There’s Only One Thing Wrong with the Rail-to-Dulles Project: It’s Aliiiiiive!

Supporters of the Rail-to-Dulles Metro project are in ecstasy over the apparent reversal by U.S. Secretary of Transportation Mary Peters over federal funding for the first leg of the project. Judging from the Washington Post, however, the switch looks more like a triumph of political pressure rather than a dispassionate re-evaluation of the facts.

Grassroots pressure was intense. As the Post reports, members of the Dulles Regional Chamber of Commerce deluged state and federal officials with thousands of faxes and emails daily. There can be little doubt either that members of Virginia’s congressional delegation twisted arms. As Sen. Jim Webb states in a press release: “I intend to continue to work closely with my colleagues in Congress and in Virginia government … toward a successful outcome for the Dulles rail extension project.” (My italics.) U.S. Representatives Tom Davis and Frank Wolf have been hectoring the Bush administration as well.

I have no idea if Ed Risse is right in his surmise that the Bushies backtracked to provide political cover for Wolf, whose congressional district is trending Democratic, while leaving themselves an out so they can kill the project later. But it’s a reasonable hypothesis.

Our blogger friend Too Many Taxes has provided a copy of the letter that Peters sent to Gov. Timothy M. Kaine, which provides some insight into what’s going on. Without question the feds have left themselves two gigantic loopholes should they choose to spike the project at a later date.

On the positive side, Peters wrote:

As a result of the collaboration between Federal and State officials, the project sponsor and other stakeholders, the financial stability and oversight of the Project has improved. Cost reductions have been verified, and mechanisms have been established to enhance inter-organizational cooperation, technical capacity and project management.

But the transportation secretary pointed to two issues that still could derail the project. One of those concerns — belabored on this blog, I might add — is the financial condition of the Metropolitan Washington Area Transit Authority, which would operate the rail service. Writes Peters: “I want to re-emphasize the importance of the upkeep and maintenance of the existing system. WMATA recently identified $489 million in urgent unfunded capital needs over the next 6 years over and above its current capital funding plan.” Here’s the poison pill:

I am asking your office, WMATA and members of the WMATA jurisdictions to commit to undertake the required steps to guarantee the significant capital rehabilitation necessary for the overall system to enter into and maintain a good state of repair. These steps should include … identifying and committing funds for the first year of those needs.

Think about that: Washington area jurisdictions have fallen $489 million behind in capital funding for the Metro system. It would be a political miracle if they simply stopped falling farther behind. Under current fiscal circumstances — the state tapped out much of its borrowing capacity when it approved the latest round of higher-education bonds — actually making up the difference would be a herculean achievement.

Peters’ other concern was the risk that, during a period of increasing inflation in the construction sector, the project could experience massive cost overruns. “We believe that the Project still represents substantial risk to the taxpayers,” she wrote the governor, “and we urge you to continue efforts to reduce exposure and transfer risk from the public to the private sector.”

Again, Peters was expressing a legitimate concern. But how is the Kaine administration supposed to mitigate risks at this advanced stage of the project? Reopen contract negotiations with the construction contractors, Bechtel and the Washington Group? Given ongoing construction inflation — an Associated General Contractors of America report notes that price increases are greatest in the “highway and street” and “heavy” construction categories — Bechtel/Washington Group is less likely to respond with concessions than with demands to raise the price of its bid or to shift risks back to the state! Peters has put the Kaniacs between a rock and a hard place indeed.

On the other hand, the feds signaled these concerns a long time ago, and the Chamber boosters, Virginia’s congressional delegation and the Kaine administration have bulled ahead despite the warning signs. I’ll leave the last word with state Sen. Ken Cuccinelli, R-Fairfax, who wins my vote for best quote of the day: “It’s the greatest tragedy for taxpayers in a long time. It’s going to suck down every available transportation dollar that comes within its gravitational pull.”

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  1. Anonymous Avatar

    I’ve talked to several Fairfax County supervisors or their staffs. In a candid moment, they are very fearful that costs for building Dulles Rail will hit the county budget, either directly or through bonding. That could well be a disaster for county services, real estate taxes and the county’s AAA credit rating.

    Pretty serious risk for a rail line that, by the Commonwealth’s own EIS, will not improve traffic.

    Shame on Jim Webb. Instead of fighting for Virginians, he (and many others) are fighting for Bechtel and the Tysons Corner landowners. Warner (both of them), Wolf, Davis and Moran should all be ashamed as well.


