As we repeatedly explained at this blog during the campaign, the New Hoovers have it in for high speed rail. HSR is a necessary part of California's economic recovery, but Republican politicans - from Arnold Schwarzenegger to GOP legislators - are bent on using this economic crisis to achieve the dismantling of government that they could never get during normal times. They have used the 2/3rds rule and the governor's veto power to prevent a balanced budget from being enacted. As a result California has had to borrow money to pay for basic operations, but the strain of that borrowing has nearly exhausted our short-term borrowing capacity.
As a result of Arnold's most recent budget-blocking action the Pooled Money Investment Board had to cut off all funding for infrastructure projects - throwing a whopping 200,000 people out of work. As an AP article explains that action jeopardizes HSR planning efforts:
The state treasurer says the high-speed rail board won't be able to tap any of that money until lawmakers pass a balanced budget.
Without an agreement to close the budget gap, the treasurer won't be able to sell any bonds and won't allow the board to get a loan to tide it over until the bonds are sold. The state's loan fund, the Pooled Money Investment Account, is needed for other state operations, said Tom Dresslar, a spokesman for Treasurer Bill Lockyer....
Carrie Pourvahidi, one of the rail board's deputy directors, said the board is counting on getting $29.1 million from the Pooled Money Investment Account to pay for its operations in the first half of 2009.
Without that money it would have to shut down in late January or early February, she said.
[Mehdi] Morshed said he doubts any federal money could be allocated quickly enough to fill that void.
"If we can't pay our bills, we would just have to stop spending, which means we would have to tell our contractors to stop work. Then, hopefully, later on, when we have the money, we can pick it up," he said.
As you may remember we just went through this mess - during the summer Republicans blocked passage of a budget for three months, delaying the delivery of the updated Business Plan until just after the November election. When the state is out of money the CHSRA cannot continue its planning operations. This current delay - again caused by Republican intransigence - could cause consultants to leave the HSR project:
But if the state does not resolve its own fiscal problems in time to keep the board operating, even a short-term shutdown could prompt some of the engineers, planners and environmental consultants who have been working on the project to abandon it for more reliable clients, he said. That could cause delays.
"The federal government's going to pump billions into infrastructure nationwide," Morshed said.
"Then everybody's going to scramble for the people who are going to deliver those projects. Whoever has their hands on somebody, they are in better shape than the other person. If we lose some (consultants), we may lose them for good or a very long period of time."
Arnold Schwarzenegger needs to get his head out of his ass and sign the Democrats' budget plan. Otherwise California is going to suffer for quite a long time - the infrastructure projects Arnold championed in his Newsweek op-ed will be severely weakened and compromised by this ongoing crisis. Not to mention the effect of California being thrown into an outright economic depression which HSR is supposed to help alleviate.
Federal aid will still be necessary to complete the project and while that looks more promising, New Hoovers in Congress are beginning to stir in their own opposition to infrastructure stimulus spending:
House Minority Leader John Boehner of Ohio said he has "grave reservations about taking $1 trillion from struggling taxpayers and spending it on government programs." He suggested tax cuts as a better alternative to kick-start the economy.
As far as I can tell Republican politicians in Sacramento and Washington, D.C. are, instead of trying to help resolve one of the worst economic crises we've faced in 75 years and help build for our future, are using the crisis to settle old scores and trying to reverse what remains of the New Deal.
Canadian author Naomi Klein described this phenomenon as the shock doctrine. And it's now threatening to cripple the HSR project California voters approved last month. Things were bad in the 1930s, but at least our government wasn't being held hostage by a clique of ideologues determined to score points even at the expense of the economic security of millions of Californians, of the state's future prosperity.