By Guy Span President Bush and his Secretary of Transportation, Norman Minetta, have a plan for Amtrak, the National Railroad Passenger Corporation. They want it go into bankruptcy to “save” it. The plan calls for zero funding for the national system, and then sets aside $360 million to keep the high-speed Northeast Corridor operating (Washington, D.C. to Boston, MA). All other long-distance trains would be shut down, but the states would receive a 50% Federal match for any trains they wanted to run, and these services could be run by either Amtrak (assuming it survives bankruptcy) or another operator. This plan assumes that the Corridor could be operated for $360 million, and the other $700 million of Amtrak funding is squandered on long-distance trains.
By Guy Span
Published: June, 2005
President Bush and his Secretary of Transportation, Norman Minetta, have a plan for Amtrak, the National Railroad Passenger Corporation. They want it go into bankruptcy to “save” it. The plan calls for zero funding for the national system, and then sets aside $360 million to keep the high-speed Northeast Corridor operating (Washington, D.C. to Boston, MA). All other long-distance trains would be shut down, but the states would receive a 50% Federal match for any trains they wanted to run, and these services could be run by either Amtrak (assuming it survives bankruptcy) or another operator. This plan assumes that the Corridor could be operated for $360 million, and the other $700 million of Amtrak funding is squandered on long-distance trains.
The arguments against Amtrak are many and promulgated by various, right-wing “think tanks,” whose constant railing against big government waste has finally found an audience with our lame-duck President. Interestingly enough, the last time Amtrak suffered such an attack was the second year of President Reagan’s first Administration, when they zero-budgeted Amtrak for every remaining year of his two terms. Both the House and Senate continued to fund Amtrak, but never to the level requested.
The premier argument against Amtrak is often voiced by Joseph Vranich, a former Amtrak spokesperson (did they fire him?) and “Think Tank” affiliate. He claims that everyone can see Amtrak is a failure because it loses money. He considers it a flawed idea imperfectly executed and an example of Government waste, making it a legitimate Republican target.
This concept of Amtrak making money goes back to its inception, where the railroads had to pony up cash to get Amtrak started. In the best spirit of private enterprise and public service, equipment and cash were extorted in 1971 from the privately owned railroads, in order to relieve them of the burden of running long-distance passenger trains. The railroads, while not happy with the extortion (three did not join), were indeed relieved of the cost of long-distance trains, some of which lost over a million a year (in 1970 dollars) on a single train.
Out of these donations, the Federal Government formed Amtrak and for some mysterious reason, it was supposed to be immediately successful and profitable. How could combining over 100 money-losing, long-distance routes, and using aging locomotives and passenger cars suddenly result in a profitable rail passenger corporation? The answer, in hindsight, is that it couldn’t. And yet, from the start, it was supposed to.
And this perception is still with us today, as we judge Amtrak a failure because it requires a fiscal subsidy, despite the fact that most railways in the world also operate with a subsidy, including freight operations. Indeed, all the Republican hand-wringing about Amtrak’s subsidy overlooks the fact that nearly every other form of transportation is subsidized, including low-cost publicly paid airports and flight controllers, highway gas taxes, public locks and river control for barges, cruise ship terminals, and the like. For the simple reason that Amtrak’s subsidy is more overt than any other, we can then call it a failure.
And Amtrak has enemies. Its host railroads, as part of the enabling legislation, must provide train paths for Amtrak with priority handling at a lower price than it would provide to any other carrier. In particular, Union Pacific, through its fund for Effective Government (PAC), donated some $787,047 to Republican interests in the 2004 election and has been mauling its Amtrak trains, particularly on the Sunset Corridor (LA, New Orleans, Orlando). On-time service has been so horrible that customers miss connections by as much as a full day. These passengers are often incensed with this miserable handling and blame Amtrak, even though the fault is the Union Pacific’s. But UP’s president arranged donations of an additional $200,000 to the Bush re-election, earning its president, Dick Davidson, “Ranger” status in the Republican camp, not to mention that the sitting vice-president also sat on the UP Board.
According to Bloomberg’s news analysis, corporations backing Republicans outperformed the S&P 500 by a considerable margin. Since 2000, the UP has returned 29% compared to a drop of 4.1% for the S&P. And many of Amtrak’s other carriers are also on the big donation list.
Some of these other railroads also provide miserable handling and thus Amtrak’s customers, who should be on its side, are thinking no service would be better than the horrible service Amtrak provides. And the host railroads agree, having ignored incentive on-time payments in 2003 that would have earned them between $14 and $23 million (depending on the railroad) in incentive payments, according to a Federal Railroad Administration December 10, 2003 report. This same report clearly outlines the host railroad point of view: “If it made financial sense for the railroads, they would provide the service to capture these payments. However, according to management at the railroads we interviewed, the scheduling Amtrak requires does not fit their freight transportation operations, and the costs that would be incurred for such scheduling exceed the amount of the incentives.”
Thus, doing away with Amtrak would eliminate both, the low cost passenger access and Amtrak’s right to operate these bothersome passenger trains. Eliminating these rights may mean that long-distance passenger trains will never return. Closer to home, service over the Altamont on the ACE trains to San Jose using the Union Pacific has been so poor that ACE has been forced to reduce fares in an attempt to keep riders on its late trains, which only manage a 66% on-time performance.
Another tiny little fact no one wants you to know is that many Amtrak employees have a five-year labor protection program. This leads to the high cost of shutting down Amtrak, which would continue generating costs for station protection, equipment storage, management severance, and the five-year union salaries. The result is that shutting down Amtrak would take a long time to generate budget savings. Note that the primary reason for shutting down Amtrak is to “save” money.
Another and more frightening fact is that Amtrak is the commuter train operator for many such services around the country including our own Capital Corridor services between San Jose, Oakland, and Sacramento. Should Amtrak shut down, the Capital Corridor services would need a new operator who might have to negotiate with the Union Pacific to provide train paths at an entirely new cost level. This scenario would be repeated around the country and many rail commuter services would simply go away, after being unable to find a new operator or negotiate affordable access fees.
Many transit operators see the attack on Amtrak as a broad-based attack on all passenger rail transit operations and the frightening vision is that absent Amtrak, rail transit operations would only exist in special circumstances, such as where a public agency owns the track or has negotiated special access rights on its own.
So, in reality, the attack on Amtrak is rather a full out assault on automobile alternatives, whether intended or not. The Minetta promise of 50% funding for those trains we want to keep amounts to the states picking up 50% of the cost of Amtrak’s long-distance trains or, to put it in simple terms, the elimination of such trains. For the first time, we have a full-fledged assault on long-distance trains, and a sneaky assault on state-funded commuter trains. Given the current fuel crisis, you have to wonder why the Republicans want to kill an alternative that helps us consume less fuel. Maybe it’s the donations?
You can contact Guy Span at info@baycrossings.com
