Commentary

Recent Commentary

Written by Mark Pisano, Senior Fellow at the Price School of Public Policy, Past Executive Director of the Southern California Association of Governments, and Co-Chair of America 2050

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America 2050 convened a seminar in Healdsburg, California of the thought leaders in long-range planning in the United States in March of 2012 to consider next steps for deploying the America 2050 strategy that was developed in 2008, and deferred by the Great Recession and subsequent fiscal de-leveraging that resulted. Participants at the Healdsburg retreat examined demographic shifts that are occurring, such as the aging population and other factors effecting our future; the changes in strategy for infrastructure deployment, including the decentralization, diversification, and distribution - "3-D" approaches; and financing strategies, such as partnerships, that could be used to mobilize the vision contained in the America 2050 Prospectus.

Following the retreat, several papers have been prepared that outline an approach that could be used by regional partners in moving forward with initiatives to support the wealth creating dynamics of the nation's megaregions. It should be noted that these papers are background for developing an operating strategy in this period of transition.

The first paper, Demography as Economic Destiny, is an examination of how the demographic changes that were noted at Healdsburg will be affecting the economy of the country over the next several decades and how these changes are affecting the incomes, expenditures, and taxes paid by individuals. The advantage of the age dividend that was created over the past several decades and that accelerated growth in the past several decades, which was created by the ever-increasing working-age population, is described. Likewise, the age penalty that is resulting from the retirement of Baby Boomers, as well as the smaller growth rates of working-age population of subsequent generations is also described. Using elasticity curves developed from Consumer Expenditures Surveys (CEX), the paper analyzes the growth and tax implications of these changes. The slowness of the recovery and the duration of the economic and financial implications of what we are experiencing are described. Significant findings, such as slowing GDP growth and reduced growth in taxes paid to all levels of government by individuals, as well as slowing growth in income and expenditures, are described.

The final two papers describe the effect that these demographic changes will have on infrastructure deployment and financing. The first paper, 3-D: Infrastructure for California's Future, focuses on how these demographic and taxing implications will effect what infrastructure will be built and how we will finance infrastructure. The basic conclusion is that we will be moving to capture the benefits of the wealth creating effect of infrastructure through use payments. New partnerships and institutions will be created using the principles described in the second paper, which was published in the National Academy of Public Administration's "Memos to National Leaders: Partnerships as Fiscal Policy". Together these papers provide thoughts that will enable regional partners to begin the process of developing new approaches to grow our megaregions and nation.

GOP Bills Would Cut Funding for Rail, Walking, Biking

Last week, more than two years after the nation's last five-year surface transportation law expired, the House of Representatives introduced its proposed legislation for rewriting the nation's transportation laws. And boy, it is a doozy. 

Facing severely reduced gasoline tax receipts, the House Transportation and Infrastructure Committee has proposed to cut many of the non-highway programs in the transportation bill that help give people alternatives to driving. These include things such as Transportation Enhancements, which provide set-asides for local projects that improve the transportation experience in communities (the ceiling of Grand Central Terminal was restored with a Transportation Enhancement grant); and other programs that reduce the environmental impact of transportation and promote pedestrian and biking facilities. The bill also reduces operating funding to Amtrak and cuts a capital grant program to relieve congestion on rail corridors.

The cuts to these programs were largely expected, but what provoked anger and surprise among many transportation experts was a separate measure by Ways and Means, the committee that authorizes the revenues for the transportation bill, that severed the 30-year-old link between highways and transit in the transportation trust fund. Since 1982, when President Ronald Reagan signed a bill that dedicated a penny of the federal gas tax to transit, transit agencies have had a steady source of reliable federal funding that allows them to keep their systems in good repair, replace outdated infrastructure and equipment and plan for the future. Dedicated funding for transit, which today amounts to 2.86 pennies of the 18.3 cents per gallon gas tax, has allowed systems like the New York Metropolitan Transportation Authority to pull back from the brink of disinvestment and make five-year capital plans that include projects like the Second Avenue Subway and East Side Access that are now under way.

Commentary by Osman Dadi

Accommodating high-speed rail trains in the San Francisco peninsula has been a contentious topic because of potential noise and visual impacts on the surrounding communities. Recently, the California High-Speed Rail Authority announced its support for a "blended approach" that would utilize the existing Caltrain corridor. But what if a solution could be found that ensures grade separation between trains and automobiles while also opening up dramatically enhanced commuting options for bicyclists? 

Reprinted from RPA's Spotlight on the Region.
By Daniel Ferry, Summer Associate, America 2050

ChineseTrainThe tragedy last month that saw 40 people killed aboard a Chinese high-speed train has been used in the United States as fodder to attack the very idea of investing in passenger rail.

"[S]o much for the grand project ... that President Obama held up as a model for the United States," said Charles Lane recently, writing in the Washington Post.

This kind of logic doesn't hold up. For one thing, the death count pales in comparison to the tens of thousands of Americans killed in automobile accidents - nearly 35,000 every year, the equivalent of a full Boeing 737 crashing every single weekday.

Still, in an emotional way it's easy to see how such a high-profile disaster can discredit the vaunted Chinese high-speed rail project. It was just in January that President Barack Obama did indeed look, with few qualifications, to China as a model, comparing China's clear progress in high-speed rail - 5,000 miles already constructed, with speeds regularly exceeding 200 mph - with the space race with the Soviet Union during the Cold War.

