Should the government be bailing out Amtrak?

Great Debates
1

Link.

I just don’t know. I’m on the fence.

On the one hand, "Since its inception in 1971, Amtrak has teetered at the brink of bankruptcy. " That does not inspire confidence.

On the other hand, there seems to be a legitimate need for this type of rail service. Amtrak’s folding would certainly hurt California, and the Northeast. Quothe Gray Davis, " “the failure to address Amtrak’s short-term problems would force 80,000 daily riders in California to find alternatives, thereby exacerbating traffic congestion and jeopardizing progress we have made in moving toward a more balanced and efficient transportation system.”

Is Amtrak simply a badly run business? Or is it a business where little or no profit can be made? Is there a real possibility that Amtrak can turn it around? If Amtrak keeps running to the Feds for more money and guaranteed loans, maybe the Dept of Transportation should take it over. (buy it outright now, let it fail then buy the equipment. I don’t know)

I don’t know if there’s much to debate here. But I would like to here some of your views.

2

I travelled coast to coast by Amtrak a few years ago, so can speak of their service with (some) experience. (See my photos here…)

It must be hard in such a car-dominated culture to sell a seat on a train, but it is a great way to travel & relax. I can’t comment on their business running techniques but they 9the trains) are definitely underused - most people on most routes were tourists like myself, very few local Americans (Who tend to use the uncomfortable, overcrowded, more expensive Greyhound,even if it is quicker).

Some routes were just spectacular - Sacremento thro’ the Rockies to Denver is one. The main problem they suffered from was timing - every train was always late. (No suprise there coming from the UK) This, due to the company’s policy towards passengers, led to myself and my friends claiming free taxi’s and free hotel rooms every night courtesy of Amtrak. Which must have cost them a fortune (whilst saving me one).

I think it is a national icon and should be subsidised directly by the Government, but the service should also improve to a level where the average person would be comfortable using it. But that’s the hard bit.

I’m rambling as I remember the times I had on those long train journeys…Mmmm…

3

Do our roads turn a profit? How many federal, state, and local dollars are pumped into roads and highways each year?

As hard as it is for people to grasp, there are aspects of civil society that cannot be run like a corporation or business. I am certain that supporting Amtrak produces economic and social benefits that cannot be measured by looking at the profit margin. If Amtrak is shut down and divided among private entities, it is more than the consumer who will suffer.

As a side note, residents of Washington DC are experiencing the year’s 4th Code Red day for unhealthy air.

4

Along the lines of what Broodha mentions c/o auto “subsidies,” how much does the fed gov’t pump into the FAA? Not to mention the flat out bail out and funds at all gov’t levels for airport construction/maintenance.

Of course, there are economic and employment implications that complicate the equation.

5

As Broodha says, all forms of transportation are subsidized through the general tax. In addition to the roads, gasoline has historically been cheaper than it would be if the cost of replacement and exploration were paid for at the pump instead of via the depletion writeoff against taxes.

Incidently, I notice that United Airlines is asking for a 2 billion loan guarantee under the “emergency” airline assistance legislation. And the CEO of Amtrak said, on The News Hour With Jim Lehrer that this is a cash-flow problem and they will be able repay it this fall.

6

True.

But would it be better simply to remove the middleman, meaning Amtrak. Maybe the government could do it better?

Stop laughing, I’m serious.

7

I think Amtrak needs to be radically changed. This is from someone who frequently uses it to go from DC to NYC. First of all, the trains are always late. Always. But that’s probably never going to change.

Second, I think the routes they offer should be changed. Not very many people take the train coast to coast. I mean, why would they, it costs nearly four times as much for a round trip ticket (just over $900) on Amtrak rather than a plane and it’s slower. Unless the train trip itself is to be your vacation. So why not just eliminate it.

I like the idea of rail corridors. DC to Boston. San Diego to San Francisco. Whatever. Eliminate the rail services that are almost never used…especially the ones that are almost never used by Americans (sorry, tourists, as much as I like you coming here, I don’t feel like subsidizing your trip :)). There must be some sort of data on this (well, probably not on the tourist to American breakdown for trips) that could help with a change.

