Politics

Why Pleas to Increase Infrastructure Funding Fall on Deaf Ears

Ken Orski — Sun, 05 Feb 2012 18:18:32 -0500

Letting the nation’s roads and bridges deteriorate may worsen traffic congestion and add to our commuting woes, but when water and sewer systems begin to fail our very civilization is at risk. That is the message of a recent story in The Washington Post drawing attention to the alarming state of the nation’s water and sewer infrastructure. The story looks at the Washington D.C. system as a poster child for neglected and dilapidated municipal utilities. The average age of the District water pipes is 77 years and a great many were laid in the 19th century, notes the Post article. Emergency crews rush from site to site to tackle an average of 450 breaks a year. ("Billions needed to upgrade America’s leaky water infrastructure," by Alfred Halsey III, January 2, 2012).

Antiquated municipal water and sewer systems are indeed a ticking bomb— all the more so since their deterioration, unlike that of highways and bridges— remains invisible until a break occurs. But maintaining water and sewer infrastructure in a state of good repair is a fairly straightforward challenge. Water supply and sewers are a public utility and as such they can cover their maintenance and replacement costs through user fees. So can many other public services such as electricity, natural gas, broadband and telecommunications. The ability to charge for service (and to raise rates as necessary) assures public utilities a steady and reliable stream of revenue with which to maintain, preserve and grow their assets.

Finding the resources to keep transportation infrastructure in good order is a more difficult challenge. Unlike traditional utilities, roads and bridges have no rate payers to fall back on. Politicians and the public seem to attach a low priority to fixing aging transportation infrastructure and this translates into a lack of support for raising fuel taxes or imposing tolls.

Investment in infrastructure did not even make the top ten list of public priorities in the latest Pew Research Center survey of domestic concerns. Calls by two congressionally mandated commissions to vastly increase transportation infrastructure spending have gone ignored. So have repeated pleas by advocacy groups such as Building America’s Future, the U.S. Chamber of Commerce and the University of Virginia’s Miller Center.

Nor has the need to increase federal spending on infrastructure come up in the numerous policy debates held by the Republican presidential candidates. Even President Obama seems to have lost his former fervor for this issue. In his last State-of-the-Union message he made only a perfunctory reference to "rebuilding roads and bridges." High-speed rail and an infrastructure bank, two of the President’s past favorites, were not even mentioned.

Why pleas to increase infrastructure funding fall on deaf ears

There are various theories why appeals to increase infrastructure spending do not resonate with the public. One widely held view is that people simply do not trust the federal government to spend their tax dollars wisely. As proof, evidence is cited that a great majority of state and local transportation ballot measures do get passed, because voters know precisely where their tax money is going. No doubt there is much truth to that. Indeed, thanks to local funding initiatives and the use of tolling, state transportation agencies are becoming increasingly more self-reliant and less dependent on federal funding

Another explanation, and one that I find highly plausible, has been offered by Charles Lane, editorial writer for the Washington Post. Wrote Lane in an October 31, 2011 Washington Post column, "How come my family and I traveled thousands of miles on both the east and west coast last summer without actually seeing any crumbling roads or airports? On the whole, the highways and byways were clean, safe and did not remind me of the Third World countries. ... Should I believe the pundits or my own eyes?" asked Lane ("The U.S. infrastructure argument that crumbles upon examination").

Along with Lane, I think the American public is skeptical about alarmist claims of "crumbling infrastructure" because they see no evidence of it around them. State DOTs and transit authorities take great pride in maintaining their systems in good condition and, by and large, they succeed in doing a good job of it. Potholes are rare, transit buses and trains seldom break down, and collapsing bridges, happily, are few and far between.

The oft-cited "D" that the American Society of Civil Engineers has given America’s infrastructure (along with an estimate of $2.2 trillion needed to fix it) is taken with a grain of salt, says Lane, since the engineers’ lobby has a vested interest in increasing infrastructure spending, which means more work for engineers. Suffering from the same credibility problem are the legions of road and transit builders, rail and road equipment manufacturers, construction firms, planners and consultants that try to make a case for more money.

This does not mean that the country does not need to invest more resources in preserving and expanding its highways and transit systems. The "infrastructure deficit" is real. It’s just that in making a case for higher spending, the transportation community must do a much better job of explaining why, how and where they propose to spend those funds. Usupported claims that the nation’s infrastructure is "falling apart" will not be taken seriously.

People want to know where their tax dollars are going and what exactly they’re getting for their money. Infrastructure advocates must learn from state and local ballot measures to justify and document the needs for federal dollars with more precision so that the public regains confidence that their money will be spent wisely and well.

"Jaw-Droppingly Shameless:" Mother Jones on California High Speed Rail Projection

Wendell Cox — Mon, 23 Jan 2012 10:57:42 -0500

Kevin Drum of Mother Jones reports on the highly questionable "cost of alternatives" that has been routinely repeated by proponents of the California high speed rail project, in an article entitled "California High Speed Rail Even More Ridiculous than Before."

The mantra goes something like, "yes high speed rail is expensive, but it would cost even more to not build it." Yes, indeed, it is expensive, starting at the low estimate of $98.5 billion the press and proponents usually cite to the nearly $118 billion that the California High Speed Rail Authority itself indicates. Advocates then cite a $171 billion figure as what Californian's would have to pay if they didn't build the line.

