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This Train Is Really Defying Gravity


If Senate Democratic Leader Harry Reid has his way, someday a superfast hovering train will whisk tourists from family-friendly Disneyland to the what-happens-here-stays-here city, Las Vegas. But so far, the Nevada senator's fascination with magnetic levitation -- the futuristic technology that would power the train across the desert at 300 mph -- has managed only to levitate a steady stream of money out of the federal budget: $54 million and counting.

Few others are climbing aboard. The Transportation Dept. rejects MagLev for its steep price tag, which a 2005 study says eclipses the cost of current high-speed rail by "fourfold to ninefold." Even Nevada's other senator, Republican John Ensign, questions the value of spending an estimated $12 billion or more on a 269-mile Anaheim-to-Vegas train line.

But Reid has pressed ahead, earmarking $9 million between 2000 and 2004 and winning a $45 million authorization in last year's federal transportation bill. It's just one small example of how congressional leaders can keep projects alive and how difficult it will be for reformers to stamp out earmarks -- the hidden pots of cash that lawmakers tuck into spending bills for favorite projects or constituents.

MagLev, which uses the attraction and repulsion of powerful magnets to power a train hovering inches off the track, enjoyed a brief burst of federal support in the 1990s. Clintonites praised it as a new and efficient option for short-range travel. But since 2001 the Bush Administration has not sought funding for MagLev projects. "The Administration believes that the money could be better spent on other transportation needs," says Steven Kulm, a Federal Railroad Administration spokesman.

But with Reid's help, MagLev boosters have kept hope alive. So far, they've spent $7 million on preconstruction engineering studies, and they're pushing for Congress to appropriate the $45 million it O.K.'d last year. The California-Nevada Super Speed Train Commission wants to leverage federal dollars with tax-exempt bonds and private equity. It has partnered with American Magline Group, many of whose corporate members -- General Atomics, Hirschfeld Steel, and Parsons Transportation Group, among others -- would help build the high-speed train.

Backers argue that the project is crucial for the future of transportation. "I don't know if anyone accused President Eisenhower of pork when he created the interstate highway system," says Neil Cummings, president of American Magline. Jim Manley, a spokesman for Reid, says a high-speed train would ease congestion at Las Vegas McCarran International Airport. "It's a good project," says Manley.

Nonsense, says Keith Ashdown, vice-president of Taxpayers for Common Sense, a group that tries to limit federal spending. MagLev is "a train to nowhere," says Ashdown. "We're wasting tens of millions of dollars on a project that nobody believes will be built except Harry Reid."

But Reid's faith in MagLev has been a plus for him: Companies and individuals tied to the project have given him $28,749 in campaign funds since 1999, according to the Center for Responsive Politics. And with Ensign facing his first reelection campaign, MagLev fans are opening their checkbooks for him, to the tune of $23,248. For now, MagLev keeps hovering along.

How could embattled housing finance giant Fannie Mae (FNM) hide more than $11 billion in losses under the watch of federal regulators? At the peak of its power, Fannie used lobbyists to bludgeon critics and head off close scrutiny. When the Office of Federal Housing Enterprise Oversight ramped up its oversight of Fannie, the lobbyists persuaded lawmakers to request six separate investigations into the agency. In one, Senator Christopher Bond (R-Mo.) directed the inspector general of the Housing & Urban Development Dept. to see whether OFHEO's investigators unfairly targeted Fannie. No charges resulted. In a report due out in late April, OFHEO will blast Fannie's board, saying directors knew more about Fannie's bad books than previous investigations recognized, including the board-sponsored exam by former Senator Warren Rudman.

Washington isn't the only lobbying battleground for hard-pressed drugmakers. Big Pharma spent more than $44 million lobbying against state legislation and initiatives to limit the price of prescriptions in 2003 and 2004, according to the Center for Public Integrity, which tracks political spending. State health programs, including Medicaid, fund about 16% of U.S. drug purchases, the group says. Its study also found more than $8 million in industry giving to state politicians. A spokesman for the Pharmaceutical Research & Manufacturers of America says the group tries to "educate" states "on the unintended consequences of ill-advised proposals."


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