8

One of the problems I’ve heard about is that Amtrak is required to keep running routes that are not profitable. The northeast corridor is very popular and profitable, this is not true for many of their other routes. If the government is going to require them to run money losing routes, it must subsidize them accordingly.

To close down the whole thing when a portion of their service is highly desired and profitable is just nonsense.

9

In my experience with Amtrak, the trains simply, sure enough, never ever run on time. Any delay down the tracks leads to baffling multiple-hours-long idling, and so forth. Ordinarily I’m very libertarian-sympathetic, but if the government can run the things more smoothly, have at.

But I also suspect that a bailout, when it comes, will simply keep the trains running just as badly, just for another few years.

I’ve heard that the European rail system is by far and away above the USA’s. Are they? If so, how’s the system set up?

10

The British rail system is a total failure, though I hear Scottish Rail is quite good. The main question is, who would do worse: the government, or private rail systems? Both have their vast failings. But the U.S. needs a reliable public rail system—especially if we are going to be dealing with air terrorism and groundings in the future, as we will from time to time.

I will be screwed if Amtrak goes under—I use to frequently to visit my mother in Phila., and need it in case she has any medical emergency. I’ve taken Greyhound during a train strike and it was heinous. I’ve been told I can transfer from NJ Transit to Septa to the Paoli Local, but that would be a hellish, all-day ordeal . . .

11

I could see Amtrack opening a line from me ugly non-home Knoxville to Chattanooga, then Atlanta, and to Nashville, then to Memphis. That would probably kill the local airport, though. :slight_smile:

12

In our area, the trains seem to late because of problems with freight cars blocking the lines. That’s not an Amtrak problem. And have you seen the on-time record of airlines?

Our line (Detroit to Chicago) is a sell-out most weekends. Not sure about the weekdays.

I agree with other posters who have noted that the U.S. makes a HUGE public investment in other forms of transportation. I think train service is worthwhile. It benefits me personally (I love taking the train to Chi-town) but I also think it’s important that we have alternative means of transportation available (9/11, anyone?) and support something that might encourage people to leave their cars at home more.

I’d like to think that some of the Americans who are close to good train service but aren’t using it will catch on. If we give them a chance (and market the crap out of Amtrak).

13

The subsidy question is all important to this debate, but I’m darned if I can see a way to remove it, either hypothetically, for the sake of argument, or in practice. The U.S. government built many major freeways to prepare for war. The diesels in our locomotives came from government-sponsored submarine engines. How much of either of those does one chalk up to an “unfair subsidy”?

I adore European trains. They’re comfortable and pleasant. But I mostly know American trains.

As mentioned, American on-time record is lousy. More expansively, they remind me (I’m western) of time-travel back to the 1940s. Broken down. There’s an ever-present sensation of dirtiness. No sense of “getting business done”. Running slowly. Stopping in the middle of marshes for minutes, for no apparent reason. I keep on wondering whether we’ve run out of fuel, even though I know we’re waiting for some signal. All this spells lazy corporate bureaucracy. The only way to solve THAT problem is to light a hefty fire under them, showing as many as necessary the door. In terms of a practical solution, given how big the railroads are, it ain’t all that likely.

In humanitarian terms, you can’t just turn an entire railroading workforce out to pasture, any more than you can fire all the airport security people. But, boy, do I dream about it. Let’s buy TGV from France, and link every city in the US above 1,000,000. Hmmm.

14

Fark TGV, I want Maglev–they can hit what, 300 mph? Pretty cool stuff.

15

I read an interesting article in the paper yesterday on Amtrak (sorry, no cite). Three things struck me. [ul]1.) Not a single rail system in any country turns a profit.[/ul]The pundits who claim that Amtrack must turn a profit or die need to realize that it’s next to impossible to do that. A national rail system can not exist without subsidies.[ul]2.) Part of Amtrack’s purpose is to provide a backup to the Airline Industry[/ul]If , God forbid, another tragedy similar to 9-11 were to cripple the airlines we would need a national rail system as backup. Commerce could be crippled temporarily if we rely solely on air travel. Therefore, Amtrack is important from a national security standpoint. [ul]3.)For some routes, the current federal subsidy exceeds the price of a mid-class airline ticket[/ul]This shows extreme mismanagement in my mind. Amtrack can not be expected to turn a profit, but it shouldn’t be operating at this much of a loss either. Amtrack should be overhauled, possibly even taken over by the feds, but it by all means should be kept.