Joseph Vranich and I detailed the flaws in this "alternatives estimate" in a Wall Street Journal commentary on January 10 ("California's High Speed Rail Fibs"). We noted that the claim "sets a new low for planning projections in a field that has been rife with abuse." This was a reference to "strategic misrepresentation” ("lying") that has characterized rail project forecasts, according to top European academics.

Drum goes further, calling the claim "jaw-droppingly shameless," an appropriate characterization based upon the method and documentation. He goes on to suggest that "A high school sophomore who turned in work like this would get an F."

Regardless of the views that officials or the public may have on high speed rail, they are entitled to a standard of professional (and taxpayer financed) analysis above "jaw-droppingly shameless."

What Lies Ahead for Transportation in 2012?

Ken Orski — Mon, 02 Jan 2012 17:47:17 -0500

As befits this time of year, our thoughts turn to the events that await us in the days ahead. Putting aside the major imponderable — the outcome of the presidential and congressional elections that inevitably will impact the federal transportation program —what can the transportation community expect in 2012? Will Congress muster the will to enact a multi-year surface transportation reauthorization? Or will the legislation fall victim to election year paralysis? What other significant transportation-related developments lie ahead in the new year? Here are our speculations as we gaze into our somewhat clouded crystal ball.

Will Congress enact a multi-year transportation bill?

In 2011, the Senate Environment and Public Works (EPW) Committee passed a bipartisan two-year surface transportation bill (MAP-21) and the Senate Commerce Committee approved the measure’s safety, freight and research components. But at the end of the year, the bill’s titles dealing with public transportation, intercity passenger rail and financing were still tied up in their respective committees (Banking, Commerce and Finance). What’s more, the Senate bill ended up $12 billion short of meeting the $109 billion mark set by the EPW Committee as necessary to maintain the current level of funding plus inflation.

Finance Committee Chairman Max Baucus (D-MT) has yet to publicly identify the offsets needed to cover the final $12 billion of the bill’s cost. Repeated assurances by EPW committee chairman Sen. Barbara Boxer (D-CA) that the necessary "pay fors" have been found, has met with widespread skepticism. "I’ll believe it when I see it" has been a typical reaction among congressional watchers. With the Republicans opposed to using "gimmicks" (Sen. Orrin Hatch’s words) to come up with the needed money, it’s not entirely clear that the bill, as approved on the Senate floor, will contain the full $109 billion in funding.

On the House side, the fate of a multi-year bill remains equally clouded. In November, Speaker Boehner announced that he would soon unveil a combined transportation and energy bill, dubbed the "American Energy & Infrastructure Jobs Act" (HR 7). The bill would authorize expanded offshore gas and oil exploration and dedicate royalties from such exploration to "infrastructure repair and improvement" focused on roads and bridges.

However, questions have been raised about this approach. Critics, including Sen. Barbara Boxer and Sen. James Inhofe (R-OK) EPW committee's ranking member, judge the approach as problematical. They allege, along with many other critics, that the royalties the House is counting upon would fall billions of dollars short of filling the gap in the needed revenue (the gap is estimated at approximately $75-80 billion over five years). They further contend that the revenue stream from the royalties would not be available in time to fund the multi-year transportation program. What’s more, using oil royalties to pay for transportation would essentially destroy the principle of a trust fund supported by highway user fees. In sum, the House bill, if unveiled in its currently proposed form, will meet with a highly skeptical reception in the Senate.

Assuming that both reauthorization bills in some form will gain approval in February, will the two Houses be able to reconcile their widely different versions by March 31 when the current program extension is set to expire? Or will the negotiations bog down in an impasse reminiscent of the current payroll tax stalemate? Given the importance that both sides attach to enacting transportation legislation and given the desire of both sides to avoid the blame of causing an impasse, we think the odds are in favor of reaching an accommodation — probably more along the lines of the Senate two-year bill than the still vague and unfunded House five-year version. If this simply kicks the can down the road a couple of years, that may be OK with Senate Republicans. As one senior Senate Republican confidently told us, by the bill’s expiration date the Senate will be in Republican hands and "the true long-term bill will be ours to shape."

Will California lawmakers pull the plug on the high-speed train?

In 2011 Congress effectively put an end to the Administration’s high-speed rail initiative by denying any funds to the program for a second year in a row. Does the same fate await the embattled $98 billion California high-speed rail project at the hands of the state legislature in 2012?

At a December 15 congressional oversight hearing, witnesses cited a litany of reasons why the projects is a "disaster" (Rep. John Mica’s words). Among them: unrealistic assumptions concerning future funding; quixotic choice of location for the initial line section ("in a cow patch," as several lawmakers remarked); lack of evidence of any private investor interest in the project; eroding public support (nearly two-thirds of Californians would now oppose the project if given the chance, according to a recent poll); a "devastating" impact of the proposed line on local communities and farm land; unrealistic and out-of-date ridership forecasts; and lack of proper management oversight.

