Railroad to the Casinos – A $700 Million Boondoggle

Posted: May 23, 2006 3:39 PM

If you thought the “bridge to nowhere” was too expensive, take a look at the price tag of the “railroad to the casinos.” The anticipated changing of a railroad route may not be a surefire route to riches for the citizens of Mississippi but it would be a straight flush for the casinos. Economic conservatives are critical of this deal; social conservatives also should be.

Senator Thomas Coburn (R-OK) challenged an appropriation earmark valued at $700 million sought by the political establishment of Mississippi – namely, Senators Trent Lott (R), Thad Cochran (R) and Governor Haley Barbour (R). (Senator Cochran is Chairman of the Appropriations Committee.) Coburn takes strong exception to Mississippi politicians’ attaching the earmark to the Iraq/Katrina Emergency Appropriations Bill. His amendment to derail funding for the rail line and a number of other projects lost 49-48. Another amendment offered by Senator Craig Thomas (R-WY) to strip earmarks, including the rail funding, from the Emergency Appropriations Bill also lost.

Coburn knew his fight was uphill but offers compelling points that address a larger problem within the institution of Congress and its appropriations process.

Here’s the background on this controversial project and the challenge that will occur.

The Senate Appropriations Committee this week considered the Iraq/Katrina Emergency Appropriations Bill. The House had passed a bill last month. The Senate took up the bill after some $14 billion had been added.

The railroad issue demonstrates just how far off-track the appropriations process has become. The rail tracks have been repaired and the railroad is fully operational. That lead Coburn to charge, “It is ludicrous for the Senate to spend $700 million to destroy and relocate a rail line that is in perfect working order, particularly when it recently underwent a $250 million repair.” (Later accounts put the estimate at $300 million.)

Lurking behind the issue is how the appropriation is handled and where the relocation would lead. Supporters say moving the tracks would allow a new highway to be built and protect the rail line from future storms. Coburn counters, “Emergency supplemental bills are designed to help our nation confront emergencies. While the current location of this rail line may be displeasing to local economic developers and politicians, it is hardly a national emergency.”

ABC NEWS reporter John Cochran has reported that the movement of the rail tracks was an item high on the agenda of local developers. One businessman, identified as representing the Isle of Capri Casino, told ABC NEWS that he believed economics took a backseat to safety but moving the tracks “would probably help development…and give us a good east-west connector that is safe.” If that is the case, then why not wait and let Senators Cochran and Lott advance this proposal through the regular appropriations process?

Many opponents of the appropriation contend the earmark clearly is intended to help assist the casino industry and cite a report issued by the Mississippi Governor’s Commission on Recovery, Rebuilding and Renewal, which notes the redesign can help the “evolving” activities for the Port of Gulfport which include “a mix of commercial businesses and gaming.”

THE CHRSTIAN SCIENCE MONITOR has called the plan an attempt to establish “a Las Vegas South.” THE NEW YORK TIMES reported last December that the casinos to replace those destroyed by the hurricane are to be sited on land, not on barges as they had been located before.

Architect Andres Duany, a leader in the New Urbanism movement who advocates mixed development, had recommended interspersing casinos with stores and restaurants. The casino owners balked at Duany’s proposal because as Bernie Burkholder, President and CEO of Treasure Bay Casinos, explained, “A casino owner wants people to stay on the property.” In short, Mr. Burkholder wants them gambling, risking their personal financial security and that of their families.

Social conservative leaders and organizations unfortunately were silent on the issue, leaving the protests to THE NATION and THE NEW REPUBLIC. Several economic conservative groups made public their opposition to the amendment just before Coburn offered the amendment. Will social conservative groups come forward and urge the Congressional leadership to strip the rail line funding out in conference? It is a bad earmark and not only from the standpoint of the Federal budget and its abuse of the emergency supplemental appropriations process. It is bad for Mississippi’s citizens. True development of Mississippi’s economy would be fostered by attracting industries with a future. Gambling may have a future in Mississippi but what does it have to offer the State’s citizens? Many will have a bleaker future. Here’s what the American Family Association of Mississippi says about the corrosive impact of the Mississippi gambling industry:

    “According to a study published in our own state by the University of Southern Mississippi in 2000 (found under the resources section), an estimated 5% of our population in 1996 were "problem" gamblers and an estimated 2% of our population have a "probable pathological" problem with gambling. Given the population of a census estimate for 2001 at 2,858,029 people in MS, that's 142,901 people and 57,161 people, respectively. Every gambler with a problem costs society varying estimates in money on a yearly basis. One study places just the pathological gambling costs at $13,586 per pathological gambler. Looking at just the estimated 57,161 people with a "probable pathological" problem, the costs to society are $776,575,760 per year. Gambling costs us all and not just in the counties in which it is legal. In no matter which area of our state you live, you can read about case after case of embezzlement that didn't used to be such a high rate.”

Congress is gambling with our future and those of coming generations by its unwillingness to trim spending. The earmark for the proposed rail line siting stuffed in the Iraq/Katrina Emergency Supplemental Spending Bill illustrates Congress’ unwillingness to trim Federal spending. Blame falls on members of both parties but it is distressing that key Senators of the party which claims to support less spending and real government reform are lending this massive spending effort support. Parochial special interests are placed ahead of the national interest. Is it any wonder one ranking lobbyist recently told THE WASHINGTON POST that lobbying would remain an industry in demand in Washington because “We still have a pretty big government and it has a pretty long reach?”

Fortunately, the White House issued a Statement of Administration Policy just before the vote which emphasizes the need to fund operations in Iraq and to overcome Katrina but declares “the Administration is seriously concerned with the overall funding level and the numerous unrequested items in the Senate bill that are unrelated to the war or emergency hurricane relief needs. The final version of the legislation must remain focused on addressing urgent national priorities while maintaining fiscal discipline.” The next sentence declares President Bush’s willingness to veto the bill if it remains stuffed with items such as the rail line earmark. (Majority Leader William Frist, M.D. (R-TN) believes he has the necessary votes to sustain such a veto.)

A rebuilt, revivified casino industry may spur employment in Mississippi -- and if the State’s citizens want it, fine - but it should not receive Federal funds and Mississippi citizens should ask themselves what toll casinos take on the State’s moral climate and the work ethic. The odds may be stacked against Mississippi’s gamblers’ hitting the jackpot; maybe the safer bet is to become K Street lobbyists pushing earmarks.

Senator Coburn was right and courageous to challenge this earmark. He should continue his fight for fiscal responsibility. President Bush is right to threaten the veto. Let us hope that the President decides to wield his veto stick often to rein in Congress’ lack of fiscal restraint.