  2. Larry Gross Avatar
    Larry Gross

    If Bush and Peters and company are going to hand over the reins in a few months… isn’t this sort of kicking the can down the road?

    and say what you want about Kaine and others but what they did not do was hide out in RoVa Richmond.

    At least give him credit for pursuing A direction.. right wrong or indifferent…

    and you know what.. you have a real live NoVa campaign issue between Gilmore and Warner.

    Oh.. my.. what will Gilmore’s “stand” be? Will he take a position at all? and if he does .. will he stand on his Conservative principles and align himself with those who say that using the Federal gas tax for Transit is wrong?

    or will he… be Warner-lite when it comes to METRO in NoVa?

    Bonus Question:

    What IF…. Kaine convinces the GA to “allow” NoVa citizens to vote on a 1% sales tax dedicated solely to METRO?

    a. – good idea – bad idea?
    b. – would it pass a NoVa referenda?

    extra special “Groveton special” question:

    a. how many NoVa folks like RoVa deciding what NoVa is “allowed” to do?

  3. Groveton Avatar

    Bush & Peters & Co. – EMR’s theory sounds right – get Wolf re-elected. They’ll be long gone before this is finally decided. Meanwhile, Wolf will get re-elected.

    Kaine has done something. Good for him. I have never accepted the idea that transit is a bad idea. Every city in the world builds a mass transit system. I guess they are all getting “conned” by landowners. From formerly Communist Moscow to hyper Capitalist Tokyo. It’s a shame that the bloggers on this site don’t run the world. If they did – all these stupid, wasteful transit systems would be gone. Meanwhile, the only two meaningful land use changes in NoVA (that I see) are Arlington (along Metro) and Reston. One is transit oriented development. The other is a planned community that basically works. If Fairfax County was largely undeveloped (as the Reston area was when planned) then I could see a way forward through planning. However, Fairfax County today looks a lot more like Arlington 30 years ago. Mass transit changes land use patterns – even when the land in question is already developed. I’ll finish this thought by noting that the proponents of land use changes who oppose mass transit seem to have no viable alternative. Quacking on and on about wanting zoning changes on already developed land is quixotic at best.

    Gilmore and Warner will both support Rail to Dulles. Support wins far more votes in NoVA than it loses elsewhere. If intellectual honesty counted for anything in politics Frank Wolf would never have supported $15M for the Journey Through Hallowed Ground. However, when confronted with a choice between fiscal conservatism and pandering to rich people Wolf made the decision politicians always make.

    Re: question – a. Yes, it is a good idea to “allow” the referendum. What kind of psychotic control freak would think that people should not be able to vote a tax increase on themselves for something they want? Oh yeah, the 140 psychotic control freaks in the General Assembly. b. Yes, it would pass. However, it would be close. A lot would depend on exactly how you define NoVA.

    “Groveton special” –

    a. 0. Pretty ridiculous to have to ask “teacher” for permission to vote on whether to raise taxes on youself for something you want. It would be bad enough if the state government were competent. Given the circus clown show it really is – this is a total travesty.

  4. Anonymous Avatar

    Groveton, I must disagree that Fairfax County looks like Arlington 30 years ago. Arlington has always had a basic grid pattern for streets. Fairfax generally does not. The lack of grid streets will go a long way to defeat efforts to turn Fairfax into a transit-friendly area.

    Reston Town Center, which started with open land, could lay out streets in a grid pattern. No one could afford to do so in Tysons and still build the other necessary infrastructure.

    Planning for Tysons Corner is a charade. Running rail through Tysons, as opposed to by Tysons, is a farce that will suck up massive amounts of tax dollars and produce nothing for the public.

    Virginia government is clearly as corrupt as that found in Illinois, Louisiana or New Jersey. We just like to kid ourselves that it is not.


  5. Groveton Avatar


    I lived in Arlington from 1981 – 1985. While that wasn’t quite 30 years ago, it is close.

    You are right about the grid streets. They are laid out in a grid. Even the names of the streets with names (vs. numbers) generally went in alphabetical order. I always assumed it was the handiwork of Pierre Charles L’Enfant from the time that Arlington was part of DC.

    However, even with its grids, Arlington was a mess. Wilson Blvd – from Glebe Rd into Rosslyn – was a series of run down store fronts and bad strip malls. I used to walk down Wilson Blve to get to the Ballston Metro. Everything was fine until you got to Glebe – then a mess. I always wondered why the Metro didn’t change things more. Then I noticed the run down Hect’s was closing at Ballston. Twenty years later the place was renewed. High end condos, office buildings, well designed shopping malls… What caused all this? Why isn’t Rt 50 looking as good as Wilson Blvd? It was the Metro. It had to be. Nothing else changed.

