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Politics

In Killing Ohio’s High-Speed Rail Project, Kasich Eliminated Private-Sector Jobs He Promised To Create

Rather than acknowledge the number of jobs created or kept afloat by Democratic policies like the Recovery Act, Republicans insist that Democrats have done nothing to help create private-sector jobs. Future House Speaker John Boehner (R-OH) has said, “Washington has kept the private sector in bust while manufacturing a boom for the public sector.”

Boehner’s bosom-buddy Gov. John Kasich (R-OH) beat a similar drum on the campaign trail. Touting his plan to help the private-sector “quickly help create jobs,” Kasich insisted he would help “improve the atmosphere in our state for real business development” by meeting “the needs of businesses to overcome” governmental “snafus.” But Kasich undermined his rhetoric by killing Ohio’s high-speed rail project. In doing so, he derailed many businesses’ economic development plans and effectively killed the private-sector jobs he promised to create, leaving one businessman to call his decision “unbelievable,” “mind-boggling,” and “naive”:

Locally, certain not to happen is construction of a $15 million facility planned for Columbus by US Railcar Co. The plant would have employed up to 200 when fully staffed, said Mike Pracht, president and chief executive officer of the Columbus-based railroad-car manufacturer.

“It’s unbelievable these states would send back $400 million and $800 million in free money,” Pracht said. “It’s mind-boggling.”

“The only thing I can compare it to is the interstate-highway program back in the ’60s. Where would Ohio be today if it opted out of the interstate highway system? To suggest passenger rail would be any different is naive.”

Pracht said that in addition to the jobs his company would have added, abandoning the rail plan negates millions of dollars in potential development that would have clustered around each rail station along the 258-mile route.

Pracht’s anger is legitimate. The Cleveland developer Forest City Enterprises was planning projects that would create $180 million of taxable property. Dayton, OH anticipated around $250 million worth of downtown development around the rail station and, in Columbus, OH, the rail line “was expected to spur business development” and “provide a link between Downtown and Port Columbus.” But, as Forest City’s spokesman put it, “Clearly, it won’t happen now. It’s a governmental decision.” A decision that has already cost Gov. Scott Walker (R-WI) private-sector jobs as well.

But Kasich is “unrelenting” in his mission to overtly rebuke his campaign promises. While acknowledging that the train would create private-sector jobs, Kasich’s spokesman Rob Nichols scoffed Kasich wasn’t going to build a train that “will cost taxpayers.” A curious excuse given the fact that Kasich is perfectly willing to spend taxpayer money to “pay for security improvements” at his own private residence. Because Kasich is choosing to be “the first Ohio governor in a generation” to live in his private residence rather than in the already secured governor’s mansion, Ohioans will now pay for “around-the clock security at the Kasich home” as well as at the official residence.

Decisions like these help to explain the seven point drop in his approval rating before he’s even taken office. But rather than rethink high-speed rail and his other poor economic policies, Kasich is committed to driving the state into further economic disaster. As Nichols said, “We had the debate. The train is dead. The matter is closed.”

Politics

Tea Party Gov.-Elect Walker Compels Business To Leave State After He Kills High Speed Rail In Wisconsin

Even before taking office, Republican Govs.-elect John Kasich (OH) and Scott Walker (WI) swiftly delivered on their “promises to kill America’s future” by rebuking a total of $1.2 billion in stimulus funding for high-speed rail projects in their states. Shunning the $810 million for the long-planned Wisconsin rail project, Walker promised to kill the Milwaukee-Madison link if President Obama tried “to force this down the throats of the taxpayers.”

But campaign rhetoric has very real consequences. Last Thursday — on the same day the World Congress for High Speed Rail announced the next HSR Congress will be held in America for the first time — Transportation Secretary Ray LaHood pulled the funding from Ohio and Wisconsin, offering it instead to states more eager to spur economic development. What’s more, because of Walker’s narrow-minded politics, the Spanish train manufacturing company Talgo, which moved into Wisconsin for this project, is closing its Milwaukee plant and taking the much-needed jobs with it:

Talgo Inc., the Spanish manufacturer of high-speed train cars, will abandon its plant in Milwaukee in 2012, according to Nora Friend, a spokeswoman for the company.[...]

“We can’t stay and manufacture in Milwaukee without the high-speed rail to Madison,” Friend said. “This is terrible news.”

Friend said the state’s decision to back away from the high-speed rail project sends a terrible message to businesses considering locating in the state.

“We were encouraged by the business community,” Friend said. “We are really discouraged by what has happened.”

