RSS 2.0 FeedAmtrak: An Idea Whose Time Has Passed
by Doug MataconisSince 1970, the business of intercity and interstate rail passenger service has essentially been nationalized. In that year, Congress created the National Railroad Passenger Corporation, known more popularly as Amtrak.
Not surprisingly, the history of the American passenger rail system since then has been little more than a disaster. Without the federal subsidies that it depends upon, Amtrak would not have survived the past 37 years. And, yet, for the most part, Americans have abandoned train travel for less expensive, and quite honestly more pleasant methods of travel.
Despite that fact, the government continues its inane efforts to get us all on the train:
Sens. Frank Lautenberg (D-N.J.) and Trent Lott (R-Miss.) introduced legislation yesterday that would authorize $3.2 billion a year for Amtrak over six years in exchange for greater efficiency and increased investments by states.
Supporters said the plan would place Amtrak on a firm financial footing after years of instability.
A similar bill was passed by the Senate in November, 93 to 6, but was not taken up by the House of Representatives. Lautenberg said prospects were much improved with Democrats now in control of both houses of Congress.
“It’s not going to be that difficult this year,” Lautenberg said yesterday at a news conference at Union Station, where he was joined by Lott and Alexander K. Kummant, Amtrak’s chief executive.
Amtrak, the main operator of passenger trains in the country, has been beset with money-losing routes, hobbled by technical troubles, criticized for mismanagement and crippled by a lack of capital investment. Conservatives especially have questioned whether large operating subsidies for Amtrak are a wise investment.
Amtrak received $1.3 billion in federal funding last fiscal year.
And yet, here we are a year later, Amtrak is again a financial failure, and the only solution that anyone can come up with is to throw more money at it.
Yea, makes sense to me.
Here we go again. Every time someone does a positive piece, (or a piece describing issues that should be resolved), on Amtrak the usual ‘Amtrak subsidy’ nonsense starts up.
Every mode of transportation in this country and in fact just about every country on the planet is subsidized to some extent. It is difficult to compare Amtrak to other modes because of its unique circumstances but allow me to make a few quick points.
Yes its true: “In fiscal year 2005, Amtrak had revenues of $1.89 billion but expenses of $2.94 billion, requiring a $1.2 billion taxpayer subsidy from the U.S. government.” That amount is about the equivalent of ONE space shuttle flight. It is also approximately the cost of ONE B2 Stealth Bomber. It is the cost of about 7 days of operations in Iraq. In other words- the United States CAN afford it.
System-wide the Amtrak ‘Subsidy’ is about 50 dollars per passenger.
According to a variety of published sources, airline debt in the United States has risen significantly, with some estimates placing it as high as $100 billion. From 2001 through 2005, the U.S. airline industry reported total net losses of approximately $42.3 billion for the five-year period. In response to the industry’s financial condition right after the September 11, 2001 terrorist attack, Congress either provided or made available several forms of financial relief amounting to well over $20 billion. Otherwise, the losses for this period would have exceeded $62 billion. This ‘subsidy’ was in addition to other annual federal, state and local subsidies to the airline industry for operation and maintenance of the air traffic control system, airport security, airline terminals, airport runways and facilities and access roads and public transportation to airports.
Despite all the money invested in all airlines and related infrastructure, the net profit of the airline industry in its 78-year history is less than zero. It is substantially less than zero when the government’s research and development of aircraft and avionics technology is taken into consideration.
How much are the taxpayers paying for the Federal TSA security workers now? I don’t know but I’ll bet it isn’t cheap.
Amtrak carries about 25 million people per year, (about half of those are in the northeast). American Airlines, (the largest airline), carries about 90 million people per year world-wide. Amtrak, a ramshackle of a railroad, actually carries ONE QUARTER the passengers that the world’s largest airline carries. That statement alone justifies the ‘subsidy’.
Amtrak workers are paid considerably less than their freight-railroad counterparts. In fact many have continued to work on expired contracts, knowing full well that if they strike they will likely lose their jobs.
Could Amtrak be better than what it is? Of course, there is always room for improvement. Amtrak is an anomaly in our so called ‘free market’ economy so there is no easy solution. What I cannot stand is people going on about what a waste of money it is then fail to appreciate how much the Airlines and our interstate highways rely on taxes, (subsidies), to exist.
We don’t get to chose where our tax dollars go. I live near a large city so all transportation options are available to me and I chose Amtrak, (not the airlines), whenever and wherever I can, as an American I should have that choice.
Comment by Mark Blanek — January 16, 2007 @ 9:33 pmSincerely,
Mark
Mark -
Just because this one piece focuses solely on Amtrak, to the exclusion of other subsidies, does not imply that the author (or any other contributors to this site) support them. It means that the piece was focused on Amtrak.
Also, you say:
We don’t get to chose where our tax dollars go.
I’m afraid that, in reality, we often don’t. However, by design, we should, which is one of the reasons we elect representatives and one of the reasons this blog exists.
Comment by Quincy — January 16, 2007 @ 9:39 pmMark,
I am not stopping you from forming your own private passenger railroad company and riding on your own private train if you want. What you do not have the right to do is force American taxpayers to pay for your preferred method of travel because your preferred method of travel is profitable in the free market.
Comment by Kevin — January 16, 2007 @ 9:43 pmYou can have all the choice you want; but I as an American should not have to pay for you to have that choice.