    So, would a metro down the Toll Rd change the complexion of that corridor? Would it move from what it is today – generally a low density bunch of houses – to a new Wilson Blvd? Could the Reston Town Center become the Tyson’s Corner that Tyson’s Corner should have become?

    I don’t think anybody knows the answers to these questions. However, the value of mass transit is a lot more than the sum of the fares collected. Should it enrich a small number of landowners? No. Is it properly organized right now? No. Should anything be awarded as a sole source bid? No. However, even with all that, declaring Rail To Dulles useless is pretty premature. If you doubt me, take a walk along Wilson Blvd. from Glebe Rd to Rossyln. 30 years ago you could have taken that walk. I would have advised that you bring a pistol. Today, bring your credit card. Leave your pistol at home.

  6. Anonymous Avatar

    Groveton — I’m not against mass transit. I’ve taken Metrorail to D.C. at least 95% of time since I moved here in 1984. Few Silver Line supporters can say that.

    The big problems with Dulles Rail are: 1) it does NOT reduce traffic congestion; 2) it is very expensive today, $5 B plus; it will only get more expensive before it is completed; 3) Fairfax County taxpayers and DTR drivers will eat most of those costs without getting any tangible benefit; 4) the Tysons Corner landowners will reap windfalls on the backs of everyone else; 5) virtually every elected official has sold his/her soul to the developers and Bechtel. We are spending scare transportation dollars on a farce.

    How does the average small busines owner, real estate owners outside Tysons Corner, or the average citizen of Fairfax County benefit under these circumstances? No will or even can answer this question.


  7. Groveton Avatar


    1) Agree
    2) Agree
    3) Agree
    4) Agree but must be fixed.
    5) Agree

    In Arlington, every business along Wilson Blvd benefited from Metro. Every homeowner along that road gained. It reduced the scatterized development that everyone carps about. It allowed Arlington to increase population with more or less the same level of traffic congestion along Wilson Blvd. It attracted a younger group of residents which could be called “the creative class”. It transformed Ballston from a dump into a pretty cool place.

    Will Rail To Dulles have the same transformative effect over 30 years? I think so.

    Is RTD worth the money? I don’t know.

    Do the lovers of of more functional human settlement have a better plan? Not at all.

  8. Larry Gross Avatar
    Larry Gross

    1. is there something unique about this particular transit project that makes it different/less effective at reducing congestion?

    In other words.. will it do what other transit does? If it does not – why not. If it does.. are we using a different standard? and if so ..why?

    2. – again.. expensive compared to what?

    3. – If a majority of NoVa/Fairfax citizens are willing to pay a 1% sales tax for Metro… then what?

    4. – yes.. the same game played with new highways.. right? Why have we been content to let it happen with highways but not with rail?

    Fix it – yes. And while we’re at it – let’s fix it for ALL new developer sucking infrastructure arrangements.

    5. – ditto 4 – we’re apparently content to allow highways to benefit developers but not transit.

    Why not have a consistent standard?

    re: limited funding of this project

    1. – where is the money coming from?

    2. – what would that money be spent on if not this project?

    3. – What is the 900 million was to come from Va and RoVa instead of the Federal Gas tax?

    This project is said to be “not viable” without that 900 million.

    Why should Fairfax/NoVa get to tax others outside of Fairfax/NoVa to pay for it’s transportation needs?

    Mary Peters is right. The Fed Gas tax has turned into a slush fund .. ripe for political influence for projects (both road and rail) that benefit developers…

    Get rid of the Federal Gas Tax and let places like Washington decide if they are willing to tax themselves to pay for things like Metro and in the process, there will be pressure to make sure that developers have to pay their fair share of the costs.

    If you think about this – the 900 million .. is essentially a developer subsidy…

  9. Groveton Avatar

    “Get rid of the Federal Gas Tax and let places like Washington decide if they are willing to tax themselves to pay for things like Metro and in the process, there will be pressure to make sure that developers have to pay their fair share of the costs.”.


    And let’s get rid of all agricultural subsidies as well. Let people decide if they can afford to live on farms without the government paying them not to grow things.

    There are a lot of subsidies and removing them will leave a lot of people economically displaced. However, that ignores the biggest subsidy of all …

    The subsidy that Americans yet unborn are paying to our generation as we spend beyond our means – individually and as a society. And the accomplices in this inter-generational grand larceny are the grotesque disfigured twins of deficit spending and vast hidden subsidies.