State residents should also be discouraged, she said. Talgo and the construction of the rail line would have created jobs badly needed in the construction industry.

“For anybody to think that there is another $800 million to invest in another project is foolish,” she said. “There is no other pool of money.”

Talgo currently employs 40 people in Milwaukee, WI and “was hoping to grow their staff to as many as 125 to fulfill the orders” that current Gov. Jim Doyle (D) and his administration had made in preparation for the project. Those orders would’ve spurred some 13,000 badly-needed jobs in a state facing a 7.8 percent unemployment rate. (Ohio will lose 16,000 jobs.) Instead, Talgo plans to take that business to three of the states that will share in the federal money taken away from Wisconsin and Ohio, most notably Florida.

Florida’s Gov.-elect Rick Scott (R) also sounded off against high-speed rail during his campaign but, unlike Walker and Kasich, has waffled on whether he’d actually kill the project. With over $2 billion in stimulus money and the prospect of new business flocking to the state, Scott isn’t as willing to shun such potential economic development as his Tea Party brethren.

But Wisconsinites should not be fooled by the flight of business. As he said on election night, Walker’s victory means “Wisconsin is open again for business” — regardless of what actually happens.

Yglesias

Pity the Northeast Corridor

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If the Boston-to-Washington megalopolis were its own country it would have over five times the population of Sweden and a population density higher than any European country. In other words, nobody woud say it was an area unsuited to intercity passenger rail. Which is no doubt why Amtrak’s Northeast Corridor features by far the best and most useful service in the system. But by international standards, the Acela is unimpressive so it’s good to see Amtrak coming up with a plan that can do better:

Amtrak is unveiling a $117 billion, 30-year vision for high-speed rail on the East Coast that would drastically reduce travel times along the congested corridor. At a news conference at Philadelphia’s 30th Street Station on Tuesday, Amtrak President Joseph Boardman said the proposal is at the visionary stage, and there’s no funding plan in place. It aims for high-speed rail by 2040.

Boardman says the Next-Gen High Speed Rail line would reduce the travel time between Washington, D.C., and New York City from 162 minutes to 96 minutes. The travel time between New York and Boston would go from 215 minutes to 84 minutes.

Obviously, that’s a ton of money. But it also highlights the central problem with our current approach to rail. The Obama administration’s high-speed rail initiative is not only pretty stingy, it’s also spread incredibly thin because that’s what you get when you need to frame initiatives that can be approved by a congress based on representing distinct geographical areas. Any kind of national legislation that would raise $117 billion for northeast rail service would need to also spend a ton of money on rail service elsewhere in the country where the case for massive investment is much weaker. We’re essentially destined to be perennially under-investing in the northeast corridor and a handful of promising city pairs (Tampa-Orlando, Portland-Seattle) scattered around the country while sporadically over-investing elsewhere.

Presumably the advantage of some kind of privatization of transportation infrastructure is that it would allocate investment capital more efficiently. But the world being what it is, in the real world we’d be much more likely to get a giant boondoggle of one sort or another. If there’s one thing I’ve learned from the 111th Congress it’s not to expect anything to be done in a reasonable way.

Yglesias

A Country After the Blogosphere’s Heart

Germany not only features supertrains that can carry you swiftly from city-to-city, but some of the trains in question—including the one I’m currently on—have Wifi. Admittedly, not the fastest connection I’ve ever seen but pretty useful nonetheless.

Yglesias

Freight Rail’s Anti-Trust Exemption

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An alert industry observer brought to my attention legislation by Senator Herb Kohl (D-WI) aimed at revoking the anti-trust exemption the freight rail industry currently enjoys. I don’t want to claim to be an expert on all the ins-and-outs of this but my understanding is that this would be a mistake and that it’s good that Jay Rockefeller (D-WV) has switched sides and is now joining Sens. Kay Bailey Hutchison, Frank Lautenberg, and John Thune in opposing this.

One of the reasons the rail situation in the United States has gotten so bad is because of a lot of infighting between the freight rail people and the passenger rail and transit people. More recently, however, the OneRail coalition has come together, which recognizes that rail advocates of all kinds have a great deal in common and can best advance their goals working together. A strong freight rail industry can and should be an important part of America’s transportation network, both because of its own intrinsic benefits (this is a very energy efficient way of moving stuff) and also as part of building a rail system that’s robust enough to also support viable passenger traffic. The fact that rail shipping rates are rising reflects the fact that rail is an appealing option under present conditions. It looks to me like an argument for increasing freight rail capacity not for harsher regulations.

