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Hearing Highlights Missteps in Administration's High-Speed Rail Program

Press Release

Location: Washington, DC

Transportation and Infrastructure Committee Members and witnesses outlined growing concerns with the Obama Administration's high-speed rail program. Although sold by the Administration as a high-speed rail program, over $10 billion in funding has been scattered to projects across the country under the program, with the very real possibility that no high-speed rail service will result.

"Since the passage of the Stimulus, the President's high-speed rail program has gone completely in the wrong direction," said Committee Chairman John L. Mica (R-FL). "Before the Stimulus, I worked to include language to create a blueprint for the development of U.S. high-speed rail in the 2008 Passenger Rail Investment and Improvement Act. And I was optimistic when the President made developing high-speed rail a priority and included $8 billion in funding in the Stimulus.

"Unfortunately, the vast majority of the projects selected by the Administration are not high-speed at all. This bait-and switch gives high-speed rail in the U.S. a bad name," Mica continued. "In March 2011/2010, GAO reported the Administration's project selection process lacked transparency, and we don't fully understand why projects were chosen. We're funding slow-speed projects all over the country, most of them for Amtrak, that will not result in high-speed service. $3.6 billion -- more than one-third of the $10.1 billion that has gone to projects -- was turned back by states. The one project funded that offered the most hope for achieving high-speed, the California project, appears to be in disarray. In fact, the Committee will hold a hearing specifically to review this project next week.

"We need one high-speed rail success, and our country's best opportunity to achieve high-speed rail is in the Northeast Corridor," Mica concluded. "Now that federal funding for this program has been stopped, we have an opportunity to learn from those mistakes and make the needed changes to develop at least one truly successful high-speed rail corridor in this country."

"I support high-speed rail where it makes sense, but the President's vision of providing 80% of Americans with access to high-speed rail service is unnecessary and isn't going to happen," said Railroads, Pipelines and Hazardous Materials Subcommittee Chairman Bill Shuster (R-PA).

"Instead of finding one place to do high-speed rail, and do it right, the Administration has spread the money too thinly all over the country. Because of this misguided approach, we're not getting any high-speed rail. The only result will be a wasted opportunity.

"I urge this Administration to reevaluate what it's doing with this program, and to move its high-speed rail efforts in a new direction," Shuster added. "We can develop high-speed rail in this country, but only where it makes sense. And nowhere makes more sense than the Northeast Corridor."

Witnesses testifying at today's hearing included Ken Orski, a former federal transportation official and transportation policy consultant. Orski highlighted the Administration's missteps in implementing its purported plan to develop high-speed rail in the United States.

"The Administration's first misstep, in my judgment, has been to falsely represent its program as "high-speed rail,' thus, conjuring up an image of bullet trains cruising at 200 mph, just as they do in Western Europe and the Far East," Orski stated in prepared testimony. "It further raised false expectations by claiming that "within 25 years 80 percent of Americans will have access to high-speed rail.' In reality the Administration's high-speed rail program will do no such thing. A close examination of the grant announcements shows that, with one exception, the program consists of a collection of planning, engineering and construction grants that seek incremental improvements in existing facilities of Class One freight railroads in selected corridors used by Amtrak trains."

Orski continued, "The Administration's second mistake, in my opinion, has been to fail to pursue its objective in a focused manner. Instead of identifying a corridor that would offer the best chance of successfully demonstrating the technology of high-speed rail, and concentrating resources on that project, the Administration has scattered its nine billion dollars on 145 projects in 32 states, and in all regions of the country.

"Ironically, the Northeast corridor, where high-speed rail has the best chance of succeeding, has received scant attention. And yet, this corridor is probably the only one in the nation that has all the attributes necessary for effective and economical high-speed rail service," Orski stated.

R. Richard Geddes, associate professor at Cornell University and visiting scholar at the America Enterprise Institute, testified, "High-speed passenger rail (HSR) is a commendable public policy objective that can provide valuable public benefits. I strongly support HSR in the United States for those lines and routes where it makes sense. In this testimony, I justify that view by addressing some fundamental economic issues regarding HSR in the United States, as well as the use of private investment in passenger rail through public-private partnerships, or PPPs. This is important because, in my view, the most recent attempts to fund HSR in the United States did not include adequate provisions to attract and retain the private investment that is critical to conserving scarce public resources.

Geddes continued, "A project is economical if the revenue from all sources is sufficient to cover operating costs while making a contribution to capital costs, including paying off debt and providing the investors who financed its capital with an adequate return on their investment. This is true regardless of whether the investors in question are private individuals or taxpayers.

"If a high-speed rail project is economical in this sense, then private investors will be willing to fully fund its capital and operating expenses, and taxpayer subsidies will be unnecessary. In this case, the government's task is to create policies that attract and retain private infrastructure investment for the long term, and to monitor performance on the PPP contract."

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