From solar panel manufacturer Solyndra (which received a $535 million federal loan guarantee and later declared bankruptcy) to electric car-maker Fisker Automotive (which used a $529 million federal loan to create jobs in Finland), President Obama's landmark economic stimulus legislation is rife with failures. But the California High-Speed Rail project serves as a particularly sterling example of what happens when idealistic big government liberalism has to face cold, hard reality.
Obama has pushed high-speed rail throughout his presidency, billing it as a way to create jobs, improve transportation and protect the environment by reducing carbon emissions. The economic stimulus package included $8 billion in funding for bullet train projects, and Secretary of Transportation Ray LaHood told National Public Radio that "President Obama would like to be known as the high-speed rail president." In his 2011 State of the Union address, Obama called for giving "80 percent of Americans access to high-speed rail" within 25 years as part of his plan for "winning the future." His budget for 2013 asked for $47 billion in funding for high-speed rail over the next six years.
Though Obama has not wavered in his commitment to high-speed rail, residents of the Golden State, home to the nation's most ambitions rail project, have soured on the idea. A Los Angeles Times poll released last week found 59 percent of Californians now oppose the state's high-speed rail plan, and 69 percent said they would never or hardly ever ride the train even if it were built. The San Jose Mercury News, once a proponent of the project, called the plan "delusional" in an editorial over the weekend, urging the state legislature to kill it.
The about-face is no surprise. In 2008, when California voters approved issuing $9 billion in bonds to help finance the project, its cost was put at $33 billion. Since then, the cost has been estimated at $43 billion, a whopping $98 billion and, under the most recent plan, $68 billion. Though the original project was supposed to connect Sacramento and San Diego, the current plan is limited to travel between San Francisco and Los Angeles, though the first segment will be constructed in the less populated Central Valley.
California's independent scorekeeper, the Legislative Analyst's Office, urged the legislature to oppose Gov. Jerry Brown's funding request for the project, concluding that "funding for the project remains highly speculative and important details have not been sorted out." Specifically, the plan hinges on the federal government doling out $42 billion to help finance the project over time, even though California has only secured $3.5 billion in such funds through the stimulus legislation. The project would be fanciful enough during plush times, but it is especially extravagant as California lawmakers contemplate tax hikes and cuts to existing government services to close a $15.7 billion deficit.
Ironically, the project has even alienated environmentalists. The Sierra Club has blasted Brown for attempting to limit the environmental review process to expedite the project, while several counties have sued on the basis of environmental impact.
Obama and Brown may be too interested in their own legacies to admit the high-speed rail plan is unworkable, but the California legislature should put an end to this boondoggle while it still has a chance.