If America's air-travel system is any indication, the sky really is falling. Flights have been cancelled by the hundreds due to safety concerns. Five commercial airlines have gone out of business since the beginning of the year (three in one week in April), in large part because of unstable fuel costs and declining passenger demand. Six broad fare increases have gone into effect this year alone, along with new charges on everything from pillows to luggage.

At Philadelphia International Airport, average passenger delays have grown to more than 20 minutes, while bottlenecks at airports in the New York metropolitan area have become so chronic that the federal government has imposed flight caps and installed a new "airport czar" to make sense of the mess.

While the laws of supply and demand will undoubtedly correct some of the problems the airline industry faces, the future for air travelers is not so bright. Most economists agree that airline mergers, fewer flights, and more fuel-efficient planes will eventually help put the industry on stronger financial ground. Unfortunately, these very measures will also mean higher prices, less choice, and fewer amenities for passengers.

In the short term, passengers have two choices: fly less or pay more for an inferior service. But your administration could offer a creative, long-term solution to both our air-travel woes and the congestion on our roadways: high-speed rail (HSR).

For years, efforts to pass legislation that would make a significant investment in high-speed rail have been halted by a number of factors: the Bush administration's ideological opposition to government investments in infrastructure; the return of deficits; the lack of a direct source of funding; the hostility of the airline industry; and a wasteful and distracting debate over the future of Amtrak.

With the airline industry cutting routes and raising fares, the cost of a gallon of gas expected to continue to rise in the long term, and the unemployment rate going up, the time for a major investment in high-speed rail may finally be at hand.

Rail and Reality: Why America Needs High-Speed Trains

First of all, with our economy officially in a recession and unemployment rates projected to rise to levels not seen since the beginning of the 1990s, one of the strongest arguments for a major investment in high-speed rail is that it will help produce new jobs and promote economic growth over the long term. Most of the major high-speed rail proposals include forecasts of significant job growth. These projections usually include both direct job creation (temporary construction-related jobs during the building of the network) and indirect job creation (permanent jobs created as a result of the growth generated by the rail network).

Based on estimates done in the past for high-speed rail projects, we believe that for every $10 billion invested in high-speed rail, 40,000 construction-related positions and 112,500 permanent jobs will be created.¹ This ratio of investment to job creation (amounting to a cost of $65,573 per job) compares quite favorably to the recently enacted federal stimulus package. According to Treasury Secretary Henry Paulson, the $150 billion stimulus will only create 500,000 jobs (a cost of $300,000 per job). ²

Second, a major investment in HSR would decrease congestion at our airports and on our highways. A single railroad track, just six feet across, has the capacity of a superhighway 10 times wider. According to the San Francisco Bay Area Metropolitan Transportation Commission, an HSR system between Southern California and the Bay Area would attract enough passengers away from planes to replace approximately 200 shuttle flights each day. This would allow for more long-distance flights out of California's major airports, including increasingly profitable flights to Asia.

Third, HSR can also reduce pollution and our dependence on foreign sources of energy. High-speed trains draw power from the electrical grid, which is fueled primarily by domestically produced energy sources such as coal. Plus, trains require about one-third as much energy per passenger mile as automobiles and airplanes. Although nothing powered through the grid is entirely carbon-neutral, high-speed trains produce no direct emissions.

As for greenhouse gases, the carbon footprint of HSR is considerably lighter than that of planes and autos, with HSR producing half as much carbon-dioxide emission as airplanes and one-sixth as much as cars. According to the California High Speed Rail Authority, the proposed HSR system from San Francisco to San Diego would eliminate nearly 18 billion pounds of greenhouse-gas emissions and reduce the state's dependence on foreign oil by up to 22 million barrels per year. ³

Fourth, since the mid-1990s, there has been a strong increase in rail demand and service, primarily along short- to medium-distance inter-city routes and commuter lines. In eight of the last nine years, Amtrak has experienced increases in ridership, with the 2005 level of 25.4 million representing a 29 percent boost from 1996. These increases have been primarily driven by a few key routes where there is a strong inter-city passenger-rail presence, such as the Northeast Corridor, the Chicago-anchored Midwest network, and the Pacific Coast. ⁴

But Amtrak is only part of the story. From 1995 to 2005, usage of commuter rail (service between central business districts and commuter towns that, compared to rapid transit, is less frequent and covers longer distances) grew by more than 20 percent, from 352 million to 423 million passenger trips. This growth rate is comparable to that for automotive travel during this period.

Furthermore, roughly one-half of the 21 commuter railroads in North America did not exist 15 years ago. Traditionally, such systems were concentrated in large, densely populated Northeastern cities such as New York, Philadelphia, and Boston. Today, commuter railroads are located in metropolitan areas across the nation, including Miami, Los Angeles, Nashville, Charlotte, and Albuquerque, while new systems are in the advanced stages of planning and development in Detroit, Orlando, and Austin. ⁵

Three Ways to Pay For High-Speed Rail

Clearly, it's time for a national investment in rail where it makes sense -- namely, in densely populated corridors. It will not be easy to generate the necessary levels of funding in the current financial climate, but it can be done. Here's how, in three straightforward steps:

1. Build five high-speed rail corridors. Your administration should identify five priority corridors to be built out in the next 10 years. These corridors would be chosen based on a number of factors: distance; geography (the flatter the terrain, the faster the train); the availability of state, local, and private funding; and a high probability of use (densely populated corridors with significant levels of highway and airborne traffic).

Those states that are already committing to building HSR obviously would have some advantage in this process. For example, California is arguably the furthest along in its efforts to build a bullet train that connects most of its major cities. With the passage in November of almost $10 billion in bond authority for HSR, a north-south route through the state should be one of the five corridors. ⁶ A second obvious choice for high-speed rail funding would be the Northeast Corridor (Boston-New York-Philadelphia-Washington).