More recently, the project came under additional criticism. The job estimates claimed by the project’s advocates ("over one million good-paying jobs" according to House Minority Leader Nancy Pelosi) have been challenged— and acknowledged by project officials— as grossly inflated. Four local governments in the Central Valley, including the City of Bakersfield, have formally voted to oppose the project, fearing harmful effect on their communities. And agricultural interests are gearing up for a major legal battle, according to the Los Angeles Times.

But most unsettling for the project’s future is the inability of its sponsors to come up with the needed funding. To complete the "Initial Operating Segment" to San Jose (or the San Fernando Valley) would require an additional $24.7 billion. To finance this construction, the California Rail Authority’s business plan calls for $4.9 billion in Proposition 1A bonds and assumes $19.8 billion in federal contributions – $7.4 billion in federal grants and $12.4 billion in the so-called Qualified Tax Credit Bonds (QTCB). But the latter assumptions came in for sharp congressional criticism as so much wishful thinking, given the bipartisan congressional refusal to appropriate funds for high-speed rail two years in a row.

Further challenges await the project early in 2012. A group of 12 congressmen led by House Majority Whip Kevin McCarthy (R-CA) has formally requested the Government Accountability Office (GAO) to review the project’s viability and "questionable ridership and cost projections." Also expected early in January are a critique of the Authority’s business plan by the Independent Peer Review Group and a follow-up report by the State Auditor.

Meanwhile, the governor and state legislature, are being asked by the Rail Authority to approve a $2.7 billion bond issue authorized by Proposition 1A to fund and begin construction of the initial Central Valley section of the rail line from Fresno to Bakersfield. Will they be swayed by the findings of the three respected reviewing bodies and by the increasingly negative editorial and public opinion? Or will they continue to hold on to the seductive vision of bullet trains zooming from northern to southern California in two and a half hours — however distant and uncertain that vision may be? At this point, we believe the decision could go either way. However, sharply critical reports by the Peer Review Group and the General Accountability Office could tip the scale against funding the Central Valley project.

Will tolling join the gas tax as a mainstream source of highway revenue?

With the possibility of a near-term gas tax increase "less than zero," attention has turned to alternative means of raising transportation revenue. The most prominent option appears to be tolling— and 2012 may be the year when tolling becomes accepted as a mainstream source of highway revenue.

Recent toll increases on the nation’s highways attest to their growing use (if not popularity) as revenue enhancers. In New Jersey, tolls are set to rise by 53% on the New Jersey Turnpike and by 50% on the Garden State Parkway. The Port Authority of New York and New Jersey also has approved substantial toll increases on bridges linking the two states. These moves have provoked Sen. Frank Lautenberg (D-NJ) to sponsor a "commuter protection act" that would transfer toll setting powers to the U.S. Secretary of Transportation. But the Senator’s initiative does not appear to have obtained much support in Congress. IBTTA, the toll industry association, has lodged strong objections, arguing that federalizing toll rate setting would encroach on the states’ jurisdiction and interfere with their ability to use tolls as a tool of infrastructure financing, and Congress appears to be listening.

A recent Reason Foundation poll has found that people are more willing to pay tolls than increased fuel taxes (by a margin of 58 to 28 percent.) Moreover, the formation of a new "U.S. Tolling Coalition" suggests a growing interest in tolling on the part of the states. Under a pilot program that allows up to three Interstate highways to be reconstructed with tolls, Virginia will add tolls along the I-95 corridor and Missouri will toll its stretch of I-70. Arizona and North Carolina have applied for the remaining slot in the pilot program. Other states are embracing tolling to finance new capacity. Washington State, for example, has begun tolling the SR-520 floating bridge over Lake Washington to help pay for its replacement. Nor is the practice of tolling confined just to a few states. All told, 35 states already depend on toll revenue to some extent.

The Tolling Coalition wants to expand the pilot program and give the states the flexibility to toll any portions of their Interstate and other federal highways, "whether for new capacity, system preservation, or reconstruction." So far, neither the Senate nor the House have agreed to relax existing prohibitions, but they are prepared to retain the current pilot program.

However, the need to reconstruct and modernize the existing Interstates which are reaching the end of their 50-year design life, combined with the necessity to expand capacity of the Interstate highway system to meet the needs of an expanding population, may soften congressional opposition to relaxing the current Interstate tolling restrictions. With the gas tax no longer able to meet the nation’s transportation investment needs, and with the concept of a VMT (vehicle-miles travel) fee still a distant vision, the year 2012 could mark a turning point in the acceptance of tolling as a serious highway revenue enhancer.

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Note: the NewsBriefs can also be accessed at www.infrastructureUSA.org
A listing of all recent NewsBriefs can be found at www.innobriefs.com

The Troubled Future of the California High-Speed Rail Project

Ken Orski — Fri, 23 Dec 2011 10:43:20 -0500

A congressional oversight hearing, focused on the concerns surrounding the troubled California high-speed rail project, cast new doubts on the likelihood of the project’s political survival.

