Amtrak needs prudent financial reform – not privatization

October 1, 2012 

Mitt Romney and the GOP are right about Amtrak on one score: it could be operated more efficiently. But the Republicans are wrong about ending the rail subsidy and privatizing the nation’s rail passenger service.

Amtrak ridership will exceed 30 million this year, a record. At current trends, it will top 43 million by 2040.

Northwest passengers are also riding Amtrak trains more than ever, going over the 845,000 mark last year. Ridership should take a bigger jump next year when two new trains are added to the five that already travel from Eugene, Ore., to Vancouver, B.C.

On the more densely populated East Coast, 75 percent of those traveling from Boston to New York ride Amtrak trains, an increase in market share of 54 percent. Even the St. Louis to Chicago route is seeing double digit increases.

Despite that, and the fact that Amtrak covers 85 percent of its operating costs from fares, it still relies on an annual $1.5 billion federal subsidy. Republicans want to cut that from the federal budget, and included a party platform for its elimination at the recent national convention.

Romney told an interviewer that he lumped Amtrak in with other disposable programs he would cut, “the Amtrak subsidy, the PBS subsidy, the subsidy for the National Endowment for the Arts, the National Endowment for the Humanities.”

Chopping $1.5 billion seems pennywise and pound-foolish considering the federal government bailed out the highway trust fund by more than $50 billion in just the last four years, and it continues to spend tens of billions more every year subsidizing roads, airlines and ports.

It’s proven that given a convenient choice, Americans prefer rail travel. Just as people do in Europe and Japan, where other governments of industrialized nations have invested heavily in developing high-speed trains.

The difference is that Europe and Japan more closely resemble the East Coast corridor where congestion and population size makes passenger rail profitable and efficient.

The federal government had the opportunity under former President George W. Bush to reform Amtrak. The railroad’s president at the time, David Gunn, had a reputation for hard-nosed cost-cutting and appealed to the administration to take on Amtrak’s labor agreement. He was fired in 2005 for his effort because, he said, “They (the administration) told me they’re not going to touch that with a 10-foot pole!”

Amtrak could benefit from other reforms, too. It’s obvious from the experience in the U.S. and other nations that rail services operate best and most profitably along densely populated corridors of 200 to 300 miles. Each segment of the Boston to New York trip is 250 miles.

But Amtrak is saddled with providing a money-losing service in all but four states, and has 15 trains serving trips from 764 to 2,438 miles long.

If Republicans want to reduce and eliminate the Amtrak subsidy over time, they should start by giving it the freedom to consolidate and tackle labor reforms. That’s what the Japanese did before turning it’s rail service over to the private sector.

It just won’t happen overnight, and that’s the problem. Everybody, especially tea party candidates, is looking for a quick fix that makes a good sound bite, regardless of whether it is an impractical, even damaging, policy if actually enacted.

There is a demand for convenient, high-speed rail travel in certain areas of the United States. The Northwest corridor is one of those.

Let’s put Amtrak on a prudent path toward financial self-suffiency.

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