As the country approaches yet another fiscal cliff (though this time it is called a sequester), the President’s 2013 State of the Union Address outlined an aggressive program to address America’s deteriorating transportation infrastructure.
The President said, “America’s energy sector is just one part of an aging infrastructure badly in need of repair. Ask any CEO where they’d rather locate and hire: a country with deteriorating roads and bridges, or one with high-speed rail and internet; high-tech schools and self-healing power grids. The CEO of Siemens America – a company that brought hundreds of new jobs to North Carolina – has said that if we upgrade our infrastructure, they’ll bring even more jobs.”
Specifically, the President proposed “a “Fix-It-First” program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country.”
Although it is difficult to disagree with the call to improve America’s infrastructure, it’s also unfortunate that no specific plan was proposed to pay for these improvements. The fact that the country is likely to experience a sequestor whereby $85 billion from the budget will be slashed, resulting in a loss of 750,000 jobs (according to the Congressional Budget Office) and a lower economic growth rate, it’s unlikely any meaningful infrastructure improvement funding will occur.
Fortunately, there is still hope for the President’s call for high speed rail, right? At least that segment of the transportation industry will see a benefit, right? Well, perhaps not. A recent column by Daniel Hanson, and economist with the American Enterprise Institute, calls for an end to Amtrak. One might wonder why when Amtrak posted its best year in 2012 since 1975- it only lost $361 million.
Yes, it ONLY LOST $361 Million in 2012 – it’s best year since 1975. Given the relative success, or lack thereof, of the Amtrak system, why would high speed rail be a priority? Will it suddenly become profitable (or at least break even)?
At minimum, I agree with Hanson in that Amtrak should be required to submit a legitimate business plan to Congress showing how it will be in the black – even with federal funding.
Listen to my interview with Daniel Hanson discussing Amtrak and its financial comparison to the Interstate system. (From my local radio program)
The President’s call to action on infrastructure improvements with no specific funding mechanism, the upcoming sequestor with no solution in sight, and the failed Amtrak program, highlights the need for the American citizenry to demand real leadership both in Congress and in the White House.