Posted on 02/16/2005 6:12:01 PM PST by Sam Cree
- Amtrak financing nearly eliminated in proposed Bush budget; Amtrak president reacts in message to employees
WASHINGTON – Highway financing would rise slightly while almost all spending for Amtrak would be eliminated under the Bush Administration’s proposed Transportation Dept. budget, according to a story in today’s New York Times. The budget provides no money for Amtrak itself, but does include $360 million to maintain commuter service that uses Amtrak right-of-way in the Northeast Corridor if the passenger carrier goes bankrupt.
Transportation Secretary Norman Y. Mineta said federal subsidies for Amtrak had almost doubled in the last four years, to $1.2 billion in 2005 from $520 million in 2001. "After 34 years of Amtrak operating losses and $29 billion in taxpayer subsidies, it is clear that the current model of passenger rail service is flawed and unsustainable," Mineta said.
Amtrak, however, has always survived because of supporters in Congress, and they rallied to its defense on Monday. Senator Charles E. Schumer (D - NY), said, "Eliminating Amtrak wouldn't just cost us billions of dollars in operating funds for the trains and the business people and tourists they bring here, it also shreds the safety net we'll need in case - God forbid - our airspace is shut down again like it was after 9/11."
The Administration’s proposal is seen by some as basically flawed because of the length of time, and money, that would be required to actually shut down Amtrak.
Amtrak President David Gunn issued a statement of support to Amtrak employees on the proposed Bush budget.
Dear Amtrak Co-Workers,
“Earlier today, President Bush sent to Congress his proposed budget for FY '06. It provides no funding for Amtrak. In contrast, this year we are spending $1.4 billion, of which $1.2 billion is from a federal appropriation to support our operations and capital programs across the country.
“The President's proposal does provide $360 million to the Surface Transportation Board for continued commuter and freight operations on the NEC [Northeast Corridor] only after forcing an Amtrak bankruptcy. It also isn't accompanied by any kind of plan for how Amtrak could continue operations. In a word, they have no plan for Amtrak other than bankruptcy.
“Obviously, the proposal is irresponsible and a surprising disappointment. It doesn't acknowledge all the hard work you've done over the past two years to run a tighter and better ship. Our costs are more under control than ever before - that's quite an accomplishment.
“It is critical that reforms and improvements must continue, however. Amtrak's management is engaged with its board, the Department of Transportation, and others for this purpose. That work continues. We are committed to an efficient and productive rail passenger system. The plan to force us into bankruptcy would be counterproductive to this goal.
“The President's proposal is only the start of a long legislative process, and we are taking it very seriously. This process has a lot of twists and turns, and it always takes six to nine months to sort out. It won't have any impact through the 2005 fiscal year, but there's going to be very little cash left at the end of this year. Rest assured that after all we have been through, I am committed to doing everything I can to secure adequate funding for FY '06.
“We have strong support in Congress and a lot of support across the country.
“The best thing that all employees can do is to do their jobs professionally, delivering the highest quality passenger service we know how. If we really care about our passengers, others will care about us. As I travel in the Midwest this week, you can bet that I'm going to be looking at service standards. Stay safe out there, and keep your heads up.
Sincerely, David L. Gunn”
But considering other things that our government gives money to, Amtrak is as deserving or more deserving than many.
And there are other considerations: Amtrak can never make a profit, not even given another 34 years, since equipment purchases and maintenance, track maintenance and fees, and labor are all so expensive as to drive its service beyond market price. If union and government rules did not arbitrarily set wages and expenses arbitrarily, with no regard to the market, then perhaps this would not be so, but, IMO, there is little chance that these things will ever change.
Auction off its assets and let the private sector takeover.
Auction off its assets and let the private sector takeover.
(I do not want to hear about the co-efficient of friction of steel on steel versus rubber on concrete ~ at the end of the trick you still have to get home from the station).
(Besides, I rode Metro-rail in the DC area for many, many years, still my hitch-hike operation in Springfield was much more efficient for it's users in that 5,000 people per day got free transportation to and from designated commuter pick-up operations in DC.)
(Others have coined the term "slug line" for this activity).
Lets drop the financial assistance to the airline industry also. Screw them...if they can't manage their finances they have no business in the industry.
Does anybody think airports and airlines would survive without federal subsidies?
Agreed about the private sector, but as long as industry wages are arbitrarily set according to what some bureaucrat or union boss thinks RR jobs (and jobs in industries on which railroads are dependent, like equipment manufacturing) are worth as opposed to what the market thinks they are worth, then the private sector is hobbled.
I'd like to be proven wrong, though.
Please note also, that highways and airports are not run by the private sector.
Amtrack's got to go over the cliff. Only then will it reflect its real needs. I believe the interurban concept makes sense in its NE environment. Elsewhere, its a loser.
"Auction off its assets and let the private sector takeover."
Why bother - who would want them.
Aside from the Northeast Corridor, where it has some economic value, Amtrak is just a toy for rich people with a lot of time on their hands. It does not even come close to competing with air travel in the real world.
I haven't run the numbers, but my bet is that if you simply bought everyone who wanted to ride Amtrak an airline ticket, it would be cheaper.
I'd like you to explain this to me in a little more detail, since I don't exactly know what you are talking about.
The Japanese are experts in running railroads. Why don't we just invite them to run Amtrak?
Direct subsidies were ended before Richard Nixon's resignation.
If the stage coach industry was socialized we'd still be subsidizing it.
Their expertise would fall into the trashcan if someone said "Gee, besides all of that, go serve Siberia".
Our people do not lack the expertise of how to run a railroad ~ they simply lack a market for what they are selling.
Bingo!
Amtrak (one single enterprise) gets 30 times the subsidy per passenger mile than the entire airline industry gets.
Why should the government prop up a business that has no need in the market place anymore?
Senator Charles E. Schumer (D - NY), said, "Eliminating Amtrak wouldn't just cost us billions of dollars in operating funds for the trains and the business people and tourists they bring here, it also shreds the safety net we'll need in case - God forbid - our airspace is shut down again like it was after 9/11."
The Administration’s proposal is seen by some as basically flawed because of the length of time, and money, that would be required to actually shut down Amtrak.
“Earlier today, President Bush sent to Congress his proposed budget for FY '06. It provides no funding for Amtrak. In contrast, this year we are spending $1.4 billion, of which $1.2 billion is from a federal appropriation to support our operations and capital programs across the country."
Not one freeper read between the lines? All but $200M of their budget was stolen? ...Six/sevenths of their budget...stolen.
"Amtrak (one single enterprise) gets 30 times the subsidy per passenger mile than the entire airline industry gets."
Subsidies are subsidies...do away with all of them.
And then there's the question of all the benefits that should be flowing back into the Department of Defense coffers given all the new imperial territories recently opened up for looting (/sarcasm /cynicism).
Amtrak user fees (fares) provide a greater percentage of their agency costs than just about every other agency of government in this country.
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