$8 Billion for High Speed Rail? Stimulus Funds Could Jump Start Such Systems in the U.S., Says Obama

President Obama today called for $8 billion of the $787 billion economic stimulus package to be invested in the development of 10 high-speed rail corridors, a first step toward bringing the United States up to par with long-established high-speed rail networks in Europe and Asia. Wharton professor of business and public policy W. Bruce Allen, whose research focuses on transportation, says the investment is overdue.

"We're way behind Europe and Asia on these trains," Allen said. In its coverage of Obama's announcement, The New York Times called the American rail network a "caboose" relative to those in such nations as Japan, Germany, France and Britain. Taiwan recently spent about $15 billion to build a high-speed network (see Taiwan's High-speed Rail: It's Been a Rapid Learning Curve).

Able to reach speeds of about 300 miles per hour, the trains would provide a viable alternative to air transportation on short-haul trips of up to about 400 miles, Allen said. Indeed, since the 9/11 terror attacks, the number of rail passengers in the Northeast Corridor from Washington, D.C. to Boston has exceeded the number of air travelers, even at the relatively poky speeds of Amtrak's current fleet, according to Allen. "Because of security, people have to get to the airport an hour before they leave, and of, course, trains can pick up and drop off passengers in downtown stations."

Amtrak already has trains capable of reaching 185 miles per hour — on paper. But on Amtrak's actual rail corridors, they rarely exceed 100 miles per hour, mostly because of traffic conditions and the physical limitations of the rails. The proposed investment would not only buy new trains, but also rails capable of supporting such high speeds.

Obama said the high-speed corridors would help reduce highway traffic congestion and reduce greenhouse gas emissions. "The trains are very energy efficient, more so than airlines – if the trains are being used," Allen said. Complaints about the level of service provided by Amtrak haven't helped attract passengers. Allen noted that the government-sponsored passenger railroad has long suffered from underfunding. Still, he said, "I'd like to see them put in place a Southwest [Airlines] style of management that really understands its passengers' needs."

Comments

New This Week

The Business of Signing a Superstar Athlete
Podcast

The Business of Signing a Superstar Athlete

October 16, 2026 • 13 min listen

Kenneth Shropshire, professor emeritus of legal studies and business ethics at the Wharton School, explores the expectations, business opportunities, and community impact that come with signing a superstar athlete like LeBron James.

Why Gen Z Is Choosing Sports Betting Over Retirement Savings
Podcast

Why Gen Z Is Choosing Sports Betting Over Retirement Savings

October 14, 2026 • 13 min listen

Michael Platt, professor of marketing, psychology, and neuroscience at the Wharton School, explains why sports betting is capturing young people’s attention and what it means for their financial futures.

The Analytics Behind Baseball’s Small-Market Success
Podcast

The Analytics Behind Baseball’s Small-Market Success

October 14, 2026 • 53 min listen

Mike Petriello, Major League Baseball’s director of stats and research, explains the swing data, player development, and matchup decisions changing how teams compete.