Trading The Rail Funding Plan (CAT, GWR, CSX, UNP, RA)
According to the Wall Street Journal, Vice President Joe Biden will announce a new $53 billion plan to upgrade the passenger rail networks in the country.
Alongside Vice President Biden will be Transportation Secretary Ray LaHood. The two of them will announce the plan at Philadelphia's 30th Street Station. The program is designed to be completed in six years, and will give 80% of the country access to trains, as President Obama mentioned in his State of the Union Address.
The administration has already devoted $10.5 billion to passenger-rail programs, with the bulk of the funds going toward California and Florida.
As part of this year's budget, the Obama administration has set aside $8 billion for passenger-rail projects.
What's not known at this point is how the rest of it will be paid for, and whether Congress will support it. Biden, who frequently uses Amtrak between his home in Delaware and Washington, says that the economy needs it to boost job growth, as well as the return of skilled manufacturing jobs.
Companies like CSX (NYSE: CSX), Union Pacific (NYSE: UNP), Genessee & Wyoming (NYSE: GWR), and RailAmerica (NYSE: RA) will benefit on increased spending in the sector, and Caterpillar's (NYSE: CAT) rail car unit should benefit from increased business, as it makes parts for the rail car industry.
Disclosure: no position in names mentioned
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