Michael Grunwald’s High-Speed Rail Fantasies

Perhaps the one thing Time magazine's Michael Grunwald loves more than drone assassinations of American citizens and dissident journalists is heavily subsidized passenger rail. This is not the first time I’ve criticized Grunwald’s sloppy high-speed rail reporting, and it probably won’t be the last.

Over at Time, Grunwald takes issue with a recent New York Times story on President Obama's high-speed rail initiative. In particular, Grunwald attacks the Times article for referring to the over $10.5 billion in high-speed rail obligations as "$11 billion." Grunwald also argues that the Times' use of "spending" is an inaccurate way to describe the total obligations since actual outlays so far are only around $2.5 billion.

First, rounding up from $10.5 billion to $11 billion does not work against the main thrust of the Times article. And note that if Grunwald wanted to be really accurate, he would have noted, as the federal government has, that “approximately $10.6 billion” has been made available for high-speed rail projects.

Second, Grunwald doesn't seem to fully grasp budget lingo, yet spends much of his piece attacking the Times for supposedly misusing it. Now, "spending" is an imprecise term that could mean either apportionments, obligations, or outlays—or it could simply refer to the spending process, which involves apportionments, obligations, and outlays.

Grunwald is equating “spending” to mean “outlays,” i.e., funds disbursed by the Treasury. But it is unclear that the Times was referring to anything beyond the apportionments and obligations. Indeed, these appear to be the two offending sentences in the Times article:

High-speed rail was supposed to be President Obama’s signature transportation project, but despite the administration spending nearly $11 billion since 2009 to develop faster passenger trains, the projects have gone mostly nowhere and the United States still lags far behind Europe and China.

And the second:

Instead of putting the $11 billion directly into those projects, critics say, the administration made the mistake of parceling out the money to upgrade existing Amtrak service, which will allow trains to go no faster than 110 miles per hour.

The second sentence implies the projects funded by the federal government have yet to be completed—“which will allow trains…” Anyone familiar with the budget process knows reimbursements are generally how the federal government involves itself in infrastructure investment. It works a little like this: a state applies for a grant, the federal agency approves a grant, the state builds whatever project is supported by the grant, the state is reimbursed by the federal government when the project is completed. This is why the Federal Railroad Administration wrote in its 2011 announcement regarding the availability of funds rejected by Florida for the Tampa-Orlando I-4 rail corridor that “[t]he funding provided under these cooperative agreements will be made available to grantees on a reimbursable basis.”

While it is possible some readers of the Times believed, despite language to the contrary, that $11 billion is gone and all work funded by that money is completed, I am skeptical. The main point of the Times article is to compare President Obama’s lofty claims a few years ago to the reality today. Objectively, very little has happened and very little is likely to happen in terms of huge future high-speed rail investments necessary to support the president’s plan to give 80 percent of Americans access to high-speed rail by 2025, a project that would likely cost between $600 billion and $1 trillion to deliver. This simply isn’t going to happen and that's why the president's plan has been a complete failure.

Moreover, Grunwald gets basic facts wrong and ignores those that don’t suit his flawed arguments. Even Bill Vantuono, the editor of Railway Age who is strongly in favor of subsidized passenger rail, pointed out that “Grunwald made the same mistake about Amtrak’s Northeast Corridor services I’ve seen repeatedly, that it’s ‘profitable.’ It is—operationally, or ‘above the rail.’ Factor in the enormous capital and maintenance costs, and the math changes.” That is to say, Amtrak’s Northeast Corridor is not profitable, as Grunwald falsely claims.

One of individuals interviewed in the Times article is William Ibbs, a professor of civil engineering at UC Berkeley. Ibbs is frequently called on for testimony, and has been intimately involved in California’s planned high-speed rail link between Los Angeles and San Francisco. As the Times article notes,

C. William Ibbs, a professor of civil engineering at the University of California, Berkeley, said countries with successful high-speed rail projects had higher population densities, higher gas prices, higher rates of public-transportation use and lower rates of car ownership. “So it wouldn’t make any sense to have a high-speed rail train in most areas of the United States,” he said. “The geography is different and other factors are just too different.”

Ibbs’s view is widely shared by transportation scholars. In addition to problems facing the core line, the massive first- and last-mile distribution challenges (building feeder transit lines to serve the high-speed rail line) in a low-density environment weigh heavily against high-speed passenger rail investments. See Ibbs’s recent testimony before the California Senate for more on the grave challenges facing California and U.S. high-speed rail development:

Clifford Winston, a longtime transportation economist at the Brookings Institution, noted in 2012 that automated vehicle technology (often called “driverless cars”) will render high-speed passenger rail just another government money pit propping up obsolete technology:

The driverless car represents one of the most amazing breakthroughs in safety and quality of life in recent history. Instead of focusing on enormously expensive high-speed rail as our transportation future, the government would do well to stop hindering driverless cars by its obsolete thinking about our nation's roads.

Harvard urban economist Edward Glaeser, who admits he “would love to be pro-rail,” notes the math just doesn’t work for high-speed rail in the U.S. Even in supposedly ideal conditions, such as the rail-booster favorite Shinkansen system in Japan, researchers have found no evidence that high-speed rail service induces economic development. In addition, research from the OECD implies that ridership on Amtrak’s Northeast Corridor Acela service (at present speeds), which is in by far the most viable passenger rail corridor in the U.S., would need to more than double before it could be justified on cost-benefit grounds.

Continuing down the path Grunwald advocates would foolishly commit the United States to an outmoded, expensive, and inferior transportation technology. Instead, policy makers interested in improving mobility should focus on modernizing laws and regulations that may slow technological developments in the transportation sector.

When the private railroad industry convinced the federal government take control of their passenger service four decades ago, passenger rail wasn’t just then becoming uneconomic. For decades, railroads had been forced to cross-subsidize unpopular passenger rail service by government regulators. Freed from this inefficient mandate, one railroad executive remarked at the time that Amtrak primarily served as “a sentimental excursion into the past for legislators over 50.” With Grunwald and his railfan political allies still holding a great deal of power, this unfortunately remains true today.