    No single subsidy is the whole problem and the elimination of any single subsidy will not a complete answer. Instead, all subsidies need to be exposed and rectified. From argiculture to transportation, from education to insurance risk. Anything less would be a slap in the face to the unbroken line of heroes stretching from George Washington to Michael Monsoor. Their selfless sacrifice cannot be allowed to wither under the selfish sanctimony of a generation obsessed with enrichment through the labor of others.

    Eliminating all major subsidies and adopting a “pay as you go” approach is, quite literally, the least we can do.

  10. Anonymous Avatar

    Groveton’s got it wrong on the farm deal.

    The vast majority of farms not only get no subsidies, but they pay more than twice in taxes what they get in services. It is the farms that are subsidising their neighboring suburbs and towns. I’m sure they would be glad to get rid of those “subsidies”.

    The vast majority of land where farmers get paid not to produce is land in the conservation reserve program. This is usually riparian land along the strambeds. The government has dedcided it is worth more to pay to protect this land than it is to have it farmed. for the farmers, this is prime bottom land that they would love to use, if not paid not to.

    The majority of subsidies do NOT pay farmers not to produce, instead they pay a price premium or place a floor price under what IS produced. Despite the money paid, this has the result in more goods being produced than farmers could afford to do otherwise, and results in LOWER prices at the store.

    And, let’s not get confused about who are the farmers, and who owns the farms.


  11. Anonymous Avatar

    “the value of mass transit is a lot more than the sum of the fares collected.”

    “I have never accepted the idea that transit is a bad idea. Every city in the world builds a mass transit system. I guess they are all getting “conned” by landowners.”

    “Is it properly organized right now? No.”

    “Is RTD worth the money? I don’t know.”

    Despite my usual commoents about mass transit, I actually favor mass transit, but i think each porject needs to be very carefully conisdered, rather than just starting with the assumption that mass transit is always good.

    Before we spend that kind of money we ought to understand that it is a slam dunk among projects that might ought to be done. Right now, we still don’t know if THIS project is worth the money.

    Maybe it would be better organized and worth more if we spent the same money in rail to Georgetown and Baileys/Annandale.

    We have no way of figuring that kind of thing out because we are continually overtaken by the events of politics and special interests.

    My gut feeling is that it would be better to spend Metro money primarily inside the beltway until everyone is within walking distance of a station. Outside the Beltway, we should concentrate on expanding the “spokes” for use as commuter rail, and hubs for auto acess to Metro.

    We should avoid any attempt to create another Ballston out of Tysons, or anything like that.

    After we finish inside the beltway, then we can begin infll between the “spokes”.

    But most of all, we need to fully understand who benefits and how, so that we can properly assess the charges.

    I just can’t believe there aren;t more cost effective, and more egalitarian, moves that could be made than rail to Tysons.


  12. Groveton Avatar

    I don’t buy it RH. And neither does anyone else. Just a sampler:

    The U.S. Agricultural Department is required by law (various U.S. farm bills which are passed every few years) to subsidize over two dozen commodities. Between 1996 and 2002, an average of $16 billion/year was paid by programs authorized by various U.S. farm bills dating back to the Agricultural Adjustment Act of 1933, the Agricultural Act of 1949, and the Commodity Credit Corporation (created in 1933), among others.[citation needed]

    The beneficiaries of the subsidies have changed as agriculture in the United States has changed. In the 1930s, about 25% of the country’s population resided on the nation’s 6,000,000 small farms. By 1997, 157,000 large farms accounted for 72% of farm sales, with only 2% of the U.S. population residing on farms.

    The subsidy programs give farmers extra money for their crops, as well as guarantee a price floor. For instance in the 2002 Farm Bill, for every bushel of wheat sold farmers were paid an extra 52 cents and guaranteed a price of 3.86 from 2002–03 and 3.92 from 2004–2007.[1] That is, if the price of wheat in 2002 was 3.80 farmers would get an extra 58 cents per bushel (52 cents plus the $0.06 price difference).

    Is everything everybody writes about this just BS?

    Whether most farms get subsidies or not is a mystery to me. Whether there are multi-billion dollar farm subsidies each year in the US is not a mystery.

    As I have pointed out – I am subsidized by nobody. There is no chance that I am receiving more in government benefit than I am paying in taxes. However, what is true for me may not be true for Fairfax County as a whole. Farming in the US is overtly subsidized.

  13. Anonymous Avatar

    I’d say there was a double standard.

    How many times have you seen a justification for transit that included the value of all the development it will cause?


  14. Anonymous Avatar

    Re- Grid streets.

