Nancy Pelosi’s Subway Project: A Government’s Hidden Spending Secret
When U.S. Sen. Joni Ernst, R-Iowa, criticized then-House Speaker Nancy Pelosi in 2021 for an expensive San Francisco-area subway expansion, the California Democrat’s favored rail project was already over $1 billion above budget.
Enraged, the senator from the nation’s top pork-producing state presented her monthly “Make ‘em Squeal” award to the U.S. Department of Transportation for “allowing taxpayers to be taken for a ride on this gravy train that is billions over budget,” as reported by Fox News.
“The tunnel being dug for this subway is literally a bottomless pit for taxpayer money,” Ernst declared in a press release. At that time, the Bay Area rail project, initially estimated at $4.7 billion, had skyrocketed to $6.9 billion.
That price tag now seems insignificant. The cost of Pelosi’s favored deal has nearly tripled.
“I don’t want to ever be sugarcoating things for our” VTA Board of Directors, Tom Maguire, Valley Transportation Authority’s megaproject officer, told the Mercury News. “I think there’s a chance the number is over 12.2 billion dollars, but I don’t know how much higher.”
As Ernst points out, that estimate for the six-mile project now amounts to over $2 billion per mile. Your tax dollars at work.
These cost surges may not be over. This boondoggle was supposed to be completed by 2026, but now its planners are looking at a completion date of 2037, if not later. So much for being “shovel-ready.” Despite this, a federal report predicts that daily ridership in 2040 will be 20,000 passengers lower than what the local transportation authority optimistically estimated, according to the San Jose Spotlight.
The Federal Transit Administration, funded by American taxpayers, is covering about half the cost of the transportation project.
‘Breach in Transparency’
The massive cost overruns associated with Pelosi’s San Francisco project are just the tip of the iceberg when it comes to accountability issues in government.
A scathing report in January by the Santa Clara Valley Transportation Authority’s auditor general highlights what some have called a “breach in transparency.” The report reveals that communications related to the project have been “misleading and/or dismissive of concerns.”
However, President Joe Biden and Transportation Secretary Pete Buttigieg continue to support the Bay Area project. “The FTA has treated this program as one of their top transit projects in the country,” said Palo Alto Councilmember Pat Burt. “They’ve repeatedly found it to be an important and worthwhile investment. And they’re committed to it. However, we still have uncertainties.”
Indeed, uncertainties abound. The bloated subway expansion is just one example of federally funded projects that lack transparency. This is especially concerning considering the $4.7 trillion in federal funds allocated in response to the Covid pandemic through various acts. Much of that money has been mismanaged and poorly accounted for by the Biden administration.
An audit conducted by the Government Accountability Office last year identified 49 federal agencies that failed to report data to USAspending.gov, the official website for tracking federal spending.
“Although many nonreporting agencies may not be required to report, neither the Department of the Treasury nor the Office of Management and Budget (OMB) have clear responsibility for determining which agencies must report,” states the GAO report. “In addition, among the agencies that did report to USAspending.gov, we found that some reported COVID-19 obligation amounts did not agree with the information in their budget and annual financial reports.”
Ernst introduced a provision amending the Federal Funding Accountability and Transparency Act to ensure that federally funded projects’ “other transaction agreements” (OTAs) are reported to USAspending.gov. However, the Biden administration has failed to comply with this law.
The Pentagon, which has repeatedly failed audits, and the Small Business Administration are among the worst offenders. Ernst stated that these agencies are not adhering to two other accountability laws she authored, the COST Act and the Billion Dollar Boondoggle Act, which require the DOT to disclose all taxpayer-funded projects that are over budget by $1 billion or delayed by five years or more. The Transportation Department is a year and a half behind schedule in releasing the billion-dollar boondoggle list.
As Ernst emphasizes, the transparency act mandates that all federal financial assistance and expenditures be promptly posted and available at USAspending.gov. However, the U.S. Department of Treasury, which operates the website, claims it is not required to report OTAs. The GAO report found that over $40 billion in OTAs were not listed on the site, and this amount is growing significantly.
