Commentary Magazine


Topic: Government Accountability Office

No, the GAO Report Does Not Undermine Christie’s Tunnel Cancellation

In 2010, New Jersey Governor Chris Christie announced he was canceling a proposed public transportation project that would have constructed a new train tunnel under the Hudson River. The project was meant to ease commuter congestion between New Jersey and New York City. Christie was sympathetic to the aim of the tunnel, but when it became clear the costs would spiral, he realized it would contravene his gubernatorial mandate, which was to bring the state’s shockingly debt-burdened books closer to fiscal sanity.

In addition, the state’s transportation trust fund was almost bankrupt, and would have necessitated an increased gasoline tax to pay for the shortfall. That means the cost of the tunnel would have been far higher to New Jerseyans than just the on-paper cost estimate. So Christie canceled the tunnel and steered $4 billion earmarked for the project to the transportation trust fund. It’s hard to imagine a more reasonable decision, especially in light of the state’s finances and Christie’s promise to cut spending and eliminate waste rather than simply raise taxes even more to pay for the state’s exploding debt. But Democratic Senator Frank Lautenberg swore that neither he nor the federal government were done with Christie. Today, via the New York Times, they seek their revenge.

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In 2010, New Jersey Governor Chris Christie announced he was canceling a proposed public transportation project that would have constructed a new train tunnel under the Hudson River. The project was meant to ease commuter congestion between New Jersey and New York City. Christie was sympathetic to the aim of the tunnel, but when it became clear the costs would spiral, he realized it would contravene his gubernatorial mandate, which was to bring the state’s shockingly debt-burdened books closer to fiscal sanity.

In addition, the state’s transportation trust fund was almost bankrupt, and would have necessitated an increased gasoline tax to pay for the shortfall. That means the cost of the tunnel would have been far higher to New Jerseyans than just the on-paper cost estimate. So Christie canceled the tunnel and steered $4 billion earmarked for the project to the transportation trust fund. It’s hard to imagine a more reasonable decision, especially in light of the state’s finances and Christie’s promise to cut spending and eliminate waste rather than simply raise taxes even more to pay for the state’s exploding debt. But Democratic Senator Frank Lautenberg swore that neither he nor the federal government were done with Christie. Today, via the New York Times, they seek their revenge.

When Christie canceled the tunnel, he cited estimates that the project’s cost overruns would be even higher than previously expected and that New Jersey would be left holding too much of the tab. So Lautenberg had the Government Accountability Office (GAO) investigate Christie’s claims. The GAO investigation seems to have amounted to asking the federal government whether they swear, scout’s honor, that the project would meet its cost estimates–because, come on, the federal government never underestimates the price of a massive construction scheme.

The GAO will release its report this week, accusing Christie of misleading about the costs of the project. The GAO leaked the report today to the Times, however, so they could slap a headline on it that would cement the parameters of the discussion while discouraging anyone from actually reading the report. Even the leaked accusations, however, miss their mark. Any honest reading of the GAO’s findings shows Christie to have been right all along. Here is the crux of the disagreement:

The report by the Government Accountability Office, to be released this week, found that while Mr. Christie said that state transportation officials had revised cost estimates for the tunnel to at least $11 billion and potentially more than $14 billion, the range of estimates had in fact remained unchanged in the two years before he announced in 2010 that he was shutting down the project. And state transportation officials, the report says, had said the cost would be no more than $10 billion.

Mr. Christie also misstated New Jersey’s share of the costs: he said the state would pay 70 percent of the project; the report found that New Jersey was paying 14.4 percent.

In fact, the “range of estimates” most certainly did not remain unchanged, as the GAO and the Times claim. The project was thought to be too expensive for the state when Christie was told it would cost more than $8 billion. As the GAO admits, state officials then said the tunnel could cost up to $10 billion. But the cost estimates didn’t stay at $10 billion either. As the Times report buries later on in the story, federal and state officials admitted costs could rise to as high as $12.4 billion, and then six weeks before Christie cancelled the project federal officials came back and said the cost might actually hit $13.7 billion. When state officials who supported the project got nervous about Christie’s dedication to the tunnel, they returned to insist it would probably stay at about $10 billion.

In other words, Christie was right. As for the state’s share of the costs, the article goes on to explain that the GAO only arrived at its number (14.4 percent) by excluding another bridge New Jersey would be required to build as part of the project, excluding the fact that New Jersey would have to fork over earmarked transportation stimulus funds for the project, and excluding the share of costs held by the Port Authority, which is run by both New Jersey and New York.

It is the GAO, egged on by Christie’s Democratic opponents and spun by the New York Times, that is misleading about the costs of the project. In hindsight, this only makes Christie’s decision not to be cozened by the tunnel project even wiser.

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Containment Is Coming

Two reports today strengthen the argument of those who suspect that sanctions on Iran are too little, too late, and that they are simply another stall for the Obami –  who are slow-walking toward containment. First, we learn that foreign investors are continuing to bolster the Iranian economy:

Forty-one foreign companies had some form of commercial activity in Iran’s energy sector over the past five years, despite American laws that could prompt U.S. sanctions against such firms, according to U.S. government auditors.

The report, to be released Thursday by the Government Accountability Office, found that some of the companies are headquartered in some of the U.S.’s closest allies, including Japan and South Korea. A similar GAO study conducted three years ago found half as many companies involved in Iran’s energy sector.

The GAO doesn’t say whether the companies are violating U.S. law but it’s obvious that, to date, we’ve been spectacularly unsuccessful in squeezing Iran. (“The report is likely to add fuel to arguments made by congressional critics that the U.S. isn’t doing enough to punish companies doing business with Tehran.”) Will new international sanctions be any more successful in isolating the regime? Highly unlikely, especially since the most exacting (e.g., restricting sales of refined petroleum) ones are not even under consideration.