Yglesias

John McCain Repeats Vegas HSR Lie, Adds New Non-True Details

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Given that legislators who want to provide accurate information to their constituents have no had ample time to learn that the stimulus package does not contain an $8 billion earmark for high-speed rail between LA and Las Vegas, I’m going to go ahead and call John McCain a liar:

So, we will be seeking fair and transparent use of the money. I believe that Arizona can compete with any other state or locality to get the much-needed money. Already we’re seeing a good example. There was $2 billion in the Senate bill of the stimulus package for light rail; there was zero in the House. It came out of conference – only Democrats, no Republicans in the room – with $8 billion for light rail. And guess where it’s going to go? A light rail between Las Vegas and L.A. Everybody knows that.

Could we have competed for that money? Maybe so. So it’s business as usual in Washington, and I think that Americans are generally very disappointed. Sorry for the long answer.

It can’t be the case that “everybody” knows that because it’s not true. The thing that John McCain wants where different states can compete for the high-speed rail money is what the bill already says. Except McCain has piled ignorance onto dishonesty by confusing high-speed rail (advanced passenger trains that run between cities) with light-rail (relatively low-capacity trains used for intra-city mass transit). They have a light rail system right in Phoenix so it’s not as if there’s no way he could have informed himself about these issues.

Media

Politico‘s David Rogers Catches Republicans Lying About High-Speed Rail, Won’t Call Them Liars

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David Rogers has a piece in Politico that offers a nice summary of the recovery plan’s actual high-speed rail provisions and the direct role of the White House in securing them:

The $787.2 billion economic recovery bill — to be signed by President Barack Obama on Tuesday — dedicates $8 billion to high-speed rail, most of which was added in the final closed-door bargaining at the instigation of White House chief of staff Rahm Emanuel. [...] The same Maine and Pennsylvania Republican moderates who had criticized Obama’s school construction initiative were more accepting of the rail funds, since the Northeast corridor has a major stake in more improvements. To help pay for the added cost, a business tax break — providing a five-year carry back for net operating losses — was narrowed to keep the focus more on smaller firms with receipts of less than $15 million.

Needless to say, this reality is at odds with the made-up story conservatives have been telling all weekend about $8 billion being earmarked for a train to Las Vegas. And Rogers, as we’ll see, knows what the truth is, knows what conservatives have been saying, and knows that the two are different things, but he can’t quite seem to describe what’s happening with regular English words:

At the same time, conservative Republicans seemed almost blind to Obama’s role. Instead, in their campaign to find pork barrel projects in the stimulus bill, they painted the whole funding as a scheme by Senate Majority Leader Harry Reid on behalf of Las Vegas interests seeking a rail link to Los Angeles. “Sin City to Tomorrow Land” was one description.

Here is Rep. Candice S. Miller (R-Mich.) explaining her vote against the bill Friday despite the benefits to her home state: “Michigan is a state of about 10 million people, and we are the hardest hit, as I said, by this economy. And yet we are expected to get approximately $7 billion from this bill. And apparently the Senate majority leader has earmarked $8 billion for a rail system from Las Vegas to Los Angeles? You have got to be kidding. You have got to be kidding.”

Rep Miller wasn’t “explaining” anything, she was lying to her constituents. Nor were conservatives running a “campaign to find pork barrel projects int he stimulus bill” they were inventing fictional projects. Nor were obscure House backbenchers like Miller running a rogue operation here. House Minority Leader John Boehner led the charge on peddling this lie, and Senator Jim Demint was on the case as well.

Update

Incidentally, it can’t be said often enough that while a special earmark for LA-Vegas HSR wouldn’t be such a hot plan, building an HSR link between LA and Las Vegas is a perfectly good idea and very much should be eligible for federal assistance.

Yglesias

Vegas Baby, Vegas!

Some curious logic from Jim DeMint’s office:

The President has a point that taxpayer money should not be used to pay for Wall Street fat cats to fly to Las Vegas but why is it okay for taxpayer money to be used to help pay for Hollywood elites to get there on a fancy gambling train? And why are we subsidizing leisure in a stimulus bill rather than encouraging work and greater productivity?