In March 2024, Senator Ernst will present her Squeal Award to the Treasury Department as she introduces the Stop Secret Spending Act. This act would require full disclosure of OTAs on the public website and “inform the public of any other secret Washington spending schemes.”
“We all know there is wasteful spending everywhere you look in Washington, but Biden wants to keep you in the dark, because we can’t stop what we can’t see,” Ernst stated. “Thanks to USAspending, for example, I learned that EcoHealth, the organization that sent over one million taxpayer dollars to the Wuhan Institute for dangerous experiments on bat coronaviruses, just received more dollars from the Department of Defense to conduct research on ‘high-risk pathogens’.”
During Sunshine Week, dedicated to promoting transparency in government, Pelosi’s transportation boondoggle and the federal government’s failure to account for taxpayer dollars highlight the concerns of transparency advocates. Adam Andrzejewski, Founder and CEO of Open the Books, stated that Ernst’s bill would provide Americans with the transparency they deserve.
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What steps have Senator Ernst and the Biden administration taken to address transparency and accountability issues in government spending
The Costly Reality of Pelosi’s San Francisco Subway Expansion
In 2021, U.S. Senator Joni Ernst of Iowa called out House Speaker Nancy Pelosi for her support of an expensive subway expansion project in San Francisco. At the time of Ernst’s criticism, the project was already over $1 billion above its initial budget. Ernst, outraged by the skyrocketing costs, presented her monthly ”Make ’em Squeal” award to the U.S. Department of Transportation for allowing taxpayers to be taken for a ride on this gravy train.
According to reports, the initial estimated cost of the Bay Area rail project was $4.7 billion. However, it has now nearly tripled in cost, reaching a staggering $12.2 billion. The excavation for this subway has become a bottomless pit for taxpayer money, as Ernst aptly described it. To put into perspective the extent of the cost inflation, the project now amounts to over $2 billion per mile.
Despite these exorbitant cost increases, the project’s completion date has been pushed back to 2037 or even later. It is clear that the project is far from being “shovel-ready,” as politicians often claim. Furthermore, a federal report predicts that daily ridership in 2040 will be 20,000 passengers lower than what the local transportation authority estimated.
The Federal Transit Administration, funded by American taxpayers, is covering approximately half of the transportation project’s cost. This raises concerns about transparency and accountability in government spending, especially considering the $4.7 trillion allocated in response to the Covid pandemic. Many federally funded projects lack transparency, resulting in mismanagement and poor accounting.
A scathing report by the Santa Clara Valley Transportation Authority’s auditor general has highlighted a breach in transparency regarding communications related to the project. The report reveals that these communications have been misleading and dismissive of legitimate concerns.
Despite the red flags and concerns raised by auditors, President Joe Biden and Transportation Secretary Pete Buttigieg continue to support the Bay Area project. They view it as an important and worthwhile investment, despite the uncertainties surrounding the project.
This lack of transparency is not exclusive to the San Francisco subway expansion. Last year, an audit by the Government Accountability Office identified 49 federal agencies that failed to report data to USAspending.gov, the official website for tracking federal spending. There is no clear responsibility for determining which agencies must report, leading to discrepancies in reported COVID-19 obligation amounts.
Senator Ernst has taken steps to address this issue by introducing provisions to amend the Federal Funding Accountability and Transparency Act. These provisions would ensure that federally funded projects’ other transaction agreements are reported on USAspending.gov. However, the Biden administration has failed to comply with this law.
It is concerning that even agencies like the Pentagon and the Small Business Administration, which have repeatedly failed audits, are not adhering to accountability laws. The lack of transparency and mismanagement in federally funded projects is a pressing issue that needs to be addressed.
In conclusion, the costly and poorly managed San Francisco subway expansion project serves as a stark example of the challenges posed by accountability and transparency in government spending. It is imperative for elected officials and government agencies to prioritize responsible fiscal management and provide accurate and transparent reporting to ensure taxpayer dollars are spent wisely.
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