    Once you go west and south of Arlington you see that the grid pattern is broken up by geographic feaatures. Barcroft park (along a streambed) and Barcroft lake, Pinecrest Golf course, etc etc.

    Vienna is also broken up into enclaves of dead ends caused by streambeds.

    Within these enclaves however the treets do have a grid pattern, frequently, but not always.

    As you move farther west, out towards GMU where there are newer subdivisions you find more deliberate cul de sacs.

    Then farther west you start seeing subdivisions tha were designed to meet (or beat) newer land use regulations concerning riparian buffers, drainage, open space, etc. The more obstacles you hand the developer to work around, the less you have of grid streets.


  15. Anonymous Avatar

    I’d say there was a double standard.

    How many times have you seen a justification for transit that included the value of all the development it will cause?


  16. Anonymous Avatar

    Nothing has changed but Metro?

    No new jobs, higher pay, more population?

    Are there other areas that have redeveloped without Metro, like Shirlington, Parts of wisconsin Avenue, All of Centreville?

    I suppose you could say that Centrevill is a suburb of Vienna metro.

  17. Anonymous Avatar

    “The U.S. Agricultural Department is required by law (various U.S. farm bills which are passed every few years) to subsidize over two dozen commodities.”

    That’s right. But they are subsidised though a price adder or a price floor. you have to grow something and sell it, then you get the additional subsidy. No one gets paid for not growing something. That’s an urban myth, as far as I know. if there is something I can get paid for not growing, please let me know.

    To get one of the subsidies, you have to show a five yar history in that commodity, which basically means you take a five year bath. Then you get in line for the available dollars. Since it is easier for AG to process a few large subsidies than many small ones, all the money is used up on the top ten percent of farms.

    The little guy gets nothing.

    There are however payments for conservation land, as I stated.


  18. Anonymous Avatar

    My comment was related to the idea that some farmers get paid not to grow things, which isn’t true, so far as I know.

    Because the subsidies result in more production than otherwise, they result in lower food prices, as well as lower costs for overseas food aid.

    I believe we can and should stop subsidizing farms. While we are at it, we can stop having farms subsidise developed areas.

    But, if we stop subsidizing farms, then we need to stop wringing our hands over how to “save” them. And we shouldn’t be too surprised to see them disappear, wherever they don’t make sense.

    Likewise, if we stop subsidising transit, it will disappear, or won’t appear at all, wherever it doesn’t make sense.


  19. Groveton Avatar

    As far as I can see, the Conservation Reserve Program (CRP) is an example of paying farmers not to grow crops. There are presently almost 35 million acres subscribed under this program. I am not a farmer but here is how I understand the mechanics:

    1. The program is only available to agricultural land.

    2. The government leases your land and makes a payment for that lease.

    3. You are not allowed to grow crops for market while you are receiving lease payments.

    4. The intent of the program was (overtly) conservation. I am unsure of how land is subscribed. All I know is that the land is supposed to be environmentally sensitive in order to qualify.

    RH – I suppose you will say that this is the governement paying for conservation rather than paying farmers not to grow crops.

    However, this is a lot of land. There are 640 acres in a square mile. Therefore, 35M acres is equal to 54,687 square miles. The State of Virginia is 42,774 sq. mi. in area. Therefore, the area subscribed under the Conservation Reserve Program (i.e. agricultural land leased by the government and forbidden to grow crops) is substantially greater in size than the Commonwealth of Virginia.

    So, if you want to get paid for not growing crops, you should apply for a CRP. I understand that there are still 5M acres available under the existing cap of 39+M acres. Will you get approved? I have no earthly idea.

    In an interesting sidenote, the CRP is now under fire from … farmers. It seems the CRP payments have not kept up with farm yields during the “biofuel runup”. CRP land now sometimes earns about 1/2 of what is being earned on adjacent farms where crops are planted and harvested.

    It will be interesting to see what happens to the CRP acres as the current leases expire. Will a) the government increase the lease payments because this was really conservation or b) keep the payments the same knowing that acres subscribed to the CRP will fall. My bet is b) since I don’t think this was really about conservation after all. I think it is the government’s inventory of unused farm land used to stabilize prices through CRP subsidies. Now that demand is rising the government will put more acres back into production by failing to pay the going rate for that land. If true, this would have nothing to do with conservation.

    Will ending the subsidies hurt? Well…

    “…the subsidies result in more production than otherwise, they result in lower food prices, as well as lower costs for overseas food aid.”.

    Maybe, probably. However, it is deateable as to whether people would be better off with the lower food prices or having the taxes used for CRP payments back as refunds.