The December 15 hearing was the second of two hearings called by the House Transportation and Infrastructure Committee to examine the Administration’s "missteps" in handling the high-speed rail program. Before a largely skeptical groups of committee members — Reps Mica (R-FL), Shuster (R-PA), Denham (R-CA), Miller (R-CA), Napolitano (D-CA), and Harris (R-MD)— two panels of witnesses offered a mixture of support and criticism concerning the project’s impact, financial feasibility and prospects for the future. The first panel comprised six California congressmen — three testifying against the project (Reps. Nunes (R), McCarthy (R) and Rohrabacher (R)), three in support of it (Reps. Cardoza (D), Costa (D) and Sanchez (D).) The second panel consisted of FRA Administrator Joseph Szabo, California Rail Authority CEO, Roelof Van Ark, local elected officials and representatives of citizen groups.

A Brief Project Overview

The proposed high-speed line, from Sacramento and San Francisco to Los Angeles and San Diego, was originally estimated to cost $43 billion in 2008 when the state’s voters approved a $9.95 billion bond measure (Proposition 1A) to help finance the project. Since then, the total cost estimate for the project has more than doubled to $98.5 billion and the completion date has been pushed back by 13 years to 2033.

The "initial construction section" of 140 miles is proposed to be built in the sparsely populated Central Valley from south of Merced to north of Bakersfield. The $6 billion project is to be financed with a $3.3 billion federal contribution and $2.7 billion worth of state Proposition 1A bonds. Construction is to begin in 2012. However, to qualify as an "Initial Operating Segment" as required by the authorizing bond measure and capable of running high-speed trains, the line has to be extended by another 290 miles to San Jose (or 300 miles to the San Fernando Valley), at an additional cost of $24.7 billion.

To finance the latter construction, the California Rail Authority’s business plan calls for $4.9 billion in Proposition 1A bonds and assumes a $19.8 billion federal contribution – $7.4 billion in federal grants and $12.4 billion in the yet to be created Qualified Tax Credit Bonds (QTCB). The latter assumption came in for sharp committee criticism as wishful thinking. The bill authorizing QTCB (or TRIP) bonds, proposed by Sen. Wyden (D-OR), is not given much chance of passing in the House. Even if passed, it would only offer $1 billion for the California HSR project rather than $12.4 billion as claimed in the Authority’s business plan. Further federal high-speed rail grants are equally uncertain given the bipartisan congressional refusal to appropriate funds for high-speed rail two years in a row. In other words, the funding for the Initial Operating Segment hinges on highly questionable assumptions as to continuing federal aid.

Even more conjectural are the Authority’s funding assumptions for the subsequent phases of the project— a line extension from San Jose to the San Fernando Valley and a southern connection, to Los Angeles and Anaheim. That phase of construction according to the Authority’s business plan, would require a further federal contribution of $42.5 billion between 2021 and 2033 (plus $11 billion in private investment).

Left unstated in the Authority’s business plan, one informed observer speculated, is the secretly entertained hope that by 2015 (when the additional federal funding will be needed), the economic circumstances — and perhaps political circumstances as well — will have changed, allowing a resumption of generous federal support.

A "Boondoggle" or a "Compelling Opportunity for Our State"?

Witnesses testifying before the committee aligned along predictable fault lines. Critics of the rail project (mostly, but not all, Republicans) tended to focus on the specific weaknesses of the project: its unrealistic assumptions concerning future funding; the quixotic choice of location for the initial line section ("in a cow patch," as several lawmakers remarked); a lack of evidence of any private investor interest in the project; the eroding public support for the project (nearly two-thirds of Californians would now oppose the project if given the chance, according to a recent poll); the "devastating" impact of the proposed line on local communities and farmers; and the unrealistic and out-of-date ridership forecasts (with more passengers in 2030 predicted to board trains in Merced, a small farming community in Central Valley, than in New York’s Penn Station). Other witnesses asserted that the current project is vastly different from the one Californian voters approved in 2008; and that it is lacking proper management oversight (it is a project "of the consultants, by the consultants and for the consultants" one witness remarked).

Defenders of the project (mostly, but not all, Democrats) resorted largely to abstract arguments about the merits of building a high-speed rail system in California. They saw the project as a compelling long-term vision, as a travel alternative to congested highways and air lanes, as a way to reduce greenhouse gas emissions, and as a means of creating thousands of jobs. They argued about the difficulty and prohibitive costs of the alternative of building more highways and airports to accommodate future population growth.

Federal officials are fond of reminding us that construction of the interstate highway system also began "in a cow patch " — in that particular case, a wheat field in the middle of Kansas. But they ignore a fundamental difference between the two decisions: the interstate highway system was backed from the very start by a dedicated source of funds, thus ensuring that construction of the system would continue beyond the initial highway segment "in the middle of nowhere."

The California project has no such financial assurance. Should money for the rest of the system never materialize— as is likely to happen— the state will be stuck with a rail segment unconnected to major urban areas and unable to generate sufficient ridership to operate without a significant state subsidy. The Central Valley rail line would literally become a "Train to Nowhere" — a white elephant and a monument to wasteful government spending.

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Note: the NewsBriefs can also be accessed at www.infrastructureUSA.org

A listing of all recent NewsBriefs can be found at www.innobriefs.com

An Obituary for the Occupation in New York

Harry Siegel — Fri, 09 Dec 2011 16:49:06 -0500

I came to report on the occupation of Zuccotti Park expecting it would pass in a matter of days, like the stillborn movements before it.

