Congress still on wrong track with Amtrak

0 Comments | Insight on the News, March 11, 2002 | by Woody West

Tradition is to be valued. But there comes a time when it is overwhelmed -- Amtrak, or socialized passenger rail service, being a prime instance. That turkey is done. As much as $50 billion in current taxpayer money has been chewed up, and big bucks still are flowing out of Congress for this failed effort.

Amtrak was established in 1970 after the bankruptcy of Penn Central. In 1997, with red ink flooding the federally subsidized tracks, Congress ordered that it be "operationally self-sufficient" by this coming December -- and did so with a straight face, or as straight a face as Congress can muster while gleefully handing out your hard-earned bucks. Guess what? The president of Amtrak, George Warrington, announced last month that he intends to shut down most of the system on Sept. 30 unless Capitol Hill tosses him $1.2 billion with which to play. (The 2003 budget includes only a paltry $521 million.) Warrington says 300 managers and 700 union workers will be laid off. Got to do it, he warns, and even the $1.2 billion would be only a Band-Aid.

Amtrak rolled up a record $1.1 billion deficit last year, a continuation of its annual multimillion-dollar bleeding, and is in arrears in capital spending and maintenance by $5.8 billion. In 1983, Congress also graciously allowed Amtrak to default on guaranteed loans, and in 1997 required the IRS to give it a $2.2 billion tax "refund" even though the beast never has paid a farthing in income taxes.

Call it how not to run a railroad.

But mildly encouraging now, a long study by the congressionally mandated Amtrak Reform Council is recommending major surgery that sounds sensible and feasible. The proposal basically would provide a two- to five-year "transition'" to a market system, with three separate entities overseeing aspects of Amtrak during this interval, including one to focus on what amounts to the jewel in Amtrak's crown -- the Boston-Washington operation. Federal subsidies would continue during this transition, as state and/or private franchises are "permitted" to assume passenger operations while the feds would be responsible for track maintenance and facilities.

Excellent to outstanding -- or so one might think who does not understand the ways of Washington. Which is to say, "Do not call for a reservation quite yet on the new choo0choo."

The dollar-hemorrhaging Amtrak has been a sacred cow-catcher in Congress since it was cobbled together. Sen. Charles Schumer, the voluble New York Democrat whose dreams all seem to involve ever-higher federal spending, led the grumbling. The reformation proposal, he yodeled, chose "to ignore the fundamental problem ... of chronic federal underinvestment" in Amtrak. Seconding the daft motion was the chairman of Amtrak, Michael Dukakis, the former Massachusetts governor who ran one of the most inept presidential campaigns on record. He called the decentralization "a prescription for bureaucratic paralysis" and said the real issue is money -- that is, your money.

What planet are these guys from?

The transportation world has changed radically, of course, in this last half-century. The Medicare generation grew up with trains as the nation's primary carrier. After World War II, however, the airline industry took off, so to speak, heavily subsidized by government. America's profound love of the automobile and the interstate highway system also steadily reduced rider revenue. Thus, the increasing anemia of passenger traffic -- and the imbedded power of the unions -- led to the creation of Amtrak.

The high hopes for the National Railroad Passenger Corp., Amtrak's formal name, were underwritten by the romance of U.S. rail history. Despite the patent experience of rail travel as the late-20th-century version of the passenger pigeon -- well on its way to extinction -- Amtrak chugs on over a creaky track. Although it carried 23 million passengers last year with its monopoly on intercity rail service, this was the merest fraction of those who used airline travel -- and each Amtrak rider is subsidized at close to $100 per trip.

There was a wan hope after Sept. 11 that the terrorist attacks would create a trend toward more rail travel. According to Joseph Vranich, however, a longtime supporter of rail service and a former member of the Amtrak Reform Council, traffic did increase on a few lines, but on most of the Amtrak system "it actually fell."

Vranich argues for short- to medium-haul lines being taken over by the states or by concession and/or franchises, as the reform report suggests. He notes that there is increasing privatization of railroads in Europe. "The justification for a national passenger railroad has evaporated, and the money flow to Amtrak has to stop," he contends in an article in the Washington Post. He includes the pending congressional bond authority for "high-speed" trains in the Midwest and South, "which is nothing more than a bailout in disguise.... I regret my long role as an outspoken Amtrak ally."

Trains still have a useful future, but not Amtrak as a national system. Commuter rail service in urban areas is showing increasing muscle as highways become more clogged by the day. Virginia's recent successful inauguration of commuter rail service and Maryland's expanding service, for instance, strongly suggest that the train's day is far from finished. And eventually, the privatization of short- to medium-haul operations could provide national links.