Several points. One — there’s no such provision in the bill. Two — there are two million people in the Las Vegas metro area, so it’s not as if taking the train to gamble is the only conceivable use of such a route. Three — lots of people go from L.A. to Las Vegas, it’s not an “elites only” option. I would refer Senator DeMint’s staff to this well-known scene from Swingers:

The larger rhetorical theme here seems to be that DeMint believes there should be no infrastructure projects of any sort in Southern California because any such project would, per se, be a taxpayer subsidy to “Hollywood elites.” It’s a pretty repugnant sentiment. For whatever reason, conservatives are constantly allowed to get away with this business of summarily dismissing vast regions of the country as unworthy and never get called on it. But this sort of thing is leading the movement on a direct (albeit, non-rail) route to a Dixie-only ghetto.

Yglesias

Boehner Slams Mythical Vegas HSR Project, Ignores Ohio Rail Opportunity

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The madness continues on the right-wing’s crusade against a mythical high-speed rail to Las Vegas project that Harry Reid is alleged to have snuck into the stimulus bill. “Tell me how spending $8 billion,” asked House Minority Leader John Boehner (R-OH) on the floor, “in this bill to have a high-speed rail line between Los Angeles and Las Vegas is going to help the construction worker in my district.”

For one thing, if we stuck by the standard that members of congress should only agree to fund infrastructure projects located in their own districts, then obviously we’d have no infrastructure at all. This is a debate that I thought we settled in the days of Henry Clay. But beyond that there is no such provision in the bill. This, by contrast, is an accurate description of the high-speed rail provisions of the Recovery Act:

The Stimulus Plan includes two provisions modeled after the Act that finance high-speed rail development. First, the Stimulus Plan provides a $2 billion grant for high-speed rail projects that will remain available until September 30, 2011. The grant will be distributed among applicant states, interstate compacts, public agencies having responsibility for providing high-speed rail service and Amtrak for capital projects associated with inter-city passenger rail services reasonably expected to reach speeds of at least 110 miles per hour. The Secretary of Transportation will have discretion to award grants based on an extensive set of criteria, including the legal, financial and technical capacity of the applicant to carry out the project; compatibility with relevant national plans; and anticipated economic, environmental and transportation effects.

In a last-minute change, the total quantity of funds available was increased. But there’s no special plan for Las Vegas. The money will be spread all across the country. As it happens, I think an LA-Vegas HSR line is a perfectly reasonable project. But in practice the areas that will get a leg up should be the Federal Railroad Administration’s officially designated high-speed rail corridors. As it happens, LA-Vegas doesn’t make the cut. But guess who does have such a corridor? Ohio!

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Indeed, the existing plan is a bit freakishly Ohio-centric, offering both a Cleveland-Toledo-Chicago line and a Cleveland-Columbus-Cincinnati-Indianapolis corridor while leaving things like Houston-Dallas and Orlando-Jacksonville (and, indeed, LA-Vegas) off the list. Long story short, John Boehner doesn’t know what he’s talking about and his position on this issue would imperil both short term jobs for Ohioans and an opportunity to substantially improve Ohio’s long-run capacity for economic growth.

Yglesias

High-Speed Rail in the Stimulus

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Good news for people who like fast trains as it seems a significant amount of high speed rail funds made it into the stimulus:

And while many initiatives were scaled back as Congress and the White House sought to cut the overall cost, there were some surprise increases, including a quadrupling of money for high-speed rail projects to $8 billion.

The White House pushed for the added money in the final rapid-fire negotiations, seeing it as a tangible way to create jobs and benefit different parts of the country. It also added a futuristic element to legislation that has been criticized as lacking forward vision.

I’m glad to see this happen, though it’s still the case that my first, second, and third preferences for transportation funding in the stimulus would have been money for mass transit system operating costs. The really good news about this is that my understanding is that the President took a personal interest in this provision, which is crucial because building-out an HSR network in such a big country would require a lot of followthrough.

Meanwhile, it seems that Harry Reid was talking about this provision and mentioned the idea that a high-speed rail corridor from Los Angeles to Las Vegas might be eligible for some of the money. That’s true. It’s also, I think, a pretty good idea. But some conservatives have decided to portray this as Reid sneaking a special “high speed rail to Las Vegas” provision into the stimulus package. There is no such provision and he did no such thing. The United States has many metropolitan areas and no true high-speed rail corridors. Consequently there are a lot of plausible city pairs and corridors that could benefit from these measures. My guess would be that the folks best-positioned to take advantage of this would be in California where they’ve already got the HSR ball rolling. Pennsylvania also has an actively ongoing initiative to upgrade service to Pittsburgh and Ed Rendell puts a high priority on this sort of thing and Arlen Specter was a pivotal Senator in pulling the deal together, so they might benefit.

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