In spite of its self-celebrated cosmopolitanism, New York after 9/11 has become an arid environment for protest under Mayor Michael Bloomberg and Police Commissioner Ray Kelly. The press and the public yawned through the massive anti–Iraq War march in 2003 and the excessive police response to the 2004 RNC protesters (the city is still dealing with those lawsuits). Even after the Wall Street meltdown, an eerie silence prevailed.

Zuccotti was something else: a physical presence, symbolically charged by its location a stone’s throw from both Ground Zero and Wall Street, with no end date to wait out and no demand to be placated.

While the act of occupation had little to do with the broader complaint—at the core, unhealthy economic distribution perpetuated by increasingly unresponsive elected “representatives”—it proved a dramatic setting for airing them, and for bringing participants together. For one season the park took on a life of its own, before reverting to a place for “passive recreation.”

In the course of that season, though, the scene aged badly. With a big push from the Bloomberg administration and tabloid coverage fixated on civic order, Zuccotti Park descended from a new public commons to a fever dream.

I surveyed the scene for the first time about a week after it started. In that first of what became many such visits, I stayed from early afternoon through the next morning, listening to professors, students, union members, veterans, homeless women, eccentrics, lunatics, librarians, old colleagues from other newspapers, members of various working groups and even a neighbor from Brooklyn there to take it in.

Occupy Wall Street had yet to draw the high-profile NYPD abuses and errors—the pepper spraying and Brooklyn Bridge arrests—that would give them a shape and purpose they couldn’t sustain themselves. But amid the drum circles and music festival “model society” absurdity of the park, people who’d been at a loss until now about how to express an array of concerns sensed an opening.

I was less interested in the protest itself than in the creation within Zuccotti of the sort of freewheeling commons New York City has lost under this mayor, even as the Internet and mobile devices eroded what was left of a shared café culture.

That shift is epitomized by the increasing commercialization of public spaces like the generator-powered gift market at Union Square. But it left a hole that the occupiers briefly filled.

The handmade cardboard signs, the conversations with engaging strangers, the library, even the General Assembly all seemed like flashes of the participant city that’s hunkered down to wait out an unpopular mayor. Bloomberg has built an ever-expanding safe space for the very well-off at the expense of the rest of us, using his private fortune to encourage New Yorkers to simply leave the city’s civic life in his hands.

Problems in Zucotti stemmed in no small part from the massively disproportionate police response, intended in part to limit the size and scope of the protests by warning the economically marginal, the physically frail, and the meek about the bad things that might happen to those who participated.

That tactic backfired. As the occupation grew, the would-be political participants found themselves starved for space, overwhelmed by their own tents and by an excess of hangers-on, panhandlers and carnival-goers unsober in all senses. They were ringed by barricades and police officers, blinded by spotlights aimed into the park at all hours, and eyed at all times by dozens of NYPD cameras carried by officers and atop a 20-foot pole on an unmarked police truck.

“Just because you’re paranoid,” one Occupier said, sweeping her arm across the park, “doesn’t mean they’re not out to get you.”

The NYPD response was a far more significant disruption to the life of the city than the protesters themselves—for the first time since 9/11 penning off streets to those without IDs to prove they “belonged” there, erecting barricades that starved businesses of customers, sending so many officers to “protect” the demonstrably nonviolent marches that crime rates went up elsewhere.

In turn, the occupiers became fixated on the police department. At each march, rumors would swirl about brutality, arrests and reports that “they’re taking the park.” Crowds would at times work themselves into mobs, facing off with the NYPD as though they were in Oakland or Egypt. Yet they failed to notice—let alone respond to—the tactics used to manage them, like complicated penning schemes that broke bigger groups into smaller ones or tricked protesters into separating themselves from the rest of the city instead of showing they were just like everyone else.

After I reported that the police were exacerbating a split between participants and nonparticipants in Zuccotti by encouraging drunks and rowdies to head down there, the NYPD’s main mouthpiece issued a tepid denial. “Not true,” he said, without specifying what exactly wasn’t true, adding that those types would of course find their way there.

Explaining his decision to finally clear the park, Bloomberg pointed to the EMT who broke his leg on the sidewalk just outside the park (but inside the barriers separating the police from the protesters) a week earlier, in the middle of the night.

I was the only reporter on the scene when that happened. My colleagues had dispersed around the park to track a spate of seemingly contagious violent incidents on an especially ugly night.

Two very large OWS “community watch” members were patiently working to calm down and eject from the park a crazed 20-year-old, Joshua Ehrenberg, who I was told had punched his girlfriend in the face earlier that night. Just outside the barriers separating the sidewalk from the street, officers watched the crowd swelling around the scene.

The police ignored requests to move on as Ehrenberg kept playing to them, spitting out slogans of the occupation: “The process is being disrespected” since “the community hasn’t consented to this,” trying to get friends to form a human chain with him. As ever, the gawkers accused each other of being infiltrators and police agents.

As that scene played out, two huge men in still another fight emerged behind us, inside the park, throwing ineffective haymakers at each other, nearly toppling tents. One of the OWS security members left to try to handle that, while his partner finally asked the police, watching from outside the barriers, to come in and remove Ehrenberg.

Despite the invitation, the crowd swarmed around the entering officers, yelling “Pig!” and the like as the police carried the struggling, still slogan-shouting would-be Occupier out by his arms and legs.