A third candidate would be the area currently covered by the Midwest Regional Rail Initiative (Minneapolis-Chicago-St. Louis-Detroit). Other possible options for the final two bullet-train corridors include Florida (Tampa-Orlando-Miami), Texas (San Antonio-Houston-Dallas), Pennsylvania (Pittsburgh-Philadelphia), and the Southwest (Los Angeles- Phoenix), where federal funds could be used to restart state efforts to build HSR.

These high-speed routes on dedicated passenger-rail tracks could be operated by a number of entities: Amtrak; regional government-sponsored corporations; state and local cooperatives; and, if feasible, private companies. The selection of operators would depend on affordability, the presence of committed investors, and other factors. Obviously, if state governments are contributing a significant portion of the funds for the project, they would have a major influence in determining who would operate it.

2. Establish a Rail Trust Fund and identify deficit-neutral sources of financing. What is needed most is a dedicated source of direct rail funding that is deficit-neutral. Without this, true HSR in the United States will continue to be nothing more than a dream.

Roads and airports have direct sources of financing, in the form of taxes, tolls, and other user fees. If passenger rail is going to succeed once again in the United States, it too needs its own direct source of funds.

That is why Congress should establish a Rail Trust Fund (RTF) that would finance the construction and maintenance of our national passenger-rail system, including HSR.

The RTF would receive its funding from a variety of sources:

• A ticket tax on all passenger-rail systems, including commuter-rail networks (but not rapid transit). A $5 per-ticket charge on Amtrak's passenger network could raise $175 million a year. A smaller charge on commuter systems (around $1 per ticket) could raise more than $400 million each year.



• In return for letting freight companies use the new and improved rail lines during off hours, those companies could, where feasible, be charged fees worth an additional $200 million per year.



• States would be required to match the federal contribution for any major rail investment at the same level as they do for highway and airport projects. States that offered greater matches could receive priority funding.



• Federal dollars to help support HSR (and traditional passenger rail) should also come from a mandatory national system to cap and trade emissions of carbon dioxide and other greenhouse gases. A portion of the proceeds generated from auctioning carbon-emission rights should be reserved for rail development. If those rights were to reach $25 a ton (akin to the expected prices on the 2008-2012 European trading market), the value of trading allowances would be approximately $100 billion annually, or just under 1 percent of U.S. GDP. ⁷

3. Target investment at demand by focusing on proven rail corridors. More than one-third of all U.S. passenger-rail traffic is where rail is currently available and most reliable: in the Northeast and along the inter-city corridors of California and the Midwest. The primary focus of our new rail system should be on developing these regional networks where rail transportation has a real chance of succeeding. Any other approach risks throwing away taxpayer dollars and contributing further to the mistaken belief that America "isn't ready" for large-scale passenger rail.

Amtrak may also continue supplementing these efforts with carefully identified long-haul passenger routes serving less-populated rural areas, which might be more affordably served by rail than by the current system of highly subsidized rural air routes. These rural rail extensions may be politically necessary to advance HSR in some states.

The infrastructure for passenger rail and HSR should receive the same level of federal support as highways and airports, which currently receive subsidies amounting to 80 percent of their overall cost. Furthermore, the next administration needs to develop a transportation policy that integrates our air and rail networks. In the past, airlines have seen rail as a potential competitor, and they have opposed federal subsidies for high-speed systems. This has resulted in an air-traffic system that is overwhelmed by short-haul flights.

With unstable fuel prices and an aviation grid that has reached its limits, the time is right to create a rail network that serves as a passenger feeder to our airports. For example, someone traveling from Peoria, Ill., to Paris would no longer fly a commercial prop plane to Chicago, but instead take a fast train that would stop at O'Hare for the international flight to France. To ensure the process is seamless, the rail network and the airlines could have code-sharing agreements and even combined fares; a single ticket would get you from central Illinois to the City of Light.

To create these new intermodal transportation hubs, some funds would be redirected from airport expansion to the construction of rail lines that link directly to air terminals. This last point is crucial. Direct rail connections to airports are far more useful -- and more popular -- than rail systems that force passengers to navigate a combination of trains and buses before ever reaching an airplane.

Conclusion: The Time is Right

Mr. President, if we choose to live in the past, America's transportation system will just keep creaking along. But if we take a regional approach, high-speed trains and traditional rail can serve an important transportation role in the 21st century. Such a breakthrough will not come cheap, and choosing five corridors to start the process will take political courage. However, the economic, environmental, and transportation benefits of high-speed rail are clearly worth the expense and the effort.

Endnotes

1. For estimates on job creation for specific high speed rail projects, see California High Speed Rail Authority and Midwest High Speed Rail Association.

2. Remarks by Secretary Henry M Paulson, Jr. before the National Association of Business Economists, March 3, 2008.

3. California High Speed Rail Authority,
www.cahighspeedrail.ca.gov/news/ENVIRONMENT_ Ir.pdf.

4. U.S. Department of Transportation, Bureau of Transportation Statistics, & "With Rail Leading, America's Transit Ridership Soars -- But After Years of Underfunding, Agencies Plunge Into Crisis," LightRailNow.org, August 2008.

5. "USA: Despite Critics and Federal Opposition, Light Rail Transit Chalks Up Major Successes in 2007," LightRailNow.org, December 2007.

6. Goble, Keith, "Voters in California OK high-speed rail, transit tax questions," Land Line Magazine, November 19, 2008.

7. Thanks to Jan Mazurek for this information.

Paul Weinstein Jr. is PPI's chief operating officer and Visiting Fellow at The Johns Hopkins University. He is a former senior White House policy advisor to President Clinton.