U.S. plans to inject $53 billion into passenger rail

PHILADELPHIA Tue Feb 8, 2011 3:59pm EST

1 of 4. Vice President Joseph Biden and Secretary of Transportation Ray LaHood walk next to an Amtrak train at Union Station in Washington, February 8, 2011.

Credit: Reuters/Larry Downing

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PHILADELPHIA (Reuters) - Vice President Joe Biden on Tuesday announced an ambitious $53 billion U.S. program to build new high-speed rail networks and make existing ones faster over the next six years.

But the plan drew immediate fire from majority Republicans in the House of Representatives, who said building high-speed rail requires private investment rather than a government plan.

Biden, who estimated he has ridden Amtrak trains between Washington and his home in Wilmington, Delaware, some 7,900 times, made a strong pitch for rail transportation to enable the United States to compete and lead internationally.

"This is about seizing the future," he said, making the announcement at Philadelphia's busy 30th Street station with U.S. Transportation Secretary Ray LaHood.

The United States should follow the example of Japan and China and build high-speed rail, Biden said. "If we do not, you tell me how America is going to be able to lead the world in the 21st century," he said.

President Barack Obama's budget for fiscal year 2012, to be unveiled next week, includes $8 billion for the plan. The rest of the money would be allocated over the six-year time period.

Obama has said he wants to target investments in areas such as infrastructure while reducing spending to tackle the budget deficit.

Under the initiative, the Department of Transportation would choose corridors for new projects and increase U.S. use of the passenger rails.

Republicans in the House criticized the program and suggested it could face problems getting legislative approval.

In a joint statement, Transportation Committee Chairman John Mica and Railroads Subcommittee Chairman Bill Shuster expressed "extreme reservations" regarding the plan.

"This is like giving Bernie Madoff another chance at handling your investment portfolio," Mica said in the statement on the Transportation Committee's website, referring to the financier serving a 150-year prison sentence for running an estimated $65 billion Ponzi scheme.

Shuster said an unsound rail project "just prolongs the inevitable by subsidizing a failed Amtrak monopoly that has never made a profit or even broken even.

"Government won't develop American high-speed rail. Private investment and a competitive market will."

Biden's announcement follows Monday's news that Amtrak, the United States' largest passenger rail service, plans a $13.5 billion commuter rail project connecting New York City and New Jersey, reviving an idea rejected late last year by New Jersey's Republican governor, Chris Christie, as too expensive.

The project became a lightning rod in the run-up to the November 2010 election, pitting those calling for more federal infrastructure spending against those who said such projects were too costly.

Advocates say U.S. investment in high-speed rail lags many other countries and point to China, which plans to invest $451 billion to $602 billion in its high-speed rail network between 2011 and 2015, according to the China Securities Journal.

(Additional reporting by Jeff Mason and Wendell Marsh in Washington; editing by Mohammad Zargham)

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