An EMT there to take him for a psychiatric evaluation, walking backward just ahead of the swollen group of police, protesters and park campers, put his foot through the rungs of a ladder that for some reason was leaning against the sidewalk.

As he wailed in agony, the crowd gave no space—even as the police calmly asked them to give him room, pushing those who wouldn’t listen back with measured force.

In press reports about the incident, a city spokesperson incorrectly claimed that the EMT was shoved or assaulted, while Occupation sources peddled the line that this was just one of those things, an unavoidable accident unrelated to the occupation.

Did he fall or was he pushed? Yes.

Would the Occupation movement—really, a moment—have collapsed under its own weight without the city’s heavy-handed help? Thanks to that help, we’ll never know.

This piece first appeared at City and State New York.

Blago’s Historic Sentencing: Organized Crime in Illinois

Steve Bartin — Wed, 07 Dec 2011 19:19:31 -0500

Former Illinois Governor Rod Blagojevich was sentenced today to 14 years in prison. Illinois will now have the dubious distinction of having two back-to-back Governors in jail at the same time. Could a more vigilant press have stopped the amazing political career of Rod Blagojevich? When you look into the background of the former Governor the tentacles of organized crime can’t be ignored.

Rod Blagojevich has been identified as a former associate of the Elmwood Park street crew of the Chicago Mob by Justice Department informant Robert Cooley. The allegations concern Blagojevich paying street tax to the Chicago Mob to operate a bookmaking operation. Former senior FBI agent James Wagner confirmed that Cooley told the FBI about Blagojevich in the 1980s. The Chicago Sun-Times and Chicago Tribune still haven’t reported on the Cooley allegations concerning Blagojevich. WLS-TV reporter Chuck Goudie has been most vocal in reporting on Blagojevich’s background.

Blagojevich was tried in room 2525 of the Dirkson Federal Building, the same room used for the massive Family Secrets Chicago Mob trial. It’s odd that Judge James Zagel was the federal judge in both cases. But, there’s more in common than the media has emphasized.

Blagojevich can’t help but be a little bitter. Former friend Eric Holder was supposed to help Blagojevich land a valuable casino in Rosemont, Il. Congressman Jesse Jackson Jr. is under an ethics cloud but is not going to be indicted for the Obama Senate seat deal. While Barack Obama claims to know nothing about Chicago corruption, as Joel Kotkin said recently: Illinois is a state of embarrassment.

The Precarious State of the Highway Trust Fund

Ken Orski — Wed, 23 Nov 2011 14:24:11 -0500

On November 18, President Obama signed into law a bundle of appropriation bills for FY 2012 including appropriations for the U.S. Department of Transportation. The measure had been passed earlier in the House by a vote of 298-121 and in the Senate by a vote of 70-30.

The bill provides $39.14 billion in obligation limitation for the highway program, a reduction of almost $2 billion from FY 2011; however, an additional $1.66 billion is appropriated for highway-related "emergency relief." The transit program is funded at $10.31 billion (incl. $1.95 for New Starts), a $400 million increase from FY 2011, and Amtrak at $1.42 (incl. $466 million for operating expenses). The discretionary TIGER program is retained at $500 million, a slight decrease from FY 2011.

Conspicuously absent in the new budget is any funding for high-speed rail and the Intercity Passenger Rail Service program --- a fact cheered by fiscal conservatives but mourned by boosters of high-speed rail and supporters of the California bullet train. The California High-Speed Rail Authority relies heavily on further federal funds to complete the project. According to its business plan, it expects $33-36 billion to come from the federal government. Failure by Congress to appropriate money for high-speed rail for a second year in a row makes the prospect of future federal support for the California rail project increasingly doubtful.

Also refused any funding in the FY 2012 congressional transportation appropriation are two other Administration priorities: the Livable Communities Initiative ($10 million requested in the President's budget); and the National Infrastructure Bank ($5 billion requested). The conference committee action would seem to put an effective end to any further attempts to create the Bank, at least during the remainder of this session of Congress.

Solvency of the Highway Trust Fund in Jeopardy
The congressional conferees have warned that the bill will deplete almost all resources from the Highway Trust Fund (HTF) by the end of fiscal year 2012. "Without enactment of a new surface transportation authorization bill with large amounts of additional revenues this year," the report said, "the Highway Trust Fund will be unable to support a highway program in fiscal year 2013. The conferees strongly urge the committees of jurisdiction to enact surface transportation legislation that provides substantial long-term funding to continue the federal-aid highways program."

As Taxpayers for Common Sense (TCS) pointed out in a commentary, the appropriations committee is willing to acknowledge the problem, but quickly passes the buck to the authorizers to come up with more cash for future years. But the authorizers aren't doing any better. The Senate Environment and Public Works (EPW) Committee passed a $109 billion reauthorization bill that would fund two years of transportation spending by essentially drawing the HTF balance down to zero (and still unable to identify the remaining $12 billion in offsets). To House Transportation and Infrastructure Committee Chairman John Mica (R-FL) the implications of the Senate action are clear. In a November 14 letter to Senate EPW Committee Chairman Barbara Boxer (D-CA) he warns that the Senate bill will "essentially bankrupt the Highway Trust Fund and make it impossible to provide any funding for fiscal year 2014."