    And what would be the real impact of rising food pricrs? Would people starve or would people start eating cheaper, healthier foods? Put down the steak knife and pick up the broccoli fork?

    Or would people starve?

  20. Larry Gross Avatar
    Larry Gross

    “Because the subsidies result in more production than otherwise, they result in lower food prices, as well as lower costs for overseas food aid.”

    two parts.

    the first part is not true because the government ALSO pays price supports to keep the prices higher than they would normally be.

    The second part is clearly a foreign aid subsidy and if this country wants to help other countries – it should do so by buying unsubsidized and non-price supported food.

    We have the same old problem with subsidies… first we claim they provide lower prices – but we don’t count the subsidy as part of the cost… in other words – we don’t demonstrate a true economic ROI…

    and then the folks who get the subsidies have the gaul to say that you can’t take the subsidies away unless YOU.. CAN prove that there actually is no ROI.

    What should happen – with any economic subsidy is that the recipients should prove conclusively that the subsidy IS justified with an ROI and if they cannot prove it – then no subsidy.

    This is the problem with virtually all subsidies.. there are claims.. unsubstantiated claims….

    Here’s the way it works.

    You start out with a “small” subsidy and fully acknowledge that there is no real ROI.. that the subsidy is really a charity.

    Then after it is established … becomes essentially institutionalized.. it is expanded.. and again.. with no ROI ..

    All of them need to show the ROI as a condition of receiving the subsidy.

    It is the responsible of the recipients to prove this – not the folks who pay it. As usual this is backasswards.

    Then we need to decide how much “charity” we can “afford”.

  21. Groveton Avatar

    It must be Sunday. Something is reaching out and touching my soul. I read a post by Larry Gross and agree with every word.

  22. Larry Gross Avatar
    Larry Gross

    wow.. in 24 hrs from the “bird” to a compliment.. backhanded.. but still…

    the major fly in the ointment is that most everyone agrees to subsidize some services… like schools, prisons, even transit.

    The difference in my mind – is the up-front acknowledgment with respect to what a subsidy is.

    There is no doubt at all about schools, metal institutions, state troopers, even EMS services for highways… but the rub comes from economic subsidies .. which know that they cannot survive as an outright charitable subsidy – so they make the specious claims that it is not really a subsidy but rather an “investment”.

    If the Farming Subsidies had to provide a Corporate Prospectus – they would be hauled up by the Securities and Exchange commission for fraud and fallacious marketing…

    If WalMart did this.. we’d be throwing their corporate execs in jail…

  23. Groveton Avatar

    The “bird” was a pun. Maybe you’re not an NBA fan.

    The first step will all subsidies is to measure them. How much is taken from whom in taxes? How much do those taxpayers receive? What are the surplus and deficit amounts gotten/given by person (or jurisdiction).

    It is somewhat complicated but not impossible.

    However, I believe that the “political class” at all levels has no interest on this accountability. They would rather live in the hazy world of subsidies, cross subsidies, convoluted tax schemes, etc. Robert Reich’s book Supercapitalism had some good thoughts. One was that the special interests (in Mr. Reich’s mind – usually corporations) have taken over government and drowned out individual voters / taxpayers. While I think he’s right I’d add entities like the NEA and the WWF to Mr. Reich’s list of special interests.

    These groups manipulate the governance process through the artful use of subsidies. From upzoning land to declaring certain highways “scenic byways”. From providing sanctuary status to undocumented workers and their children to massive transfers of wealth from jurisdiction to jurisdiction for education. Farming subsidies, steel subsidies, the list goes on.

    THe problem with picking any one subsidy is that it ignores all the others. Someone says “we’re not going to pay for NoVA’s roads” and NoVA says, “then we aren’t going to pay for your schools or prisons or agricultural subsidies.”.

    In a world full of subsidies you can’t eliminate one under the guise of fairness. In fact, this could easily be less fair. One could assume that a certain homeostasis of subsidies has developed. The special interests have all argued and the many subsidies more or less even out. Removal of any one large subsidy would throw the operation out of kilter. You either have to look at them all or you might as well not look at any.

    Education is a favorite of mine. It’s one of those heart rending, misty eyed areas where you just have to agree to subsidies. The sobbing argument always includes some form of “educations costs less than jail”. Well, we’ve been at these education subsidies for quite some time – are our jails becoming empty? DC public schools are always near the top of the list when it comes to per capita spending. Are those schools thriving?

