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Rolling Disaster

Amtrak has reached the end of the line.

By 3.14.05

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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.

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About the Author
William Tucker is news editor for RealClearEnergy.org.