To its credit, the Senate Environment and Public Works Committee recognized the precarious state of the Trust Fund and took steps to impose spending controls to prevent the Fund from falling into insolvency. The Senate bill provides (in section 4001) for mandatory reductions in the obligation limitation should the Trust Fund balances in the Highway Account, as estimated by the CBO, fall below a certain pre-determined level (for example, in the event gas tax revenues fail to match expectations). The designated triggers are $2 billion at the end of FY 2012 and $1 billion at the end of FY 2013. In other words, the Senate EPW committee has wisely provided for a mechanism to reduce highway expenditures below the authorized $109 billion level in order to prevent the Trust Fund from going bankrupt.

The House, for its part, is exploring a different way to fund a longer-term, five-year reauthorization. On November 17, Speaker Boehner announced he will unveil in December a combined transportation and energy bill, dubbed the "American Energy & Infrastructure Jobs Act," (HR 7). The bill would authorize expanded offshore gas and oil exploration and dedicate royalties from such exploration to "infrastructure repair and improvement" focused on roads and bridges.

However, many questions have been raised about this approach. Several lawmakers --- notably, Rep. Nick Rahall (D-WV), Ranking Member of the House Transportation and Infrastructure Committee, Sen Barbara Boxer (D-CA) chairman of of the Senate Environment and Public Works Committee and Sen. James Inhofe (R-OK) the committee's ranking member---have criticized the aproach as problematical and potentially miring the bill in controversy. They allege that the royalties the House is counting upon would fall billions of dollars short of filling the gap in needed revenue (the gap is estimated at approximately $75-80 billion over five years). They further allege that the revenue stream from the royalties would not be available in time to fund the measure.

Other critics have pointed out that states in whose jurisdiction drilling may occur, will assert a claim to a lion portion of the royalties. Also, using oil royalties to pay for transportation would essentially destroy the principle of a trust fund supported by highway user fees. For all the above reasons, the House proposal is likely to meet with a skeptical reception in the Senate.

As the TCS memorandum aptly concluded, in the end it's a big game of "kick the can." The appropriators kick the can to the authorizers. The authorizers kick the can down the road a couple of years or rely on speculative and uncertain revenue that may or may not materialize. In the meantime, the fate of the Trust Fund continues to hang in a precarious balance, victim of Congressional indecision and new fiscal imperatives.

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Note: the NewsBriefs can also be accessed at www.infrastructureUSA.org

A listing of all recent NewsBriefs can be found at www.innobriefs.com

All in the Family, 2011

Lou Siegel — Mon, 24 Oct 2011 15:00:45 -0400

We overheard this phone conversation recently between tea party activist Bill Francis and his 19-year-old daughter and Wall Street occupier Serena:

Bill: I understand why you’re protesting but I think you’re missing the point.

Serena: What’s that?

Bill: You’re mad at rich people and upset that you can’t get a job.

Serena: True.

Bill: And you think that by camping out on the street you’ll get attention?

Serena: We’ve already made a difference.

Bill: Tell me how?

Serena: The media is talking about our issues.

Bill: They’re just using you.

Serena: So what.

Bill: Liberals like the idea of class warfare.

Serena: You used the media.

Bill: We knew what we were doing.

Serena: You were rude.

Bill: We made our point.

Serena: You called Obama a socialist.

Bill: He is.

Serena: What do you mean by that?

Bill: He wants the government to run our lives.

Serena: Who do you think is running your life now?

Bill: That’s the point. We want to control our own lives. That’s what being an American means.

Serena: I think the corporations are in charge and you don’t even realize it.

Bill: Listen, honey, I can ignore the corporations – I don’t have to buy what they sell. I can work for anyone I choose.

Serena: You’re not facing facts. Corporations and banks are telling politicians what to do. And they’re moving jobs to other countries.

Bill: That’s because of taxes.

Serena: What’s because of taxes?

Bill: Jobs leaving the country.

Serena: Dad, they barely pay any taxes.

Bill: The point is that they’re free to do business wherever they want.

Serena: You don’t want to see how much power they have over us.

Bill: I agree there’s corruption.

Serena: And greed.

Bill: That’s human nature.

Serena: Now you’re going to tell me that corporations are people.

Bill: I just don’t like that you’re sleeping in a tent every night, that’s all.

Serena: Don’t worry Dad, I’m safe. You taught me to take care of myself.

Bill: I still don’t understand what you’re trying to accomplish.

Serena: We’ll figure it out as we go.

Bill: But, anyway, as long as you’re coming home to take showers and wash your clothes, I suppose it’s o.k.

Serena: Got to go. Love you dad.

Bill: Love you too honey.

This first appeared at LaborLou.com.

Manhattan Moment: Two distinct groups make up 'Occupy' protesters

Fred Siegel — Fri, 14 Oct 2011 12:14:36 -0400

Strange to say, but there may be something valuable going on among some of the Occupy Wall Street protesters.

Until now, two narratives have defined both the press coverage and public discussion of the Occupy Wall Street demonstrators camped out in lower Manhattan's Zuccotti Park.

