Cuomo Wants to Privatize Penn Station; That’s a Bad Republican Idea

Richard Eskow

New Yorkers face a “summer of hell”  as Governors Andrew Cuomo and Chris Christie seek to hand over the city’s historic Penn Station to private investors. This “hell” is the result of our leaders’ “bipartisan” reluctance to invest in needed government infrastructure.

Donald Trump is working with his fellow Republicans in Congress to enact a “privatization” program that could become the largest giveaway of public resources to private corporations in our nation’s history. (See Part 1 of this privatization series.)

Why wouldn’t they? Republicans claim to hate “big” government, and privatization – the dismantling of government and giveaway of publicly owned resources to corporate interests – has been a core part of the Republican agenda for years.  Unfortunately, a number of corporate-friendly Democrats have also embraced the idea.

New York Penn Station. Photo credit: Wikimedia Commons

The latest Democratic politician to embrace privatization is New York’s Cuomo. Cuomo recently introduced a joint proposal with his Republican counterpart in New Jersey, the scandal-plagued Christie, to privatize Penn Station.

In a joint letter, the two governors have asked that the station be taken away from Amtrak and given to private investors or corporate interests. They wrote:

“As Amtrak’s management of Penn Station continues to produce multiple failures, we believe systematic changes cannot wait. A professional, qualified private station operator must be brought in to take over the repairs and manage this entire operation going forward.”

Cuomo also made his case to Donald Trump.  “”I know that you believe in privatization where appropriate,” Cuomo wrote to Trump, “and in this situation I think there is no doubt that it is appropriate.”

The Real Story

Unfortunately, Cuomo and Christie are giving the public a misleading impression by leaving out an important part of the story.  Republicans have been cutting Amtrak’s budget since the George W. Bush administration, without regard for public need or public safety.

Congress passed a $242 million budget cut in 2015 just days after a deadly crash capped a year-long series of lethal train accidents, many of could be tied to decaying railroad infrastructure. Trump’s budget proposal includes additional deep slashes to the railroad’s finances.

This is how privatization advocates work: First they cut funding for vital government programs. Then they issue a complaint like the one in the letter written by Cuomo and Christie: “…Amtrak’s management of Penn Station continues to produce multiple failures.”

It would be more accurate to blame those failures on unexpected surges in ridership over recent decades, and a failure to budget appropriately for increased demand.

“The Governor of Wall Street”

In demonizing a government program, Cuomo is betraying his party’s New Deal tradition. Progressives should stand in opposition to the budget cuts that lead to “multiple failures.” These cost jobs, reduce access to affordable transportation and put passengers at risk. Instead, Cuomo – who is positioning himself as a leader of the “Resistance” – has joined the Republican chorus of attacks on an important government institution, and on the capabilities of government itself.

It shouldn’t be surprising that Cuomo is cozying up to Trump and the Republicans on this critical issue. Cuomo, who has been called “the Governor of Wall Street,” is reportedly close to Wall Street billionaire John Mack. “I think the governor’s already plugged into Wall Street,” Mack told a reporter in 2014. “He knows all the C.E.O.s, he knows most of the chairmen of each board …”

Cuomo also appointed real-estate mogul Steve Roth to an advisory panel charged with overseeing Penn Station’s privatization. As David Sirota reports, Roth and his wife donated $95,000 to Cuomo’s campaign, several months after Roth’s firm Vornado was one of three firms chosen to “a new 255,000 square foot Train Hall to house passenger facilities for the Long Island Rail Road and Amtrak,” as a Cuomo press release put it.

Clinton’s Privatization Call

In pushing for privatization, Cuomo is following in a centrist/corporate Democratic tradition that dates back to Bill Clinton’s ascendancy to party leadership.  In his 1992 acceptance speech for the party’s presidential nomination, Clinton broke with his party’s New Deal tradition when he said that “big bureaucracies, both private and public (have) failed too.”

Clinton added:

“That’s why we need a new approach to government … More choices for young people in the schools they attend … And more choices for the elderly and for people with disabilities and the long-term care they receive. A government that is leaner, not meaner; a government that expands opportunity, not bureaucracy; a government that understands that jobs must come from growth in a vibrant and vital system of free enterprise.”

At a minimum, Clinton was calling for the partial privatization of both Social Security, which serves the elderly and disabled, and children, through a system of charter schools and vouchers. He was suggesting that both Medicare and Social Security are run by “failed bureaucracies.”

Talk Into Action

Clinton signed the Federal Activities Inventory Reform (FAIR) Act of 1998, which the nonpartisan magazine Government Executive accurately characterized as a “privatization bill.” Under the FAIR Act, federal agencies must list their activities every year and say whether they are “inherently governmental” or could be performed by a private company.

According to many reports, Clinton also tried to follow through on his acceptance speech by cutting a deal with House Speaker Newt Gingrich that would have cut Social Security by raising the retirement age and partially privatized the program through a system of private retirement accounts.

As US News and World Report notes, “Clinton realized that he could not undertake this without bipartisan support, and, Chief of Staff Erskine Bowles reflected, ‘He knew to do this he needed to work with Gingrich.’”

As US News reports, Clinton knew the plan would be “controversial” and was willing to take the “political heat” in return for a deal with Gingrich.

A Private Party

Clinton’s deal with Gingrich died with the Monica Lewinsky scandal, but the centrist Democratic zeal for “bipartisan” privatization did not. Barack Obama appointed Bowles, who served as an intermediary with Gingrich on the Social Security deal, to co-chair a commission tasked with reducing the federal deficit and cutting Social Security. (The two tasks are separate from one another, since Social Security is required by law to be self-supporting. It cannot contribute to the federal deficit.)

In announcing his privatization scheme with Cuomo, Christie warned that Penn Station’s commuters are about to enter a “summer of hell.” They almost certainly are, thanks to our leaders’ “bipartisan” reluctance to invest in needed government infrastructure.

The Democratic infatuation with privatization hurts the party, harms the public interest, and diminishes the public’s understanding of government’s vital role in American life. It must be resisted by independent activists and progressive Democrats alike.

It would be tragic if a “summer of hell” for New York commuters led to a lifetime of servitude to corporate interests. It would be even worse if Democrats like Andrew Cuomo helped make it happen.

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