In some alternate timeline — the one without cost overruns for transit projects and on-time delivery — New Jersey’s ARC tunnel would be opening this year. The plan to add Hudson River capacity for New Jersey Transit involved a deep-bore terminal dead-ending underneath Macy’s and was flawed from the start, but it faced solvable problems that could have been resolved. It was also funded and underway when former Garden State Governor Chris Christie pulled the plug. Although New Jersey transit advocates have convinced themselves that Christie saved the state from a mistake due to the design of ARC, in the intervening eight years, the state spent a lot of money that should have gone to transit on roads, and New Jersey Transit has withered on the vine.
As part of Christie’s ex ante rationale for canceling ARC, he challenged the region’s players to come up with a better plan, and Amtrak eventually settled on the Gateway Tunnel project, a massively costly project that would run from $20-$30 billion and involve new tunnels, new bridges and a new rail station in Manhattan. It would allow for real high-speed rail to pass through Manhattan but wouldn’t connect Penn Station and Grand Central, the Holy Grail of rationalizing New York’s regional rail problem. It was to be funded in part by New York and New Jersey and in part by the feds, but that’s when grudge politics stepped in.
The Washington Post broke the news on Friday: “According to four officials familiar with the discussions, Trump has taken a personal interest in making sure no federal dollars flow to a project that is considered critical to his hometown’s long-term economic prosperity.” That’s right: Despite earlier claims that he would hold up the feds’ end of the funding deal, President Donald Trump has decided he does not want to fund the Gateway Tunnel project.
The Post wasn’t clear on the whys and wherefores. Ted Budd, a North Carolina representative, claimed the issue was tax fairness. “North Carolina and the other 48 states should not have to foot the bill for this hall of fame earmark,” he said. But New York and New Jersey are two of the biggest net contributors to federal coffers, and even $10-$15 billion on Gateway spending wouldn’t begin to even out the northeast’s tax deficit vis-a-vis federal spending.
The Times had more and the motives seem personal:
Mr. Trump’s opposition to the project is in part the result of his belief that it is important to Senator Chuck Schumer of New York, the Democratic leader, according to one person with knowledge of the president’s thinking on the issue. Mr. Trump has told Republicans that it makes no sense to give Mr. Schumer something that he covets — funding for the tunnels — at a time that Mr. Schumer is routinely blocking Mr. Trump’s nominees and other parts of his agenda, the person said.
The move has angered members of Trump’s own party, as The Times subsequently detailed:
Just a few months ago, the idea once again appeared to have gained the support it needed in Washington and, once again, it looks as if one powerful official — in this case, the president — could put a stop to it. The latest and perhaps most ominous threat came late Friday night when it was revealed that President Trump had asked Republican leaders to withdraw federal funding for the project.
Mr. Trump has promised to spur “the biggest and boldest infrastructure investment in American history.” So his opposition to an established project that is widely considered a solution to one of the nation’s most critical infrastructure needs has confounded even veterans of his own party. Some fear that Mr. Trump is jeopardizing commerce along the Eastern Seaboard simply to spite Senator Charles E. Schumer, the Democratic leader from New York. “If the news reports are accurate that he wants to kill it or hold it because he’s mad at Chuck Schumer, that makes no sense,” said Representative Peter King, Republican of Long Island. “This is essential to the national economy as well as the regional economy.”
He said he would not vote for a funding bill that did not include some money for the rail-tunnel project, which is known as Gateway. “I support President Trump on a lot of issues, but on this one he’s wrong,” Mr. King said in an interview on Saturday.
Kathryn Wylde of the Parntership for New York City tried some odd reverse psychology that is bound to have little effect on Trump. “I have no doubt that regardless of what he says, he knows the importance of this project and he does not want it to fail on his watch,” she said, providing no evidence that the president is looking beyond personal grudges or, optimistically, horse-trading. Needless to say, the president doesn’t have a big fan base in the Big Apple and has always flown in and out of New York City. Amtrak Don he is not.
The reaction has been loud and generally in favor of Gateway. Bloomberg News delved into the economics of letting the current tunnels fail, a real reality within the next six to eight years. Gateway, the piece notes, would generate $2.16 in economic activity for every dollar spent, and not to build Gateway while risking a failure of the current tubes could be catastrophic for the country.
Another piece in Crains New York urged planners to go back to the drawing board to reduce the scope. Could a one-tube tunnel for less cost solve the problems? It seems unlikely as tunneling isn’t generally the most expensive part of these projects, and reducing the number of tubes doesn’t equate to a 50% reduction in the costly infrastructure needed for the new rail capacity.
What no one has talked about is cost control. Following the winter’s Times exposes on construction costs, Gateway is primed for an aggressive reform attempt. Were Trump operating in good faith, he would urge New York and New Jersey to tackle the reforms highlighted in the series on the New York region’s cost problems. The feds could make any grant subject to a cap and contingent on cost cutting. Based on standard international multipliers at play in New York City, the entire Gateway project would probably cost around $10 billion in even the most expensive European cities, but our version is going to carry a $20-$30 billion price tag depending upon scope. No one wants to challenge this 800 pound gorilla in the room, and Trump is operating on personal political grudges rather than a good-faith attempt at cost reform.
And so, in a way, we’re having the ARC Tunnel debate all over again. On Saturday, Josh Barro and I engaged in a back-and-forth on Twitter over this very issue. Barro argued that perhaps it’s not bad for the Gateway proponents to try to whittle down the price, and in one sense, he’s not wrong. Gateway shouldn’t be this expensive, and New York and New Jersey should be interested in cost reform so that the dollars they can get go further. But even if the states come back with a more sensible cost proposal, Trump still won’t fund the project; he wants to use this a cudgel to beat Schumer, and everyone in the region, Republicans and Democrats alike, will lose out.
As Chris Christie doesn’t deserve praise for canceling the ARC project for the wrong reasons before later stumbling into a flaw in the chosen route as an excuse, Trump shouldn’t get “credit” for bringing attention to Gateway’s costs. The decision to withhold funds for no good reason is the wrong one; the move to ignore extremely high costs is also the wrong one. But one does not excuse the other. The region needs Gateway, and to get there will require some support from Washington, DC. For now, though, we’ll keep holding our collective breaths over the battle for dollars.