"Our infrastructure used to be the best - but our lead has slipped," said Obama in his 2011 State of the Union Address. "China is building faster trains.... This is our generation's Sputnik moment. At stake is whether new jobs and industries take root in this country or somewhere else."

Even before the fatal crash, some of the shine was already wearing off of China's vaunted rail system. Last February, Chinese Minister of Railways Liu Zhijun, who had presided over the high-speed rail building boom, was abruptly dismissed from office after charges of rampant corruption.

Now anxiety is mounting over how the Ministry will pay the debts it has incurred, and reports began to emerge last spring that the breakneck pace of construction was only possible because workers cut corners and compromised safety. Such concerns ultimately led the Ministry of Railways to reduce the maximum speed of trains from 217 to 186 mph, but that did not prevent the collision in Zhejiang.

So, do China's recent problems suggest that the United States should quit pursuing high-speed rail? Not at all. Recent events should rightfully dampen the exuberance that led China to ignore safety considerations. Yet, American observers would be wrong to dismiss high-speed rail as a powerful driver for the future of the United States. High-speed rail still makes sense for Americans, for reasons that China's experience will likely reinforce.

While China may have overshot in attempting to build too much too quickly, there is good reason to believe that the Chinese investment in passenger rail is ultimately still a valuable and beneficial project.

That's the view of investment bank Morgan Stanley: their research arm published a May 15th report, China High Speed Rail: On the Economic Fast Track, which found that "[h]igh-speed rail is key to China's balanced, sustainable double-digit growth." The authors concluded that despite setbacks, China's buildout will boost the nation's economy and standards of living by "improving market access, encouraging population mobility, and enhancing logistics efficiency ... which in turn will stimulate innovation and creativity and lead to the creation of new businesses in the long-term."

We here in the United States have made critical infrastructure investments of this scale before: between 1950 and 2000, as the country grew by 130 million people, the United States spent nearly $500 billion (inflation-adjusted) developing the Interstate Highway System. This investment has paid dividends, underpinning a half-century of strong economic growth, but today highway congestion chokes our cities and worsens faster than we can build new roads.

With many of our busiest highways unable to add capacity due to urban development, we need a new method of connecting our cities. High-speed rail can meet this need, moving more Americans faster and more efficiently, helping to relieve our over-burdened roads and airports, and reducing our dependence on foreign oil. As we prepare to add 140 million new Americans by 2050, we must again invest in our future.

We don't need high-speed rail because China has it. We need high-speed rail because, despite its initial cost, it is the best way of tying the country together, uniting regional economies, and facilitating the mobility that will allow the United States to compete and win in the new global marketplace. Americans shouldn't draw hasty conclusions from the Chinese case because, simply put, American high-speed rail is for Americans.

In a recent policy analysis, "Intercity Buses: The Forgotten Mode," Cato Institute transportation analyst Randal O'Toole hails the rise of intercity passenger bus service, and recommends several reforms to promote these services. Among his recommendations are the immediate cessation of funding for Amtrak and the High-Speed Intercity Passenger Rail program. This assertion reveals a fundamental misunderstanding of the strengths and value of passenger rail. Intercity buses and passenger rail should be seen as Buses in trafficcomplementary services in a balanced transportation network, not as mutually exclusive alternatives. In making his case, O'Toole alleges that intercity buses require almost no public subsidies, and are safer than passenger rail. These claims are unproven at best and flatly incorrect at worst, and we shall address them in turn, but at the heart of the matter is O'Toole's flawed premise that transportation policy should reflect the needs of only the present, with no consideration to the future.

Yesterday, the budget deal hammered out over the weekend by Congress saw the light of day, revealing deep cuts for programs to expand rail infrastructure in the United States. The High-Speed Intercity Rail Program, which had been appropriated $1 billion in the temporary bill passed last week to stave off a government shutdown, was slashed to zero and $400 million was rescinded from the FY 2010 budget.

These cuts to the high-speed rail program are completely out of touch with continued and growing support for passenger rail in the United States. Just last week, 24 states, including 11 Republican governors, the District of Columbia, and Amtrak, half the country, applied for 98 rail projects totaling nearly $10 billion, four times the amount available. Amtrak recorded its 17th straight month of year-over-year growth in ridership and is on track to set an all-time annual ridership record, which was set last year.

So why is high-speed rail getting such a bad rap among some Republicans in Congress and in the news media?

Reprinted from RPA's Spotlight on the Region

By Robert Yaro, Co-Chair, America 2050

Across the water in Great Britain, the new conservative Prime Minister David Cameron has won great attention for his cost-cutting ways as he slashes funding for health care, police, prisons, housing, and even defense.

But one area has remained immune to Cameron's sharp blade: the country's emerging high-speed rail system, including the line under development running from London to Birmingham. In fact, Cameron is expanding funding for the system.

Cameron understands what apparently few of his conservative colleagues here do, which is that investing in high-speed rail is part of a sound investment in the country's future. And while Great Britain is a different country than the United States, its conditions and challenges are not as different as one might think. High-speed rail can work in the United States, as it will in Great Britain.

Watch the full episode. See more Need To Know.

Petra Todorovich, Director of America 2050, was featured on the most recent episode of a segment on PBS called, Fixing America. The segment invites big thinkers from a wide range of areas and asks them one simple thing: "How do we get America moving again in the right direction." Petra weighed in on the issue of investing in national high-speed rail network.