June 3, 2009 / 11:20 PM / 10 years ago

U.S. states to lead in creating high-speed rail: Biden

WASHINGTON (Reuters) - Despite the U.S. government’s plans to spend $13 billion establishing high-speed rail across the country, much of the work to lay the tracks and send the trains chugging will fall to the states, Vice President Joe Biden said on Wednesday.

“We have no illusions. We know your budgets are strained,” Biden told a meeting of governors and state transportation officials.

“People say to me ... ‘Why the heck are you talking about high-speed rail all the time when these guys and these women are in a position where they’re having trouble balancing their budgets?’ Well, the payoff ... is really significant,” he said.

The federal stimulus plan enacted in February includes $8 billion for upgrading existing passenger rail service and developing high-speed projects. President Barack Obama included another $5 billion for the fast trains in his recent budget.

The Transportation Department will release guidance on June 17 on applying for stimulus funds and will announce how money will be distributed “later in the fall,” said Transportation Secretary Ray LaHood.

Biden told the governors the federal government would be “jumpstarting” a process “you all have been talking about but seemed so out of reach before.”

The private sector abandoned passenger rail operations decades ago after the government expanded highways and facilitated the rise of air travel. But governors have pushed for a passenger rail network that would zip travelers from city to city, thin air and road traffic and reduce air pollution.

Speaking with reporters after the meeting, governors from Midwestern, Atlantic and Southern states said they would find ways to squeeze money from budgets largely tapped dry.

Illinois Governor Pat Quinn said his state is allocating millions of dollars for rail and said he hopes to leverage private dollars. But he doubts the municipal bond market can round out the financing.

“We had to fight hard to make sure our legislature understood $400 million for high-speed rail is not piddly-diddly. This is a major investment in the future,” he said.

For Michigan Governor Jennifer Granholm, high-speed rail could give jobs to hundreds of workers in the state displaced by the downfall and subsequent bankruptcy filings of auto behemoths General Motors and Chrysler.

Documentary-maker Michael Moore, who chronicled GM’s decline in the 1989 film “Roger and Me,” earlier this week suggested GM be required to use its federal bailout to retool factories and “keep the current work force — and most of those who have been laid off — employed so they can build the new modes of 21st century transportation.”

Granholm appeared to agree with that view.

“I see this as a means of creating jobs — jobs building the system and jobs building those railcars, which right now are predominantly made in Europe,” she said. “Let me just say we have lots of capacity in Michigan and workers that are hungry and know how to make things.”

Editing by Dan Grebler

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