There is a special event coming down the tracks tomorrow — National Train Day. It’s likely few Americans, other than Amtrak enthusiast Vice President Joe Biden, put this date on their calendars. Amtrak, which created the holiday in 2008, will be using this day to kick off its year-long 40th-anniversary celebration. Supporters of Amtrak’s sister endeavor, high-speed rail, will also use the day to push for more funding.
Given America’s soft spot for trains — Thomas the Tank Engine and The Little Engine That Could are still popular among children — lawmakers are likely to be running to the nearest station for a photo op with those shiny engine cars. But instead of celebrating Amtrak’s anniversary, they should shine a light on the company’s financial failures and take its difficulties under advisement when considering costly new investments in high-speed rail.
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When Congress created it in 1970, Amtrak was intended to be a profitable enterprise; instead, it has cost taxpayers a total of $40 billion. According to a 2009 study by the Pew Charitable Trust, 41 of Amtrak’s 44 lines lost money in 2008. Per-passenger losses ranged from $5 per passenger on the Northeast Regional to $462 on the Sunset Limited line, which runs all the way from New Orleans to Los Angeles. According to the Amtrak inspector general’s September 2010 semiannual report, the rail service covered only about 84 percent of its operating costs in fiscal year 2010.
Of course, Amtrak could save tax dollars by cutting its less profitable lines, but the anniversary-celebration lineup makes it clear that this engine of wasteful spending is accelerating. According to Amtrak’s Facebook page, the rail service will introduce four new P-42 diesel-electric trains, each with a “historic paint scheme,” and a separate “exhibit train” that will travel through the country for a year carrying educational exhibits; publish a book called “Amtrak: An American Story”; release a DVD on its history; and launch an anniversary website. In addition, Gladys Knight is acting as National Train Day spokesperson.
Defenders of Amtrak — and of high-speed rail — argue that most of the nation’s transportation industry is subsidized. Amtrak’s subsidy, however, is by far the most generous. According to a 2009 study by the Heritage Foundation, Amtrak subsidies totaled $237.53 per 1,000 passenger-miles. In contrast, the subsidy for commercial aviation was $4.23. These subsidies don’t make train travel more affordable. Randal O’Toole of the Cato Institute notes a one-way ticket between Washington, D.C., and New York City on Amtrak’s high-speed Acela costs $139, while bus service costs less than $15.
Taxpayers understand that if the government can’t turn a profit on lower-cost, low-speed rail (Amtrak), it will never earn a dime on higher-cost, high-speed rail. That’s why some governors, including Florida’s Rick Scott (R) and Ohio’s John Kasich (R), have said “No, thank you” to high-speed-rail funding that would put state taxpayers on the hook for years to come.
In preparation for a possible government shutdown in April, Amtrak president Joe Boardman instructed workers not to worry, because the company could still rely on ticket revenues to operate. That is, if Amtrak had to live without taxpayer subsidies, it would remain in business. The only difference is that it would be forced — like any other business — to cut unprofitable ventures and to meet its bottom line. Since, according to the Heritage Foundation, Amtrak accounts for 0.5 percent of all interstate passenger travel, and 40 percent of that travel occurs in the Northeast Corridor, it is unlikely most Americans would even notice such a change in service.
Across the country, many businesses, including other transportation services, have found ways to improve their bottom lines. Amtrak won’t be forced to make those types of decisions until taxpayer support is derailed. It is time for Congress to end Amtrak subsidies, consider the costly lessons learned, and apply them to the debate over high-speed rail.”
— Tom Schatz is president of Citizens Against Government Waste, a national nonprofit devoted to eliminating waste, mismanagement, and inefficiency in the federal government.
Last time I checked, the Acela high speed rail (HSR) line was one of the few profitable Amtrak lines.
Don't get me wrong, I love the freedom of driving my family in my own car. However, for a few regions in the US, HSR makes a lot of sense. When I need to get to Boston from NYC, I take the Acela and it is a decent value.
I am not that impressed with the figure "40 billion in 40 years" since that amounts to .3% of the debt and about .07% of our current deficit. However, we clearly don't have the extra money right now for new shiny rail lines.
I think it would make sense to cap the government subsidy per passenger mile for any given line, and then let Amtrak shut down the egregious offenders, such as the NOLA->LA line.
