Hey man, states don't want Amtrak bad enough to pay for it out of their coffers!
Posted on 07/29/2003 3:46:50 PM PDT by bruinbirdman
"The Bush administration proposed today to pay for intercity passenger rail service on the same basis that it pays for mass transit, with Washington paying part of the capital cost, but making the states pick up the rest, along with the operating deficits. Under the plan, the states would decide what service would be offered," reports The New York Times.
"Since its creation in 1970 Amtrak has run deficits each year and collected at least $25 billion in federal subsidies, while accounting for only three-tenths of one percent of all trips taken annually by Americans," says Cato Institute Adjunct Scholar Edward Hudgins. "It claims to need $1.8 billion this year to survive. The Bush proposal is a step in the right direction and probably will lead to the closing of some unprofitable long-distance routes. But in the end the plan simply transfers government inefficiencies from the federal to the state level. Ultimately, Amtrak will need to be sold off to the private sector."
In "Help Passenger Rail by Privatizing Amtrak," Hudgins and former Amtrak reform council member Joseph Vranich take a look at the passenger line's finances and call for its privatization, noting that Amtrak's long-distance lines are not sustainable. "The rush to throw money at Amtrak represents government at its worst," they write. "The nation should not stay wedded to the Amtrak paradigm, which has been a colossal failure for 30 years, because terrorists' acts have boosted train travel."
Let's see, they are riding rails laid down decades ago at taxpayer expense, and the rails appear to be in fine condition. The trains are also carrying cargo; and due to the cost of laying the tracks with a minimum 3% grade (based of statements while in Seattle) the overall efficiency of moving the freight is much greater than a comparable number of semi's. And one other little tidbit of information. The Railroad maintains mineral and lumber rights within a mile of either side of the tracks as it passes through federal property.
Amtrack is receiving taxpayer funding which amounts to free money; and the rates they charge to travel are many times higher than the cost of either traveling by car, or by airplane.
Time for the US Gov't to allow free market to work. If they can't control expenses and profit; they go under.
"The Bush administration proposed today to pay for intercity passenger rail service on the same basis that it pays for mass transit, with Washington paying part of the capital cost,..."
So, when is the administration (or any administration, for that matter) going to say the same thing to the airlines? Considering the fact that as a knee-jerk reaction to 9/11, the Government gave $15,000,000,000.00 (not even 1/2 of what Amtrak has received in over 30 years) to the airlines without any expectation of re-payment, why should passenger rail be forced to make a profit.
If I am not mistaken, Warren Buffett made the observation that over the 100 years of flight, no airline has ever made a profit, despite being the gracious recipients of governmental funding, and not having to pay for the facilities they use (airports, runways, etc., which are all paid for by the government).
It's also quite telling that (as far as I can tell) Cato has never come out in favor of ending airline subsidies--maybe someone can correct me on this.
Southwest?
Let's see, they are riding rails laid down decades ago at taxpayer expense, and the rails appear to be in fine condition.
If I am not mistaken, until the formation of the Consolidated Rail Corporation, no railroad (with the possible exception of the Central Pacific and Union Pacific and the first transcontinental route across the country) has received federal subsidies. There was, of course, the Railroad Post Office (RPO), which did (I believe) receive money from the United States Postal Service for moving the mail in the most efficient way. Also, those rails that were laid down by the railroads require maintenance, none of which (as far as I can tell) is paid for by the government.
Amtrack is receiving taxpayer funding which amounts to free money; and the rates they charge to travel are many times higher than the cost of either traveling by car, or by airplane.
The airlines and roads are also receiving taxpayer money, but I don't see anyone (especially those in the administration) complaining about that, so why shouldn't passenger rail? I will agree, however, that (at times) the fares are higher. However, a search for a one-way ticket from Milwaukee to Minneapolis/St. Paul yielded a $90.00 ticket from Amtrak and prices ranging from $250.00-$385.00 on Northwest Airlines. Clearly, one could find a lower airline rate for this city pair, but I'd challenge anyone to find a lower rate.
Time for the US Gov't to allow free market to work. If they can't control expenses and profit; they go under.
