Congress Needs to Look Beyond Amtrak Model

Posted May 1, 2003 at 2:53pm

The importance of the transportation sector to our nation’s economic well-being cannot be overstated. But it is also an area ripe for reform. Perhaps the best example of the need to restore common sense to our nation’s transportation is the failed Amtrak system.

I agree with those who say this country must work to build a 21st century high-speed rail network. America deserves and needs a rail

system that reflects the greatness of our people. But, reliance on an underperforming, quasi-state-run rail system does not advance us toward a 21st century rail system. It puts us further behind our stated goal, as well as other nations of the world. We are in the company of only Cuba, according to a World Bank expert, in having a state-run rail system.

To provide a little history, Amtrak, the National Passenger Rail Corp., was created in 1970 when Congress stepped in to guarantee passenger rail service over a route system chosen by the Department of Transportation. In the more than 30 years of Amtrak’s existence, it has never turned a profit. Every year of its existence Amtrak has come to the federal government asking for assistance to make up the losses on its system. Then, in 1997, Congress passed the Amtrak Reform and Accountability Act, which set the goal that, by the end of 2002, Amtrak should operate free of federal assistance. Unsurprisingly, this goal was not met.

Many would say that we unfairly single out Amtrak by asking it to be self-sufficient when at the same time we provide tremendous subsidies for our highway and aviation systems. But next time you gas up your car and pay federal and state gas taxes, you’ll know who is paying for our roads.

To put in perspective just how bad the situation is, consider a few examples of the money-losing routes Amtrak maintains outside the successful Northeast Corridor. The Sunset Limited runs from Los Angeles to Orlando. It loses more than $347 per passenger, according to the most recently available numbers (2001). The airfare between these two cities is as little as $215. This means the federal government could save $132 per passenger if it bought each and every passenger on this route a plane ticket.

The Pennsylvanian runs between Philadelphia and Chicago and loses more than $292 per passenger. The Three Rivers line runs between New York and Chicago and loses more than $245 per passenger. I found eight airlines that fly between these same two cities each day and have airfares less than the Three Rivers’ per-passenger loss. You don’t have to be a CPA to understand that Amtrak’s losses are unsustainable.

These are just the routes it runs today. Perhaps the most egregious example of unaccountable spending was the Lake County Limited, which ran from Chicago to Janesville, Wis., and lost more than $1,200 per passenger.

Given these losses, it is not surprising that Amtrak has squandered more than $33 billion in taxpayer money. Yet we ask our constituents, the American taxpayers, for their hard-earned money to subsidize this system.

Despite the required self-sufficiency, when Amtrak began running short of cash in the summer of 2002, Congress and the administration were approached for an emergency aid package. When Amtrak was met with skepticism, it employed a tried and true strategy: If it didn’t get every dollar it wanted, it would shut down, stranding thousands of passengers, especially those on its profitable Northeast Corridor.

Amtrak came back to the taxpayer again as Congress wrapped up the much-delayed fiscal 2003 appropriations process. In a largely empty chamber, the Senate attempted to boost Amtrak spending from the $521 million requested by the administration, and approved by the House in its budget resolution, to $1.2 billion. To those of us interested in rail reform, this was not the message to send the first time Amtrak failed to meet its Congressional mandate.

After 13 colleagues and I protested to the conferees, Amtrak ultimately managed to secure most, but not all, of its request, but there were some promising reforms exacted from the railroad, including requiring the secretary of Transportation to disperse the money and demanding that each long-haul route apply for a separate grant, thereby demonstrating its financial position.

Additionally, some of the most critical reforms may not come from the halls of Congress. This June, the administration will have a tremendous opportunity to achieve significant change to Amtrak, when the terms of four Amtrak board members expire. President Bush should appoint board members who will bring American rail service out of the past and watch out for the interests of the taxpayers.

The challenge before decision makers, in the states as well as in Congress and in the administration, is to leave behind the old thinking in transportation. We can’t build a modern, successful rail network on the Amtrak model. But our country’s stalled thinking in transportation does not stop with Amtrak. It is pervasive throughout transportation policy.

That is why I have introduced, with Rep. Adam Smith (D-Wash.), H.R. 1767, the Freeing Alternatives for Speedy Transportation Act. This legislation provides states a much-needed tool they can use to help themselves solve the congestion crises affecting America’s metro areas. By empowering state and local decision makers with the ability to seek new sources of funding to build desperately needed roads, we build on proven innovations already employed in states such as Virginia, Texas and California, as well as in Australia, Canada, Italy, Japan and China.

There is much to be done in this country to equal the vision of our predecessors, who built the transcontinental railroad, and more recently, the Eisenhower highway system. Fixing Amtrak and advancing innovations like the FAST Act are the first steps to build a transportation system for the American people that will be worthy of their greatness.

Rep. Mark Kennedy (R-Minn.) is a member of the Transportation and Infrastructure Committee.