16

Amtrak has also refused to open their books to scrutiny.

Let Amtrak go into receivership. This will force the books to be opened, and all aspects of the companies operations will be made public. Then let others bid for the company.

If it has to be subsidized, that’s fine. But it can be run a lot better than it is. It should be fully privatized.

One nit: The roads and the national airspace system are largely user funded. In the case of Aviation, it more than pays for itself. Look up “Aviation Trust Fund” - money from fuel taxes goes into it, and pilots have complained for a long time that the money isn’t being used to expand and upgrade the airspace system because politicians want to use it to offset the debt.

17

SS: *If it has to be subsidized, that’s fine. But it can be run a lot better than it is. It should be fully privatized. *

Just a note to point out that privatizing a rail system doesn’t necessarily imply that it will be “run a lot better” as a consequence: cf. British railways.

18

Why do people keep saying this? Amtrak is the government. It is a wholly-owned public corporation, just like, for example, the USPS. A government “takeover” would simply be an accounting manuever - Amtrak wouldn’t have a seperate budget, but instead its revenues and expenditures would be part of the general government budget. That would be the entire difference. It would no longer need a “bailout,” but it would cost the government and the taxpayers the same amount of money.

OK. So the question is, should the government continue to subsidize intercity passenger rail transport, in its current or in an altered form?
Well, what are the benefits of intercity rail transport? The primary one is reduction of traffice congestion on intercity routes. This, first of all, saves the government money, because it means less road construction and maintenance. Second, it has definite environmental benefits. Third, it helps to relieve air transit congestion, again saving the government money on air traffic control and airport maintenance and construction (though the airport costs are usually a local, not federal, government cost).
That’s really about it for benefits. Amtrak certainly doesn’t save passengers money - these days it is close to the norm that air transport is cheaper than Amtrak to the same destination.

Do these benefits outweigh the cost of subsidizing intercity passenger transport? I submit that they certainly do on corridor routes, but not on long-haul routes.
America is simply too big. Very few people would be willing to spend 36-48 hours on a train when they can get to the same destination in 5-6 hours by plane - even vacationers. The longest Amtrak trip I took was from Philadelphia to New Mexico, a 36 hour trip. It was a great deal of fun - but I was 14 and had all the time in the world. These days, I’m not going to blow about 2 days of my limited vacation time on travel to my destination, regardless of how pleasant the travel is. And I’m certainly not going to do so if I’m traveling on business.

And people who aren’t willing to spend 2 days on a train for a long-haul trip aren’t going to spend 4 days traveling the same route by car, so the road congestion benefits basically disappear on long-haul routes. Some people are, but they are a very small population.
The air transport congestion and environmental benefits still exist, but are pretty small, as the large majority of flights are of shorter distance.

So, eliminate the unprofitable and minimally beneficial long-haul routes, and I’ll support subsidies until the cows come home.

Whether or not the Europeans have managed to create a good rail system, it’s inherently easier to do so there. Europe is a pretty small and crowded place, so rail routes are shorter, needing less land and maintenance costs, and trains are much more competitive on time with airplanes.

Sua

19

Exploring for oil is a business expense. You tax the profits not the revenue. Or is there something more to this write off?

20

**

Isn’t that just rail systems which rely on passengers for income? I thought rail companies that primarily moved freight made profits.

**

We’ve got a huge federal and state highway system. Even if you don’t own your own vehicle or can rent one you can always take a bus.

Why shouldn’t they be expected to run at a profit? We expect the USPS to pay for themselves. Maybe the folks at Amtrak aren’t worried about efficent operations because they government keeps giving them money.

Marc