    So, even sob story subsidies like education have to make you wonder – do they really work? And is education really a subsidy for the kids? I contend that many counties in Virginia pay absurdly low real estate taxes through absurdly low real estate tax rates. Then those same counties head to Richmond rattling a tin cup saying it would be “boo hoo” unfair not to subsidize their public school systems. Shouldn’t everybody pay their fair share for their own education before looking for others to pay?

    I’d love to hear one politician say, “I am going to account for all the major subsidies in Virginia”. They don’t even have to say what they’ll do about the subsidies (if anything). They just have to say that they will provide an accounting.

    Isn’t that the place to start?

  24. Jim Bacon Avatar
    Jim Bacon

    A Gubernatorial, blue ribbon commission to identify and study government subsidies in Virginia. We’ve had commissions look at unfunded mandates. Why not subsidies?

  25. Larry Gross Avatar
    Larry Gross

    “measuring” subsidies

    as many as can be done and as well as can be done… and for many it’s not an impossible task.

    For instance, A Bush/Spellings education initiative called “Reading First” was found to be not effective.

    HeadStart, on the other hand has been found to produce results.

    re: cost-effectiveness.. i.e. paying gazillions of dollars in education to keep folks out of prison…

    the two biggest funding black-holes in Virginia is education and roads.

    Both of them are vital to commerce and society but both of them are also the biggest evaders of transparency and accountability especially when it comes to measuring effectiveness.

    Both of them proceed on the basic assumption that more money will never hurt and they have no shortage of surrogates who work tirelessly to ensure funding success.

    Every year.. we need “more money” for schools – as opposed to saying.. we need “x” dollars for “y” improvements.

    The way we do schools is akin to engaging to contractor that you will pay as much as you can afford and he will do the best that he can to provide you with quality square feet of space.

    The Clare Booth Luce Institute did a fairly simplistic cost-effectiveness study of Virginia schools.. but it was a start… at least.. it clearly showed a high and a low range per student per composite scores.

  26. Anonymous Avatar

    “We have the same old problem with subsidies… first we claim they provide lower prices – but we don’t count the subsidy as part of the cost… in other words – we don’t demonstrate a true economic ROI…”

    I would never do that. Of course you have to count the subsidy as part of the cost. But, there is a huge disconnect between what the farmer gets paid and what the consumer buys. As a result it takes only a small boost to the farmers to create a lot of extra commodities.

    For example, you need to have a five year production history before you can get on the list to apply for a subsidy. And then you may not get it. All of that extra production comes in for free. It’s like kids scrambling for candy thrown at a parade.

    However, you are correct: I don’t actually have the numbers to show a true economic ROI. At the same time, you have all these do-gooders claiming we need to save our farms for some reason – and that usually takes money. As Groveton points out, we depend on 2% of the population to feed us now: how small do we want that number to be? When does it become a possibility for a single point of failure? How big of a meat recall can we stand from a single processor?

    Anyway, the main point ai was trying to make is that while there are subsidies, you don’t get paid to not grow, as far as I know.


  27. Anonymous Avatar

    “I suppose you will say that this is the governement paying for conservation rather than paying farmers not to grow crops.”

    Yes. I mentioned the conservation reserve program in my initial post. “Supposedly” it is for conservation.

    In order to get it, you have to take land out of production, and the land must be environmentally sensitive. Usually this means Riparian land and the point is to preent runoff.

    You are right, it is a lot of land, but if you listen to conservation promoters, it is nowhere near enough. Some think we should live on 5% of the land and conserve 95%.

    And you are also right, it is frequently not as much as the farmer could make growing crops on it. Which isn’t saying much. so yes, he could make more growing crops, but then he’d have to grow the crops.

    It’s like what larry said about not counting the cost of the subsidy, but in reverse.

    Nope, I’m no eligible for CRP. First, I have to grow the right crops in the wrong places, then I can sign up. Same with other subsidies, you have to havea history. To get that history you have to take a bath for a few years. It is pretty Machiavellian.


    ” Would people starve or would people start eating cheaper, healthier foods? Put down the steak knife and pick up the broccoli fork?

    Or would people starve?”

    We won’t starve any time soon. But you travel a lot and I know you see people who will. Right now there are people in Haiti eating dirt that they fry up with a little oil and some seasonings.

    What happens when they can’t get the oil?

    I don’t think there is any trickle down in the “let them eat cake” story.

  28. Larry Gross Avatar
    Larry Gross

    “we depend on 2% of the population to feed us now: how small do we want that number to be?”

    as small as the market will support.

    Just like with ANY commodity…if there is a market demand for it – then it will be economically profitable.

