U.S. Taxpayers to Bailout Rail Project with $42 Billion
JANUARY 03, 2013
After getting slammed with higher taxes, Americans throughout the U.S. will be on the hook for the multi-billion-dollar infusion necessary to complete a grossly mismanaged high-speed rail system in California.
Even those who have never been to the state and have no association with it will contribute because federal lawmakers have essentially agreed to fund the project, which will end up costing a monstrous $68.4 billion to finish and hundreds of millions of dollars annually to operate and maintain. The high-speed rail system will run 520 miles from San Francisco to Los Angeles and is scheduled to be completed by 2028.
The idea is to create an efficient passenger rail system similar to those that for decades have operated in Europe and Asia. Congress passed legislation in 2008 to fund this experiment and other improvements to the nation’s train system. California already got the biggest chunk—$3.5 billion—of money under the law for its high-speed rail project. The cash is coming mostly from President Obama’s fraud-infested $787 billion stimulus that was supposed to jump start the economy and put Americans back to work.
Now the Golden State needs to come up with at least $57 billion, according to a federal audit that determines the project “faces many challenges.” Only $11.5 billion have been secured from a combo of local, private and state investments, which means Uncle Sam must come to the rescue. The problem is that “federal funding is uncertain,” according to the audit, which was conducted by the Government Accountability Office (GAO), the investigative arm of Congress.
It gets better; the probe also determined that the actual cost of completing the high-speed rail system will actually be even higher than the original estimate. That’s because it will likely fall behind schedule over things like legal challenges associated with environmental reviews and right-of-way acquisitions for construction. Additionally, ridership and revenue forecasts appear to be less than accurate, investigators found.
In short, this wasn’t thought out very well and like most government projects of this magnitude, the public will pay the hefty price for the bad decisions of inept officials. When all is said and done, more than 80% of the rail project’s total funding will come from government entities, the GAO says, and a large chunk will come from the feds. That means all Americans will on some level contribute to this disaster.
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