The annual debate over government support of Amtrak needs a serious airing --not the usual lobbing of pro- and con- statistics. Should the feds encourage and subsidize interstate transportation and travel or not? If not, then let the goose and the gander stew in the same sauce! Why should the airlines, the barges and the truckers enjoy government support while the freight railroads go it on their own?
Twenty-eight million passengers rode Amtrak last year --there will be more this year as gasoline prices soar. Should these people stay home? Or ride the bus on a subsidized highway?
Sure. I'll support the dissolving of Amtrak --when federal subsidies to the other carriers are dissolved too!
GNRHS1
I use Amtrak a lot and I am amazed at how modest the deficits are considering how dirt cheap my Amtrak tickets are.
I would have no problem paying higher ticket prices for Amtrak if it helps get rid of the deficit.
The Amtrak trip I took last week was about $32 each way or a 4 hour one way train trip, I actually spent more on the taxi to my hotel and back than I did for my Amtrak fare.
For 40 years, Congressional politics have mandated that Amtrak maintain service along unprofitable routes while providing insufficient funding to upgrade performance.
It is time for the broader American Business Community to step forward and chastise the GOP for its shortsighted kowtowing to the Oil, Highway and Airline lobbies.
To be competitive in the 21st Century, America's business community needs energy efficient commuter passenger rail service in our nation's more heavily traveled regional corridors.
The GOP needs to remove their heads from their collective rumps and understand that means a lot more than just the NE Corridor.
I'd be a lot more impressed by the Acela if it was a "high speed" line. I can drive from DC to NYC in 4 hours or less and even with parking, tolls and gas it's far cheaper. If I take the bus I get wi-fi and pay $40. Acela is at best 75-80 mph, and $200+ for a RT ticket, ridiculous!
That said, why are we still running a national passenger rail line? Sell it and someone will make it work or we'll get to the truth - Passenger rail is great in little countries like Germany and the UK or big screwed up places like India and Russia where freedom and economic opportunity don't really exist. It's a loser here.
It's very sad to see the National Review quoting the utterly discredited Randall O Toole on Amtrak. As usual he uses ludicrous distortions to try to justify his preconceptions.
The New York-Washington bus fare is NOT $13. A tiny handful of seats are sold on-line for such a fare. Greyhounds current rate is $37--a bargain indeed, but also for slower service in cramped conditions.
It is a particular reach for O'Toole to attack the premium ACELA EXPRESS service, since it is significantly profitable and therefore helps to offset any other losses on other Amtrak routes. But of course fairness is not O'Toole's point.
In the Darwinian Libertarian world in which O'Toole resides it is apparently ok to "invest" in highways, but not to "subsidize" Amtrak. Disregarding the fact that the highways are largely supported by the gas tax (yes a tax) in-fact over a third of US highway spending does not come from gas taxes, but rather from other tax sources.
When did O'Toole last get a dividend check from I95?
The sad fantasy that Amtrak's Acela service is "profitable" is laughable. Acela survives only because Amtrak management provides it a subsidy of about a half billion dollars a year (from money provided free by Congress). Amtrak obscures what it is doing by calling the Acela subsidy a "capital" item, because most of it is sunk into Northeast Corridor (NEC) track and facility maintenance, and subsidy for the huge costs of keeping up the huge stations that Acela uses along the NEC. None of those "capital" costs are charged against Acela's revenues on the NEC's Profit and Loss statements. Imagine a bankrupt airline claiming it was "profitable" ... so long as it didn't have to include its landing fees, gate rentals, and heavy equipment maintenance costs. That's what Acela "profits" amount to.
Acela cost $3 billion to start up and has incurred another $5 billion in hidden subsidies in the decade since. It is the biggest loser in the entire Amtrak network.
Worse, Acela has only a 50% load factor (and outside the 90-mile Philadelphia-NY commuter corridor, Acela's load factor is under 30%). And its market share is under 1%.
Amtrak's obsession with "high speed rail" (read: high COST rail) is what is discrediting rail service altogether.
What the libertarians miss in the whole rail debate in the first place is consumer choice. Consumers like having a rail alternative, especially in longer distance markets, and are happy to have their taxes help provide it. Western transcontinental trains are nearly sold out--with load factors nearly double those of the short corridors (including the NEC).
The difference is in the abuse and misuse of public capital by Amtrak. They keep squandering it on low-return, high cost boondoggles like Acela, rather than the high revenue, high-output longer distance services they also offer, and consumers buy every bit of that Amtrak offers.