    How many folks jobs depend on cutting slabs of granite out of a cliff?

    ..despite the fact that such commodities cost an arm and a leg.. there is still a market demand for it.

    ..your view.. seems to me.. to argue that more folks would “benefit” from having longer lasting counter tops if they were not so danged expensive.. so we do everyone a favor.. and subsidize the production of it to “lower prices”.

    Just because we are talking about food.. rather than counter tops… or how about band aids or tampons… or anti-biotic creams???

    I’d probably relent on subsidized condoms to prevent disease… but I’d REQUIRE a true cost-benefit to be DEMONSTRATED as a condition of granting a subsidy rather than the claim that if you can’t prove it uneconomic…that it is allowed.

    and I’d sunset every single one of them and require new data every year or so…

    the reason why this country is hooked on oil is that we have a mindset that gasoline should be subsidized because it is “needed”.

    When the market actually works like it should.. we have folks bellyaching that they cannot afford the gasoline to drive 50 miles to work SOLO in an SUV… HORRORS!

    DOH !!!!!

    oh.. and then it becomes a massive conspiracy to rip folks off… like subsides are not…

  29. Anonymous Avatar

    Actually, Larry, if it was only a matter of producing enough to feed Americans and whatever other markets we serve, I’d agree with you. We need a lot fewer farms, not more. Eventually, the ones that are left would be able to make some money.

    But, I think there is more to it than that. I think having a reliable supply with multiple sources for backup is worth something. I think having some reserve for the future is worth something. And I think all the other things that open space does is worth something.

    And, I don’t think you get things taht are worth something without paying for them.

    For whatever reason, the government has long chosen a policy that leads to artificially low food prices. Some people claim, the the cost in subsidies actually keeps prices low, not raise them as you might expect.

    Like you, I’d like to see the “real” cost benefit demonstrated. But then, I’d like to see that for a lot of other things, too. Not just the things I oppose.

    But, on top of the cheap food lobby we have a bunch of other constituencies claiming we need to save the farms. Some are anti-sprawl advocates, some are conservation advocates, some are hoping to buy a farm someday.

    So, it isn’t as if the only thing you get for your subsidy is cheap food.

    How is it you get your gas subsidized? As far as I know I don’t. I suppose you could argue we need a military presence to keep supplies secure, but we pay for that, too. But where is thi gas subsidy? I don’t see it.

    When the market does not work as it should, we expect the government to step in. To charge polluters for externalities, etc.

    But there is no difference between a negative subsidy or disincentive and an incentive or subsidy, except the value of the sign. Either one can work well or it can be abused, and whether it is “abused’ or not is frequently a political question that depend on one’s party and other views.

    Which is why we need to insist on fair and unbiased cost and benefit analyses. We need to insist on enough procedure built in so that the boss cannot be easily sandbagged. So that we don’t get pie in the sky assurances that cannot possibly become true.

    Some fellow went past me the other night in a blacked out Cadillac Escalade, and I guessed he was knocking back a hundred plus MPH. As a result, I don’t think gas prices are high enough yet.

    Your HOT lane charges will be a negative subsidy to certain people, and probably result in a positive subsidy to others. If the market worked the way it is supposed to, Fluor could build their own highway from scratch. metro would be able to pay more than 55% of it OPERATING costs. It wouldn’t need “a source of dedicated funding” (read permanent subsidy). Plus go begging for capital needs on top of that.

    Where is the cost benefit analysis that will show the true net cost of how all this affects the economy?

    We don’t have it. We don’t know how to do it. We don;t even know how to attempt it without being mired in politics and special interests.

    I’m not so concerned that the farm subsidies are too high or too low. you could argue that either way and be right.

    I’m concerned that we have them for only a few, the largest few, and the take is rigged.


  30. Larry Gross Avatar
    Larry Gross

    re: “I think having a reliable supply with multiple sources
    yadda yadda

    are worth something without paying for them.

    Ray.. when you go get your prescriptions are you satisfied that they’ll be there.. that there is a reliable supply…???

    How about your electricity ?

    band aids… surgical sutures?

    should we have the food equivalent of the Strategic Oil Reserve?

    in THIS country… ?? and for that matter.. the world .. where many foods are essentially commodities?

    I don’t think we are going to run out of food unless of course we screw the climate pooch and then we’re all done anyhow….

    I could be wrong, but I think the idea of running out of food is a relic of the depression days…

    You may have to pay twice as much for eggs or your wheaties but both will still be on the shelf…

    unless of course we’ve already messed up the climate pooch…….

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