years, about $40 billion would be devoted to rail improvement across the country, a massive expansion paid for with funds “saved” from ending military operations overseas. This would be headlined by a $5 billion “jump-start” stimulus for rail, part of a $50 billion infrastructure package the Administration is hoping Congress will pay attention to.

In many ways, the Administration’s bill is similar to past attempts at legislating major increases in funding for rail. In 2011, for instance, the government promoted a $53 billion plan to “win the future” with rail lines funded across the country. Yet Congresspeople reacted to the proposal with little interest — and members didn’t have to, because there was no authorization bill expiring. That’s what makes this year different.

The Administration’s proposal practically boils with ambition. Grants for new and improved rail lines would be heavily oriented (70 to 85%) towards “core express” alignments, which include only corridors where electric trains operating hourly at speeds of 125 mph and above run on their own, dedicated tracks. This says a lot about the Administration’s interest in focusing its energies on the “true” high-speed corridors, which at this time are only in development for California and the Northeast.

Grants in the proposal’s “rail service improvement program” would add up to $3.66 billion in the first year of activity but grow significantly over the course of five years, eventually reaching more than $6 billion a year. This would provide a substantial base of funds for serious rail projects.

But the initial allocations of funds would also ensure support for current rail lines. $2.7 billion in the first year of allocations would be dedicated to operating subsidies and projects that bring the Northeast Corridor to a state of good repair by 2025. Operating funds for Amtrak’s long-distance trains would be maintained, but those for state-supported (short-corridor) train lines would be eliminated after five years, in line with the existing law, to be replaced by profitable operations or more state support (or elimination). Amtrak’s fleet, which is on average 27.7 years old, would be upgraded, particularly in the Northeast, by 2018.

Some funding would also be provided for expanding freight capacity, reducing congestion (such as in the Chicago area), implementing Positive Train Control (which theoretically prevents trains from running into one another), and expanding access for the disabled. Much of the support would be dedicated to corridors owned by private freight rail companies.

All of the funds the Administration has proposed for an expansion of passenger rail service would do wonders for the nation’s train network. Yet even $40 billion committed over the next five years would hardly make a dent in the cost of the California High-Speed Rail project ($70-100 billion) and a new, high-speed Northeast Corridor ($150-200 billion). If the government committed similar funds over the course of five-year increments into the future, it would take a minimum of 27.5 years to complete these projects alone, with no spending on anything else. That’s 2041 before there’s true high-speed service on both coasts — at the earliest!

It’s true, of course, that any investment in new rail service will require financial and planning aid from local stakeholders, and these projects could be completed far more quickly if they were infused with local and state funds (as is the case in California).

Between Boston and Washington, the Northeast Corridor Infrastructure and Operations Advisory Commission (NEC Commission) is tasked with developing a framework for allocating costs along the corridor. As part of that program, it has created a document that demonstrates the rail line’s critical needs and it will be looking to help Amtrak and the states better coordinate their contributions to the line.

If upgrades are going to be made to the line, it will be necessary to ensure that states along the corridor all benefit, and that they all contribute. Determining the best way for them to do that is an incredibly important task that has yet to be fully laid out. Should New Jersey, for instance, aid Amtrak in paying for a new line, if that clears capacity for New Jersey Transit’s commuter rail division? Should Delaware contribute to the cost of a new corridor if no fast trains stop in the state? How much should the states and cities along the line pay to run local trains down the intercity tracks? Before any serious aid is provided to the Northeast, there must be an agreed-upon system for Northeastern stakeholders to answer these questions.

If the FRA reauthorization provided increasing funds to a better managed railroad, assuming increasing funding from other sources (presumably including private players), there is reason to think that Obama’s program could provide substantial improvements to the nation’s foremost passenger rail corridor.

Ultimately, however, the question of whether the Administration’s proposal has any technical merit is irrelevant when there is no political backing for an increase in appropriations for rail service in the United States.

The White House’s claim that its reauthorization would be “paid for” is, quite frankly, a specious argument. To pay for infrastructure, the government wants to use money (“savings generated by capping Overseas Contingency Operations”) that it “would have spent” on foreign wars but that is no longer necessary because the country is pulling out of Iraq and Afghanistan. Yet when the government is operating with a massive deficit, it’s hard to argue that that money is being shifted from one government use to another. It’s debt, pure and simple.

There are plenty of reasons to argue about the benefits of deficit spending, particularly in the midst of the continued recession, but let’s at least be honest about where the money is coming from.

There was an alternative — the Administration could have proposed a new source of revenue to pay for the program, such as an expansion in the fuel tax or the creation of a vehicle-miles travelled fee. That’s needed all sorts of transportation: The Congressional Budget Office reported last week that the Transportation Trust Fund (sourced from fuel taxes) will have a more than $90 billion shortfall by 2023 (and be operating in a deficit by 2015), imperiling any new spending on highways or urban transit.

Yet the Obama White House has shown itself hostile to any tax increase program that would affect lower- and middle-class families, and the Congress has certainly not pushed back with its own proposals. Thus the use of money “that would have” been spent on the wars to pay for the new transportation proposals. With little interest in increasing deficit spending, unfortunately, that proposal, too, is likely to go nowhere. The status quo will be reinforced.

This is a particularly sad state of affairs because the need is there, particularly in the Northeast. The FRA is currently developing a rail investment plan for the Corridor through a public consultation process, and a preliminary alternatives report was released this month, indicating a series of at least possible improvements. Amtrak, too, is desperately pushing for funds, arguing in recent weeks that the Corridor is suffering from an “investment crisis.”

Moreover, many Republicans in Congress have argued repeatedly that they are interested in funding improved rail service on the Northeast Corridor. Former House Committee on Transportation and Infrastructure Chair John Mica (R-FL) said in 2011 that “We have to redirect our efforts to having at least one success in high-speed rail in the nation. And that high-speed rail success needs to be here in the Northeast Corridor.” Though he didn’t propose any specific way to pay for those improvements, his interest is indicative of the GOP’s willingness to compromise. (And indeed, current Committee Chair Bill Shuster also has been a supporter of Amtrak.)

Perhaps the Administration’s policies should recognize this? On the other hand, the government clearly has no interest in shutting out three-fourths of the nation from rail grants.

Anthony Foxx, who will be nominated as the government’s next Secretary of the Department of Transportation this week, has proven to be a strong supporter of rail transportation in his position as mayor of Charlotte. But his ability to promote the Administration’s rail reauthorization bill has yet to be proven. Current DOT Secretary Ray LaHood, formerly a Republican Congressman from rural Illinois, has failed to produce bipartisan consensus in favor of more transportation investment over the past four years. How can Mr. Foxx, a strong urban Democrat, do so? The House remains controlled by the GOP and the Senate may shift in that direction after next year’s midterms.

There’s a lot to be excited about the rail reauthorization bill the Administration has proposed, but there is more to be skeptical of. We have a long way to go before there is solid support in Washington for more spending on rail transportation.