I agree with this sentiment, however, it should be equal for all forms of transportation. Maybe if the airlines had to pay for the personnel that make an airport work, more people possibly could understand the situation that Amtrak is in.
Going by AMTRACK is the best way to travel in my humble opinion. You get to see the country and take a more leisurely trip. Sadly, many of AMTRACK's passenger cars are very old and badly need to be redecorated.
It's not the decoration that is the real issue with their rolling stock; it's the maintenance. A recent proposal going around the company was to take certain trains (#1/2 Sunset Limited and #21/22 Texas Eagle, for example) and have them run with only one engine. The main reason for this adjustment is that (as far as I can understand it) the contract with General Electric places the cost of maintaining the engines on Amtrak. Also, the reliability of the Genesis P42 (a/k/a AMD-103) is quite lackluster, especially in the last few months, causing delays to the trains, especially if the only unit breaks down, stranding everyone until the host railroad can get them a "tow."
Also, many of the passenger cars themselves are becoming very unreliable. For example, passengers on Train #2 (departing LA Friday night) were forced to wait in Houston on Sunday for their dinners to arrive from a local KFC, due to a bad dining car, which had to be left behind in Tuscon because the wheels were bad; also, having ordered (and paid for) 200 dinners at 1130 that morning, only 182 had been produced by 4:15 PM.
The following from the All_Aboard Yahoo! Group sums up the conditions at Amtrak:
Every single day it is happening somewhere. The diner off the westbound SW Chief was set out at Albuquerque on Thurday, broken spring. The baggage and dorm car on the next day's SW Chief were switched to the rear end and the dorm vacated. Burned up HEP [Head-End Power] wiring.
Three trips of the SW Chief in the past week had an engine failure.
Friday's eastbound California Zephyr, same thing, engine failure while climbing Donner Pass. Saturday's California Zephyr was delayed leaving Emeryville because two burned out, arced-over HEP receptacles on the Sleeping Cars had to be replaced.
The fleet is falling apart.
Yes, I am fairly certain that, currently, Southwest and JetBlue are making profits, but if I'm not mistaken, (I don't have the quote memorized) Mr. Buffett was speaking of the whole airline industry over the whole life of the industry. It is nice to see that someone is actually making money in the airline industry, but it certainly is the exception rather than the rule.
Ummm you had me for a little bit... then I looked at what I consider major cities ... Austin, TX to Orlando, FL. Looking at this shows a 1 way ticket costing $237 (plus accomodations). The route they have is from Austin to Chicago, then up to Washington DC, then down to Orlando. I think they could have tacked on a few hundred more miles, personally... the time for this trip has me leaving at 10:30 in the morning and arriving at my destination at 11:44 on the THIRD day. Golly, I wonder why more people don't travel by rail?
Oh, and if I go round trip, and get a room to sleep in, the price is an amazing $2,543 per passenger. Yahoo reports that airfare round trip is presently at $231 for the same dates.
Hey man, states don't want Amtrak bad enough to pay for it out of their coffers!
Actually, what Buffett pointed out is that the airline industry as a whole is running at a loss over that 100-year period. Individual airlines can and do make profits on a regular basis.
There are several "if's" that would make the rail a really desirable and luxurious way to travel.
* If the trip were somewhat convenient (3 Days Austin to Orlando?)
* If the trip was comfortable/luxurious and the goal was a 'laid back and relaxing trip', consider the money made in the Cruise industry. You could charge a premium, and people would pay it; as long as it was still within the bounds of being 'reasonable'.
* If the price was within 25-50% over the cost of flying. We are comparing the price of $2,543 per passenger, and 3 days travel time (with layovers over 6 hours long), to a flight 3 hours long and costing $231 for the same dates.
Now, if the rail industry would take a hint from Europe, and runs trains designed for travel and comfort; they would be sitting on a Gold Mine. I mean, a 3 day weekend trip from a major city to Vegas, 1 night in Vegas and return package for $500/person would be a great get-away. Include a room-car that will be comfortable, throw in some food... and you could have a land-based cruise-line. I can't speak for anyone other than myself, but at that price, I'd be interested.
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