(The following article from Oxford Analytica was posted on Forbes.com on January 12.)
NEW YORK — Congress is considering the future of passenger rail service in the United States. The National Railroad Passenger Corporation–known as Amtrak–is in disarray. President George W. Bush’s fiscal 2006 budget proposed eliminating all operating subsidies, and in November, Amtrak’s president was fired by its board. Yet, Amtrak remains popular as an affordable, essential transportation link for many rural communities and operates profitably in urban areas.
Amtrak’s current problems date from its foundation in 1971, after the expansion of the interstate highway system and growth of civil aviation bankrupted most private passenger rail companies. In 1970, Congress responded by passing the Rail Passenger Service Act. The law created Amtrak and allowed private rail companies to merge their passenger service into the national system. Private railroads retained control of profitable freight service. Policymakers assumed passenger rail service would continue to decline precipitously, and that Amtrak would gradually fade from the scene.
Amtrak has survived–albeit just barely. While the system is inefficient and uncompetitive with other modes of transport in many respects, in some areas it is just the opposite. Amtrak also enjoys considerable popular and political support. This dichotomy has enabled Amtrak to continue, despite several aggressive attempts to dismantle it.
Even Amtrak’s most ardent supporters agree that the system faces major challenges. Some of these problems are the result of blunders inside the corporation. Others are not necessarily of Amtrak’s own making and are beyond the corporation’s ability to resolve without government aid:
1. Lack of accountability – A recent report by the Government Accountability Office said that since Amtrak is neither a publicly traded private corporation nor a public entity, its results are not subject to normal accountability mechanisms. As a result, financial reporting, cost containment and its ability to become self-sustaining remain opaque issues.
2. No dedicated funding – Amtrak is uniquely susceptible to the machinations of the political process in Washington. The current funding arrangement prevents Amtrak from looking beyond the next year’s budget cycle, and forces it to focus almost exclusively on the short term.
3. Political interference – As the national system is dependent on congressional support, Amtrak is essentially forced to provide extensive service to a wide variety of small cities (and congressional districts).
4. Track ownership – Amtrak owns only about 650 miles of track–mostly between Boston and Washington–within its 22,000-mile service network. Therefore, it must contend for service time with freight and commuter rail companies, which own most of the track.
5. Acela problems – In 2000, Amtrak introduced a high-speed Boston to Washington train service. However, the service has been beset by numerous technical problems.
Despite its checkered past and continuing challenges, Amtrak struggles on. However, the service is burdened by prior national policies that first sought to destabilize it, then promised half-hearted attempts to prolong it.
While options for addressing Amtrak’s future are regularly debated, two ideas have come to the fore:
Reaffirm national commitment – The compromise that created Amtrak in 1970 was flawed. Instead, Bush and the Congress could take steps to reaffirm the national commitment to intercity passenger rail by committing to a national rail service plan.
State involvement – In addition to a new federal emphasis on passenger rail, some state-level partnerships appear promising.
Amtrak’s current federal authorization expired in September 2002. Congress missed a golden opportunity to link Amtrak with other transport modes in 2005, when it passed a $284 billion surface transportation law. Amtrak and the nation’s transport network need a comprehensive, long-term solution to this perennial problem.
The debate over Amtrak’s reauthorization gives Congress an opportunity to determine the railroad’s long-term fate and the direction of reform. It is incumbent on lawmakers to decide not only what the role of Amtrak should be, but the overall place of intercity passenger rail within the transport network.