The economic crisis that has been slowly unfolding over the last year or so is growing worse by the day, and the incoming Obama Administration and its allies in Congress are already discussing plans for a new economic stimulus package, one that will likely include infrastructure spending. The figures being tossed around so far have been between $50 and $150 billion.
Paul Krugman today argues we need to think bigger - MUCH bigger:
All indications are that the new administration will offer a major stimulus package. My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion.
If we are talking about stimulus of that size, then $12-$16 billion for California high speed rail should be no problem. Some might argue that since construction won't begin until 2010 that it's not a good use of stimulus money. But as Krugman has argued before, this downturn is going to be long:
The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn’t needed. Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let’s get those projects rolling.
That makes Congress and the White House the next stop for our own high speed rail project, even as we continue to keep a close eye on the state legislature to ensure there's no backsliding. Quentin Kopp is optimistic about our prospects in Congress, according to an article in today's issue of Bond Buyer:
"I am satisfied from my readings that enthusiasm has increased in Congress for high-speed rail," said Quentin L. Kopp, chairman of the rail authority's board...
Kopp, a veteran of 12 years in the California Senate and a decade and a half on the San Francisco Board of Supervisors, laid out the challenge in political terms.
"Now we have to fend off other states," he said.
Of course a $600 billion package would make the competition among states for HSR dollars less intense. Even if there is much competition, California is in a very strong position to lay claim to federal HSR dollars. Nancy Pelosi and Dianne Feinstein have already shown their support for HSR, and having two of the most powerful members of Congress in your corner is a pretty damn good place to start.
Over email rafael pointed out that the renewable energy aspects of HSR would also appeal to President Obama's own desire to put energy independence at the forefront of his own policy efforts:
California HSR plus local/regional HSR feeders may become much more attractive to an Obama administration looking for worthwhile public works projects if proponents stress that these will run on renewable electricity. Transportation planners may care more about system capacity, but politicians are keen on energy independence right now.
What exactly is federal funding going to look like? It's highly unlikely that it's going to be a check for $12 billion. From the Bond Buyer article again:
the Authority expects to pursue funding sources that include straightforward federal grants, tax-credit bonds, and funding derived from carbon credits.
One thing we will need to ensure, along with the delivery of federal funding period, is that such funding is stable. Some mixture of the above seems quite workable assuming it adds up to the requisite amount.
It's clear that the global economic crisis is worsening, and all eyes are going to be on Washington DC for answers. We're going to have to make sure Congress and President Obama do the right thing for California and the nation by passing a large economic stimulus bill early in 2009 - a bill that must include funding for California high speed rail.