Since announcing an $8 billion “down payment” for high-speed rail development, the Obama administration has been silent about how to pay for a program as ambitious as the Interstate Highway System.
The interstates cost more than $250 billion in current dollars to build. A fast train network, based on systems being developed worldwide, most noticeably in China, could be equally expensive.
So far, Congress has come up with $2.5 billion in general fund appropriations for high-speed rail (HSR) in 2010, and the administration has asked for $1 billion a year for the 2011-14 budgets. Such allocations are hardly enough to begin detailed engineering for California’s HSR proposal between Los Angeles and San Francisco, let alone the nine other intercity corridors that the White House has envisioned.
On Labor Day, President Obama proposed a $50billion transportation infrastructure program that would include 4,000 miles of rehabbed and new railway track. The proposal calls for integrating HSR projects into the next surface transportation bill, a promising step that would ensure some level of federal commitment to the program over the five- or six-year life of the bill. But again, the president did not specify how he would finance HSR or the larger infrastructure program other than to say that his administration “is committed to working with Congress to fully pay for the plan.”
The president’s reticence raises a legitimate question: Can the nation afford HSR in a time of looming federal deficits?
The answer is yes – financing HSR is entirely feasible, but will only happen if the administration and its congressional allies take bold steps to rebalance our transportation priorities. Fortunately, there is both a funding source and a road map for moving from today’s scattershot federal transportation spending to a results-driven enterprise.
The funding source is the Highway Trust Fund, with approximate funds of $52 billion a year. Allocating a portion of highway funds for rail construction is an equitable way to wean drivers away from auto travel by providing them with a faster, safer, and more environmentally sound alternative.
Congress could easily allot $5 billion a year for HSR construction – without an increase in the gas tax – by cutting out earmarks and formula-based grants that now soak up billions of dollars, according to the General Accountability Office (GAO). Such fund reallocations could not only jumpstart HSR projects but serve as seed money for public-private partnerships to get the work done.
Already, international rail operators have expressed interest in competing for high-speed train contracts in the U.S. But these groups are waiting for the Obama administration to lay out a comprehensive financing plan before structuring bids. The use of a well-established and reliable source of transportation financing could make these deals happen.
Tags: 2011-14 budgets, California’s HSR, China, federal commitment, federal deficits, GAO, gas tax, General Accountability Office, high-speed rail, Highway Trust Fund, HSR, international rail operators, Interstate Highway System, Labor Day, Los Angeles, Mark Reutter, Obama Administration, public-private partnerships, San Francisco, surface transportation bill, Transportation, transportation fund, transportation infrastructure
[...] I’m the bigger man: — Smarter high-speed rail financing. [...]
[...] Mark Reutter : (PPI Policy Memo) A Smart Way to Finance High-Speed Rail: Restructuring the Highway T…: “Since announcing an $8 billion “down payment” for high-speed rail development, the Obama administration has been silent about how to pay for a program as ambitious as the Interstate Highway System. The interstates cost more than $250 billion in current dollars to build. A fast train network, based on systems being developed worldwide, most noticeably in China, could be equally expensive.” [...]
[...] better way to fund high speed [...]
[...] “High-speed rail has the potential to provide a fast, efficient and integrated alternative to driving and flying,” the report said. The best approach for genuine high-speed rail would be rights of way separate from existing freight lines – a policy strongly advocated by PPI (see here and here). [...]
[...] Obama can start by submitting to Congress a radically reformed six-year surface transportation appropriations bill to replace the expiring act known as SAFETEA-LU, as we argued in a recent memo. [...]
Great idea to restructure the Highway Trust Fund into a results-driven transportation fund.
I hate our intercity and some interstate highways for their trafic
High speed rail for the Midwest and West does not seem realistic. A high speed system would be underused leaving the cost unjustified. Better to upgrade the existing freight system to work properly. Average speed on routes is about 25mph for trains that are able to travel 60-80mph. In the south you’ll find route that are in such bad shape that 30mph is the speed limit; Chicago to New Orleans runs on some of that track. Most routes are a single track for two-way traffic, traffic averages less than half peak speed for all the stopping, standing and starting required to pass on-coming traffic; and what a waste of fuel and brakes.