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Stimulus Spending Puts High-Speed Rail on Fast Track

From the speaker's podium in Congress to the train platform.

President Obama's first appearance after the State of the Union address is in Tampa, Fla. on Thursday where he is expected to announce $8 billion worth of grants for high speed rail projects in the United States.

Stimulus Scorecard
Stimulus Scorecard

More than a dozen projects will receive funds, spanning 31 states, but the biggest winners look to be Florida, Illinois and California. See details of all the projects here.

Combined, all three states will be awarded more than half of the $8 billion with California getting the biggest chunk: $2.3 billion.

The initial California proposal asked for $4.7 billion in order to establish sections of what will eventually become a high-speed line connecting Anaheim to San Francisco in an eye-popping two hours and forty minutes.

"(It is) something that would be much more convenient than taking a plane, and certainly much easier in time and fatigue than driving," Anaheim Mayor Curt Pringle told CNBC.

"That train will emit less because it's fully electrifiied. It has a much more positive effect on the environment than cars and airplanes do," said Pringle who doubles as the Chairman of the California High-Speed Rail Authority. "We're not looking at how we're addressing the needs of today. We're looking at how we're addressing the needs of tomorrow."

He added that this is an example of government showing foresight.

"Very seldom does government look and focus on the future," he said, also poining out that the state of California will match the federal investment, dollar for dollar.

The specific focus of the major initiatives will be inter-city connections that range between 100-600 miles.

But it must be pointed out that California is the only proposal that resembles global definitions of high-speed rail. The Anaheim-San Francisco line—which projects a total cost of $42 billion— could see speeds of 200-miles per hour. But we won't be seeing bullet trains littering the countryside. Some of the trains project speeds upward of 110-miles per hour, while others will struggle to get above 80.

For perspective, Japan has had high-speed rail, with speeds over 200-miles per hour, since the 1960's. England got up to speed seven years ago, and even China implemented the technologies in 2007, investing about $50-billion.

Only Amtrak's Acela line in the Northeast comes close to being considered high speed. It has top speeds well over 100-miles per hour but nowhere near 200.

Beyond the $8 billion from the Recovery Act, high-speed rail is in the federal budget for $1 billion a year over the next five years, although not all of the $8 billion will go explicitly to high-speed rail. For example, reports out of Oregon are that Portland will receive several million dollars to repair the roof to its main station.

President Obama and Vice President Joe Biden are expected to tout job creation at the town hall meeting in Florida, but the administration is taking the message all across the country. Several cabinet members will appear at rail events nationwide on Thursday and Friday. Read the DOT's rail plan here.

A few hours after the President's announcement in Florida, Transportation Secretary Ray LaHood will be in California, joined by both of the state's Senators.

Jobs will be the focus of the speeches, but in California, they might not come as quickly as people think.

"The bulk of the money would start to be spent on construction in 2012," said Curt Pringle, Chairman of the California High-Speed Rail Authority.

The other dynamic is which companies are prepared to help build the trains and the infrastructure. The White House acknowledges that many of the companies best positioned to help are not U.S.-based. To that end, several companies are working to establish a presence in the U.S. to qualify to get this business.

They range from France's Alstom, Spain's CAF to several companies in Asia. General Electric is also expected to be involved, as is Canada's Bombardier.

Be sure to get in touch with us: stimulus@cnbc.com

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