Then the Washington Post helpfully assists the administration in laying the groundwork for containment:

After months of first attempting to engage Iran and then wooing Russia and China to support new sanctions against the Islamic republic, the Obama administration appears within reach of winning a modest tightening of U.N. measures targeting Tehran. But administration officials acknowledge that even what they call “crippling” sanctions could prove ineffective in keeping Iran from developing nuclear weapons.

That stalemate, in the view of many analysts, means that a strategy of containing Iran is inevitable — diplomatic isolation backed by defense systems supplied to Persian Gulf allies.

The reporter then dutifully lines up a whole slew of containment advocates, with one lonely note of criticism from the other side. (“So far, said Ray Takeyh of the Council on Foreign Relations, the pressure has ‘cost the Iranian economy but not affected Iranian decision-making.’ But he warned that containment will be ‘hard and difficult and may require the use of force to enforce red lines.’” Translation: it won’t work.)

But, but, but . . . Obama said a nuclear-armed Iran would be unacceptable. How could this be that we’re now throwing our hands in the air? Ah, those who took Obama literally — assuming Obama meant that we would not accept an nuclear-armed Iran — missed the “nuance.” Unacceptable plainly doesn’t mean unacceptable. You see, it’s the only option now — the gurus tell us:

Shahram Chubin, director of research at the Geneva Center for Security Policy, said the accumulation of sanctions is “exacting a price on the Iranians, but it is not going to change its policies.” Iran may make what he called “tactical overtures” — such as indicating renewed interest in a proposed swap of nuclear material desperately needed for a medical research reactor in Tehran. But such overtures would not indicate a shift in its intention to acquire nuclear expertise, he said.

Chubin said the United States and its allies are gambling on the unexpected occurring. “We are trying to buy time so something can happen. But what could that something be?” he said. “One should do as much as you can do to prevent Iran from getting a nuclear weapon. But at the end of the day, this may well be the case that whatever you do makes it worse.”

For months, many of us have been predicting that this is precisely where the administration is heading. They never had a Plan B to engagement — at least not a viable one. Now, the Congress, the American people, Israel, and its supporters will have to decide how to respond to this outrageous abdication of American responsibility.

Two reports today strengthen the argument of those who suspect that sanctions on Iran are too little, too late, and that they are simply another stall for the Obami –  who are slow-walking toward containment. First, we learn that foreign investors are continuing to bolster the Iranian economy:

Forty-one foreign companies had some form of commercial activity in Iran’s energy sector over the past five years, despite American laws that could prompt U.S. sanctions against such firms, according to U.S. government auditors.

The report, to be released Thursday by the Government Accountability Office, found that some of the companies are headquartered in some of the U.S.’s closest allies, including Japan and South Korea. A similar GAO study conducted three years ago found half as many companies involved in Iran’s energy sector.

The GAO doesn’t say whether the companies are violating U.S. law but it’s obvious that, to date, we’ve been spectacularly unsuccessful in squeezing Iran. (“The report is likely to add fuel to arguments made by congressional critics that the U.S. isn’t doing enough to punish companies doing business with Tehran.”) Will new international sanctions be any more successful in isolating the regime? Highly unlikely, especially since the most exacting (e.g., restricting sales of refined petroleum) ones are not even under consideration.

Then the Washington Post helpfully assists the administration in laying the groundwork for containment:

After months of first attempting to engage Iran and then wooing Russia and China to support new sanctions against the Islamic republic, the Obama administration appears within reach of winning a modest tightening of U.N. measures targeting Tehran. But administration officials acknowledge that even what they call “crippling” sanctions could prove ineffective in keeping Iran from developing nuclear weapons.

That stalemate, in the view of many analysts, means that a strategy of containing Iran is inevitable — diplomatic isolation backed by defense systems supplied to Persian Gulf allies.

The reporter then dutifully lines up a whole slew of containment advocates, with one lonely note of criticism from the other side. (“So far, said Ray Takeyh of the Council on Foreign Relations, the pressure has ‘cost the Iranian economy but not affected Iranian decision-making.’ But he warned that containment will be ‘hard and difficult and may require the use of force to enforce red lines.’” Translation: it won’t work.)

But, but, but . . . Obama said a nuclear-armed Iran would be unacceptable. How could this be that we’re now throwing our hands in the air? Ah, those who took Obama literally — assuming Obama meant that we would not accept an nuclear-armed Iran — missed the “nuance.” Unacceptable plainly doesn’t mean unacceptable. You see, it’s the only option now — the gurus tell us:

Shahram Chubin, director of research at the Geneva Center for Security Policy, said the accumulation of sanctions is “exacting a price on the Iranians, but it is not going to change its policies.” Iran may make what he called “tactical overtures” — such as indicating renewed interest in a proposed swap of nuclear material desperately needed for a medical research reactor in Tehran. But such overtures would not indicate a shift in its intention to acquire nuclear expertise, he said.

Chubin said the United States and its allies are gambling on the unexpected occurring. “We are trying to buy time so something can happen. But what could that something be?” he said. “One should do as much as you can do to prevent Iran from getting a nuclear weapon. But at the end of the day, this may well be the case that whatever you do makes it worse.”

For months, many of us have been predicting that this is precisely where the administration is heading. They never had a Plan B to engagement — at least not a viable one. Now, the Congress, the American people, Israel, and its supporters will have to decide how to respond to this outrageous abdication of American responsibility.

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