If Amtrak can offer a viable, profit making passenger service, they should (and will) do so. If they cannot they should not.
It’s such a simple concept I have a hard time understanding why so few others do.
There will be no strategic loss, or significant loss of passenger choice in those markets where customers actually choose to use the trains, such as metropolitcan commuter rail, and the northeast corridor; because those routes are viable and profitable. However, the airlines are able to provide long distance passenger service faster, cheaper, and better than rail service, and still make money at it where the rail service cannot; and long distance passenger rail should be allowed to fail because of it.
Maybe something better will arise out of that failure, or someone will devise a way to make it viable; but so long as the government artifically supports a failing enterprise, no better competitor will arise.
If no competition or replacement presents itself, it is because that service was not needed, or wanted, in the marketplace; and that’s the way the world works.
Comment by Chris Byrne — January 17, 2007 @ 10:02 amGuys:
Did any of you actually read what I wrote? Amtrak is flawed, that is true but so are all other methods of transportation- financially speaking.
Quincy: Sure, it was aimed solely at Amtrak. Now how about some research into other modes of transportation and see what they REALLY cost. As for elected officials: The folks who have been trying to get rid of Amtrak are the same guys who got us into Iraq with foolish, narrow-minded thinking. Transportation in the US needs to be a three legged stool: Air-Rail-Road. Without one leg the stool WILL fall over.
Kevin and Chris: I AM paying for your airline tickets, its only fair you pay for my train travel, (the difference is you pay about a penny each of your taxes for Amtrak and I pay about a dollar to subsidize the airlines).
Gentlemen stop kidding yourselves. The airlines don’t really make money, (see my first). Add in the cost of the Air Traffic Controllers, the TSA security, the runways and the airports themselves and your $99 trip to Vegas just went up to about $990. The airlines are constantly flirting with fiancial disaster. They only have to worry about planes, fuel and employees. That’s it! The point you guys are failing to see is that ALL transportation modes ARE subsidized, most is hidden, Amtrak’s is not. It took only 12 people to ground our entire air network on 9/11, (one leg of the ’stool’). Amtrak trains were running and I was aboard one on 9/14 while the airlines sat on their hands. Recently a snowstorm took out all flights in and out of Denver for three days while Amtrak continued to roll.
I really don’t have a problem with subsidizing TRAVEL, (all of it), in the United States. The airlines get theirs and Amtrak should as well. We need a BALANCED transportation system, one that compliments all modes of travel to all people and gentlemen that costs tax money, like it or not.
Mark
Comment by Mark — January 17, 2007 @ 11:12 pm>>And, yet, for the most part, Americans have abandoned train travel for less expensive, and quite honestly more pleasant methods of travel.
Comment by David Cline — January 18, 2007 @ 3:47 pmThat is nothing more than a matter of opinion – in which you may well be in the minority. You prefer air or road travel. Fine, but what about the millions of us who would rather go some other way – including rail. All modes are subsidized anyway – so exactly why is that OK for your preferred air and roads but unacceptable for the railroad?
While you may find air or automobile travel more pleasant, you cannot arbitrarily decide that for anyone else. Do you seriously enjoy arriving two hours before a flight, removing your shoes, and having to trash your toothpaste all in the name of security, when you could just show up at the train station and climb aboard? Or perhaps you prefer the bag of peanuts the airlines serve to the full meals Amtrak serves on real china aboard the Empire Builder. Or maybe air travel is more pleasant because of the child-sized seats found on most aircraft, as opposed to Amtrak’s wider seats and private roomettes and bedrooms.
Oh, and while you sit stuck in traffic everyday on a congested road, look over at the train passing you as if you were standing still – wait, you ARE standing still. You see, people who would never carpool or take a bus will choose to leave the car at home for a seat on the train. You don’t have to join them, but every driver who takes the train reduces congestion on the roads you take to work – so we both win.
Comment by David Cline — January 18, 2007 @ 3:48 pm“Transportation in the US needs to be a three legged stool: Air-Rail-Road”
Why? I can’t accept that tax money needs to be spent on achieving this goal until I know why this goal is so important that it must occur through government intervention.
Comment by Quincy — January 18, 2007 @ 11:05 pmDavid –
Most of us on this site oppose the subsidies to air and auto travel, as well. The real fact of the matter is that transportation is so distorted by subsidies that real competitiveness of one mode of transportation can’t be determined.
Here in the SF Bay Area, in the 30s and 40s, there was a large and vibrant rail system. In the 50s, the local governments decided that buses were better, and used subsidies for those to wipe out every railway except the SF Municipal Railway (aka MUNI). Even in the 50s, the golden age of the auto, the rail systems were popular with riders until government made it a “better deal” to ride the bus.
Now, many communities that had rail before, including my own, are looking back to it as a solution. The problem is, in the intervening decades, the entire area has become car-centered. Not only have people’s preferences changed, the very landscape did. One decision by government about what was “better” led to almost total dependence on the automobile.
Now, local governments are making the decision that rail is “better” and trying to wedge it into communities where it doesn’t fit. It’s the same damnable process, just going in a different direction.
Centralized planners deciding what is “good” is not going to create a robust transportation system. They don’t have the brainpower to do so, no small group of individuals does. Individuals looking out for their own self interest will, as proven by the success of rail in the NY-DC corridor, where it really IS the best option. In short, let the market work.
Comment by Quincy — January 18, 2007 @ 11:18 pm