Obama’s High-Speed Rail Obsession

Perhaps nothing so illustrates President Obama’s occasional disconnect with reality than his fervent advocacy of high-speed rail. Amid mounting pressure for budget cuts that affect existing programs, including those for the inner city, the president has made his $53 billion proposal to create a national high-speed rail network as among his top priorities.

Our President may be an intelligent and usually level-headed man, but this represents a serious case of  policy delusion. As Robert Samuelson pointed out in Newsweek, high-speed rail is not an appropriate fit for a country like the U.S. Except for a few areas, notably along the Northeast Corridor, the U.S. just lacks the density that would make such a system work. Samuelson calls the whole idea “a triumph of fancy over fact.”

Arguably the biggest problem with high-speed rail is its extraordinary costs, which would require massive subsidies to keep operating. Unlike the Federal Highway Program, largely financed by the gas tax, high-speed rail lacks any credible source of funding besides taxpayer dollars.

Part of the pitch for high-speed rail is nationalistic. To be a 21st century super power, we must emulate current No. 2 China. But this is a poor reason to indulge in a hugely expensive program when the U.S. already has the world’s most evolved highway, freight rail and airline system.

Also, if the U.S. were to follow the Chinese model, as some have suggested, perhaps it should impose rule from a Washington version of a centralized authoritarian government. After all, dictatorships are often quite adept at “getting things done.”  But in a democracy “getting things done” means balancing interests and efficiencies, not following orders from above.

In China high-speed rail is so costly that the trains are too expensive for the average citizen. Furthermore, construction costs are so high the Chinese Academy of Sciences has already warned that its debts may not be payable. This experience with ballooning costs and far lower fare revenues have raised taxpayer obligations in Taiwan and Korea and added to heavily to the national debt in Japan.

The prospect of mounting and uncontrollable costs has led governors to abandon high-speed projects  in Ohio, Wisconsin and most recently Florida, where a battle to save the Tampa-Orlando line has begun . In times of budget stress, the idea of building something new, and historically difficult to contain by costs, becomes a hard sell.

Oddly, the leaders of California, faced with one of the worst fiscal positions in the country, are determined to spend several billions on what Sacramento Bee columnist Dan Walters has dubbed a “train to nowhere” for 54 miles between Madera and Corcoran — two unremarkable and remote Central Valley towns. The proposal makes the former Alaska Sen. Ted Stevens’ notorious ”bridges to nowhere” project seem like frugal public policy.

California’s train to nowhere has been justified as part of wider project to construct a statewide system. But the whole idea makes little financial sense: The University of California’s Institute for Transportation describes the high-speed proposal as based on an “inconsistent model” whose ridership projections are simply not “reliable.”

Equally suspect are cost estimates, which have doubled (after adjustment for inflation) from 1999 to $42.6 billion last year and. A new study says that the project could currently cost close to $65 billion. Costs for a ticket from Los Angeles to San Francisco, originally pegged at $55 one way, had nearly doubled by 2009, and now some estimates place it at about to at least a $100 or perhaps much as $190 — considerably more than an advanced-purchase ticket on far faster Southwest Airlines.

There’s growing political opposition to the system as well, and not just among penny-pinching right-wingers. Residents and local officials in the San Francisco Peninsula, a wealthy and reliably liberal portion of Silicon Valley, largely oppose plans to route the line through their communities. This includes some prominent liberal legislators, such as San Mateo’s Assembly Jerry Hill, who has threatened to put high-speed rail back on the ballot if costs start to surpass initial estimates. Another Democrat, California Treasurer Bill Lockyer has doubts that the rail authority will be able to sell the deal to potential bond-buyers   due in part to a lack of consistent estimates in ridership or cost.

So why is Obama still so determined to push the high-speed boondoggle? Largely it’s a deadly combination of theology and money. Powerful rail construction interests, notably the German giant Siemens, are spreading cash like mustard on a bratwurst to promote the scheme. Add to that construction unions and the ever voracious investment banks who would love to pocket fees for arranging to sell the bonds and you have interests capable of influencing either party.

Then there’s what might be called the “density lobby” — big city mayors, construction firms  and the urban land owners. These magnates, who frequently extort huge public subsidies for their projects, no doubt think it grand to spend billions of public funds on something that might also increase the value of their real estate.

And finally there are the true believers, notably planners, academics, green activists and an army of rail fans. These are people who believe America should be more like Europe — denser, more concentrated in big cities and tied to the rails. “High speed rail is not really about efficient transport,” notes California transit expert and accountant Tom Rubin. “It’s all about shaping cities for a certain agenda.”

Yet despite their power, these forces face mounting obstacles. As transportation expert Ken Orski points out, the balance of power in the House now lies with suburban and rural legislators, whose constituents would not benefit much from high-speed rail. And then there are governors, increasingly Republican and conservative, very anxious not to add potentially huge obligations to their already stressed budgets.

The most decisive opposition, however, could come from those who favor transit spending but understand to the need to prioritize.  High-speed rail is far more expensive than such things as fixing current commuter rail and subways or expanding both public and private bus service. Indeed, the money that goes to urban rail often ends up being diverted from other, more cost-effective systems, notably buses.

The choice between high-speed rail and more conventional, less expensive transit has already been presaged in the fight against expanding LA’s expensive rail system by organizations representing bus riders. These activists contend that rail swallows funds that could be spent on buses

Much the same case is being made the San Francisco peninsula. The opponents of high-speed rail on the San Francisco Peninsula are outraged that the state would spend billions on a chancy potential boondoggle when the popular Caltrain commuter rail service is slated to be curtailed or even eliminated.

One can of course expect that anti-spending conservatives will be the biggest cheerleaders for high-speed rail’s decline. But transit advocates may be forced to join the chorus of opposition, in order to steer   transit spending towards more basic priorities as buses in Los Angeles, subways in New York or commuter rail in the San Francisco Bay Area.

In an era of tough budgets, and proposed cutbacks on basic services, setting sensible transportation priorities is crucial. Spending billions on a conveyance that will benefit a relative handful of people and places is not just illogical. It’s obscene.

This piece originally appeared in Forbes.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Photo: Center for Neighborhood Technology