Good points but realize everyone in the nation benefits from the highway system. Even if you don’t own a car, every product you purchase likely has traveled on highways.
There is no comparable national benefit from Amtrak.
What was not told to you, the "Sunset Limited" has high losses because it only runs three days aweek! It has seven days of fixed expenses like employees and stations, etc. But three days of income! This is very misleading. Add on allocated Northeast Corridor expenses and you get a big losser. I also find it interesting to talk about the bus industry. That not only uses public highways, but public bus stations and in someplaces Amtrak stations!Many states like New Jersey buy buses for them, then lease the bus to them for next to nothing. Then pay the company to operate them! On public highways to public terminals, or even Amtrak stations. Such a deal! We won't talk about grants to operate fixed route services over the public highways. If the 40 billion were spent in the beginning. Perhaps Amtrak could have been a private for profit company by now. It's been nickel and dimed for years.The answer for the "Sunset Limited" is more service, more income not less.
Amtrak was never expected to be profitable at least when originally incarnated from the defunct and decrepit Penn Central RR. Too bad too. Passenger rail travel could be a break even business or even profitable if it were run by real managers and not subject to ruinous labor contracts. Maybe not everywhere, but certainly in the NE corridor. Ultimately the demise of the passenger rail system nationwide came about because unions ran and owned the show and local governments meddled to complicate the right of ways carved out of the american landscape in the 19th century. Then there is the federal gov't - don't get me started...
$40 Billion? That's it?! Bailouts of the highway trust fund, automakers, and the 'cash-for-clunkers' boondoggle blew through more than that in 2009 alone!
Money-losing highways hev put the state of Texas $27 Billion in the hole and are LITERALLY driving the state into insolvency. Has anything in rails ever accomplished that?
Sysyphus, where do you get your facts? Amtrak has 67% of the air-rail market between NY and Washington. The auto and truck are the most heavily subsidized mode of transportation. Here in NJ, 91% of road route mileage is County and Municipal road, all paid for by the property tax. RIL Pys for its road bed, signals and even its own police.
Did not know that Nat'l. Train Day was coming!! It is so weird that I heard a commercial on the radio today for taking the Amtrak. To Mardi Gras. Unfortunately for them, that was about three months ago. I have never heard a commercial for Amtrak on the radio. Anyone else hear it?
National Train Day? Does this mean more of these bizarre people who videotape trains at crossings, presumably so they can go home and re-live the entire stirring episode of coal car after coal car passing by whenever they want?
Ever seen these people? I thought I was witnessing some obscure form of autism.
Amtrak subsidies need to go. Along with subsidies for electric and hybrid cars. Both are things used primarily by middle class white people, whom we are constantly told don't need tax breaks.
Sure, we subsidize all sorts of transportation. But rail is the least cost effective way to move people of them all.
I find it interesting that the same adminstration who essentially took over General Motors is also subsidizing its "competition". By some estimates, railroad passenger service was NEVER profitable, and the automobile made it unnecessary. lET IT GO!
Pocono 34 cites a common piece of Amtrak propaganda and misinformation. Its share of the NEC "air/rail" market is about 65%, but so what? Its share of the NEC bicycle/rail market is about 99.9%, and that's still meaningless. Amtrak's MARKET SHARE of all intercity trips (non-recurring, i.e., non-commuter, person trips over 100 miles, the standard definition of "intercity travel") in the Northeast Corridor is about 1 1/2%, according to US DoT Bureau of Transportation statistics data. And its trains have a load factor of less than 40%--they can't give away 3/5ths of their seat-miles (and outside the NY-Philadelphia submarket, the load factor is closer to 30%. So for about $35 billion in cumulative taxpayer investment in Amtrak in the NEC alone, we have accomplished what is essentially irrelevant. Outside of NY-Philadelphia, every single body that Amtrak carries in the NEC could be easily taken into existing air and highway capacity, and NJ Transit and SEPTA could easily handle all of the NY-Philadelphia traffic.
The NEC is by far Amtrak's worst market, measured by any rational index of return on investment, or financial results of operations.
There are still passenger trains here in the United States? Seriously? Because I live right on a major rail route, and I haven't seen a passenger train in this country Nixon was president.
The passenger train has gone the way of the plow horse. No wonder Osama wanted to blow one up -- our enemies don't understand us and are stuck in the past. Blow up a train? Nobody's thought of doing that since Butch and Sundance.