The first depicts a collection of buffoonish, semiliterate juveniles engaged in a seeming left-wing version of a college prank. There is, to be sure, something to this story.

In last week's Zombie Parade the protesters, giddy with their cleverness, portrayed themselves as the living dead whose lives had been sucked from them by unnamed corporations.

One of the pre-Halloween costumers was asked why she had chosen to dress up like a zombie who looked like Marie Antoinette, the French queen guillotined by the revolutionaries of 1793. She replied that she had no idea of who Marie Antoinette was but just liked the look of the costume.

The second narrative sees the protesters as ripe to be harnessed by the labor leaders who hope to tap into their energy on behalf of the Obama 2012 campaign.

Watching New York Federation of Teachers President Mike Mulgrew prance about, speaking in the name of the protest, you might think Occupy Wall Street had signed on to a campaign to raise teachers' salaries in a city whose budget shortfalls are already producing layoffs.

But both of these explanations presume that there is a single, largely unified group of people in Zuccotti Park. There isn't. The exhibitionists, lost souls and zanies acting out tend to congregate in the Western stretch of the block-long park.

To their east, where anti-Obama placards outnumber those supporting the president, a more cerebral group of protesters is gathered. Their organizational skills have kept the encampment running in reasonably good order for these past three weeks.

Some of them, carrying anti-Obama placards, are standard issue leftists who, like the New York Times editorial board, think that the president's problem is that he has been too moderate and thoughtful.

But others are caught up in the practical details of self-government on a small scale. They are doing their best not to be co-opted, which is why, despite the hoopla from labor leaders, they haven't signed on to the union campaign. Like Students for a Democratic Society in the early 1960s, they are grappling with a paradox.

On the one hand, they insist that corporations ineffectively run the government; on the other, they want more government regulation to control the corporations.

By contrast, the Tea Party has a ready and plausible answer as to how to restore self-government and break the grip of the crony capitalism that ties the Obama administration to Wall Street. They want to drastically reduce the size of government.

The protesters have no such view. Like their 1960s predecessors, they're chasing their tails trying to imagine procedural reforms that will allow the demonstrators to govern themselves, while also curbing the power of those greedy capitalists.

It's too easy to dismiss the protesters, with their "Eat The Rich" signs, as just spoiled "trustafarian" misfits. They see themselves as the American equivalents of Egypt's Tahrir Square protesters who brought down President Hosni Mubarak, but they haven't noticed that it's the Islamists who are inheriting the Arab Spring.

Mocking them is easy; but here at home, the problem of crony capitalism is in fact eating away at our civic entrails. Leftists willing to grapple with this malignancy should be welcomed, if only for the potential seriousness of their efforts.

As the more thoughtful 68ers eventually discovered, the idea of reforming government by expanding it is a circular dead end.

This piece originally appeared at The Washington Examiner.

Fred Siegel is a senior fellow at the Manhattan Institute and scholar in residence at St Francis College in Brooklyn.

The Chicago Machine’s Favorite After School Charity

Steve Bartin — Tue, 11 Oct 2011 15:17:47 -0400

One of the great scams of modern political life is the charitable contributions of tax-exempt foundations associated with politicians. A perfect illustration is one charity associated with former Chicago Mayor Daley which has received some attention.

The charity, After School Matters, set up by Maggie Daley (former Chicago Mayor Daley’s wife and sister-in-law of White House Chief of Staff William Daley) has received more than $54 million from the financially troubled city. The Chicago Tribune explains that

“days before Emanuel took office, the Daley administration awarded the nonprofit a one-year, nearly $6.5 million contract to oversee summer jobs efforts and after-school programs.

The group is housed in city offices near the Cultural Center, where it pays no rent and uses city computers and phones."

The Tribune article provides some rather unusual facts. Three full time city of Chicago workers labor full time for the private charity. It also benefits from corporate contributions, as The Chicago Sun-Times’ ace investigative reporter Tim Novak explains:

"After School Matters - founded and run by Maggie Daley - raised more money in a single year than 97 percent of the 12,757 charities in Illinois filing reports with the IRS"

How this corporate support “materialized” is now coming into question. Long time Chicago media critic Steve Rhodes points out that this appears to be a shakedown racket of those who do business with the city of Chicago.

In 2008, After School Matters became prominent news because of its donor list. Prominent corporations like J.P Morgan Chase and Motorola gave significant contributions to Daley’s charity, and all received City of Chicago contracts.

This isn’t just a story about a local charity with conflicts of interest. Federal taxpayers are giving federal stimulus dollars to the Daley charity. Even Mayor Rahm Emanuel, the Chicago Sun-Times reports, admits “the city should not be dictating which charities recipients of city subsidies should donate to.”

Former Mayor Daley is upset that anyone would think that his wife’s charity isn’t fully dedicated to helping children. The Chicago Sun-Times reports:

Former Mayor Richard M. Daley on Monday denounced as “disgraceful” and a “personal insult to my wife” an internal audit concluding that recipients of city subsidies were told to donate to Maggie Daley’s After School Matters program.

The former mayor insisted that no arms were ever twisted to produce donations to the charity that his wife founded to occupy and educate Chicago teenagers.

Daley’s response is textbook Chicago media spin. When confronted with facts, claim outrage and avoid the specifics.