Why Worry About Rail? Let's Count The Ways...

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THE VINE JANUARY 26, 2009

Why Worry About Rail? Let's Count The Ways...

In a column over at Grist on the paucity of transit funding in the stimulus package, Ryan Avent makes a crucial point. Over the past three months, during the economic slump, real wages have actually gone up 23 percent—in part because gas prices have nosedived. (By some estimates, the collapse in gas prices since the summer have provided a nearly $300 billion stimulus to the economy.) But at some point the global economy will recover and get jogging again, at which point oil demand will pick up, and gas prices will skyrocket. Not only will the uptick at the pump start whittling away at household budgets, but the rise in oil prices will act like a stealth tax increase, putting a major crimp in the recovery.

So one solution, then, is to use some of the stimulus spending to improve the energy-intensity of the economy—to make it so that the United States uses less oil (and gas, and coal) per dollar of GDP, and hence, are less vulnerable to the inevitable rise in fossil-fuel prices down the road. That's a relatively straightforward concept. As Avent suggests, we need to "cut commuting times, reduce driving, reduce congestion, green intercity travel and green freight shipping (so that rising oil prices don't feed through to prices for other goods, including food)." That's why it's unwise for Congress to dole out tens of billions of dollars for new roads out to the exurbs—they'll make the rise of oil prices accompanying any future recovery that much harder to weather.

By the way, while high-speed passenger rail gets a disproportionate share of the attention, Avent's right in that there are huge gains to be had by converting much of our freight shipping to rail. As Phillip Longman recently explained in a superb Washington Monthly piece on this subject, an investment of $250 billion to $500 billion over the next 20 years could get 85 percent of the nation's long-haul trucks off the road, save on road-infrastructure costs, and reduce the nation's oil consumption by 22 percent (our economy would also be 13 percent larger in 2030 than it otherwise would be). Shifting goods transport to rail clearly can't all be done in a stimulus package, but if we're thinking about how to get ourselves off the oil-price rollercoaster, that's one place to look.

Fortunately, some members of Congress are thinking along these lines. In the House, Peter DeFazio is trying to augment aid for transit-operating costs in the stimulus bill, though his amendment is currently in limbo in the Rules Committee. (By the way, I'm not sure DeFazio's correct to blame Larry Summers for the relatively short shrift rail got in the stimulus bill; I believe that decision was largely influenced by OMB officials, who were concerned that there weren't enough "shovel-ready" projects.) Relatedly, Matt Yglesias notes that a new pro-rail coalition, OneRail, is coalescing on the Hill, helping to ensure that the issue doesn't atrophy once the stimulus mania has passed.

Update: DeFazio's amendment just got pinged down. That leaves Jerrold Nadler's proposal to add $3 billion for new transit capital projects to the stimulus bill.

--Bradford Plumer

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