End of the Line: The Failure of Amtrak Reform
and the Future of America’s Passenger Trains
by Joseph Vranich
(AEI Press, 204 pages, $25)
Once again, Amtrak is before Congress asking for another handout.
Having lost $600 million last year — about average for the 34
years of its existence — the company is once again begging
Congress for money.
This time, however, the Bush administration plans to end the
charade that Amtrak will one day become profitable. It wants to end
the handouts, making Amtrak compete like any private company.
Democrats, of course are opposed. They love any government program
— even those created by the Nixon administration. Before they
begin their annual last-ditch stand, however, they would do well to
read Joseph Vranich’s new book.
A former public affairs spokesman at Amtrak, Vranich has one
thing to say about Amtrak — it’s a rolling disaster. The
government-owned corporation now regularly requires nearly $1
billion a year in subsidies. It is drowning in debt. Two years ago
it mortgaged New York’s Penn Station for $300 million to pay three
months’ operating losses.
Nearly empty trains roll through Iowa and Montana, subsidizing
passengers at a rate of $300 per ride. Meanwhile New York’s
cross-Hudson tunnels are a disaster waiting to happen because
Amtrak won’t spend the money to improve fire protection and escape
routes.
Challenged by private competition, Amtrak acts like the worst
19th-century monopolist. When fed-up cities have tried to take away
Amtrak’s franchise for their commuter lines, Amtrak has refused to
allow rivals to use its stations and track facilities. By all
rights, the corporation should be facing anti-trust charges from
the Justice Department. Instead, it comes back to ask Congress for
more money each year.
LIKE MOST PEOPLE WHO once put their faith in Amtrak, Joseph Vranich
has had enough. A former president of the High Speed Rail
Association, Vranich also served on the Amtrak Reform Council, one
of the many efforts to bring the corporation under control.
“Attempts to reform Amtrak have avoided hard choices, had little
impact on efficiency, and ultimately failed,” he writes. “Reform is
a dead end.”
Another notably disillusioned former enthusiast is Anthony
Haswell, an old-fashioned railroad buff who led the effort to save
the nation’s passenger railroads in the 1970s and is known as the
“godfather of Amtrak.” In 2001, Haswell ended up suing Amtrak under
the Freedom of Information Act to get the corporation to disclose
its wastrel ways. “Amtrak’s overriding concern is to assure its
institutional survival,” Haswell told Vranich in 2001. “It is a
sick and failed organization that should be put out of its
misery.”
Amtrak’s basic problem is that it is stuck in the past. Sitting
for days and nights in a railroad car no longer has any appeal.
Amtrak only handles .3 percent of the nation’s intercity travel.
Airlines handle 92 percent while buses carry another 7 percent.
Each of the nation’s 16 largest airports services more travelers
than all of Amtrak. Private airplanes carry more
passengers. And of course automobile traffic drowns all this, with
five times as many passenger-miles as the airlines. Yet still
Congress coughs up $1 billion a year to keep the trains
running.
Why?
AS WITH SO MANY government programs, Amtrak is supported by liberal
Democrats with an idealistic love for federal ownership and
conservative Republicans who take home the bacon. Most of Amtrak’s
political support comes from East and West Coast liberals, plus the
labor unions, which are, at bottom, its main defenders. Meanwhile,
the Congressmen from Wolf Point, Montana, and Gallup, New Mexico,
are hometown heroes. A 1998 report of the General Accounting Office
found that “fewer than 100 passengers, on average, boarded Amtrak
intercity trains and connecting buses per day in 13 states,” all of
them in the South and Midwest.
After Amtrak collected another billion-dollar subsidy in 1997,
Congress tried to rein in spending by establishing the Amtrak
Reform Board. Instead of appointing business and financial types,
however, President Clinton nominated former presidential candidate
Michael Dukakis, Governor Tommy Thompson of Wisconsin, and Mayor
John Robert Smith of Meridian, Mississippi. Smith spent most of his
time trying to get the Atlanta-to-Dallas line run through Meridian.
Thompson actually established a new route from Chicago to
Janesville that ran nearly empty and cost $1,000 per passenger.
Dukakis was content to preside over government in action.
When confronted with austerity, Amtrak routinely threatens to
shut down suburban commuter lines by closing its stations in New
York, Philadelphia, and Chicago. When Missouri tried to award
Amtrak’s St. Louis-Kansas City line to a private competitor, Amtrak
refused to allow access to its rail facilities, killing the deal.
Few private companies since John D. Rockefeller’s Standard Oil have
so brazenly practiced restraint of trade.
Vranich believes Amtrak should be broken into three entities and
sold to private companies or devolved to state and local agencies.
In particular, the Boston-New York-Washington corridor should be
run by a regional agency with trains operated under competitive
bidding. Amtrak’s contracts to provide urban commuter trains in
places like Seattle and San Francisco should be re-bid to bring in
more economical private operators. Finally, some of Amtrak’s
hopelessly unprofitable long-distance intercity passenger routes
should be sold to private interests. If they cannot be run
profitably, they should close down.
IT’S NOT AS IF RAILROADS aren’t important to the nation’s
transportation. While Amtrak has become an antiquarian relic, rail
freight in thriving. Since Conrail was sold back to private
enterprise in 1987, freight lines are carrying more cargo than
Conrail ever. Their main problem is that freight trains must often
sit for an hour on sidings waiting for Amtrak trains to pass.
Remarkably, America is now far behind the rest of the world in
getting passenger lines back to private hands. Europe and Japan
have largely broken up their national rail monopolies. The European
Union even prohibits member countries from cross-subsidizing
passenger service and profitable freight lines.
In Canada, the Great Canadian Railtour Company bought a
money-losing Western passenger line from the government and turned
it into the Rocky Mountaineer, a profit-making tourist experience
that attracts customers from all over Europe.
Amtrak, says Vranich, has lost all sense of purpose except its
own survival. “The company has treated its biggest customers with
disdain, while disparaging successful rail privatization and
devolvement that are occurring throughout the world,” he concludes.
“It is difficult to describe Amtrak management and personnel as
‘passionate’ about anything except their belief that the government
owes Amtrak higher subsidies.”
Good enough reason for Congress to follow the advice of the
advice of the Bush administration and finally cut Amtrak
adrift.
