After months of delay, this is the best passenger rail “plan” the Bush administration could come up with?
Rail advocates have low expectations after decades of federal neglect of Amtrak. But the five-principle plan Transportation Secretary Norman Mineta revealed yesterday isn’t really a plan at all, according to an editorial by Bill Stephens of Trains.com.
It’s more like doodles a bored manager draws on the margin of a memo during an office meeting. There’s simply no there, there. No wonder the administration was in no rush to reveal it, and had backed out of a congressional hearing where it was to be discussed in April.
Make no mistake. This isn’t a plan for passenger rail. It’s a plan against passenger rail.
You wouldn’t know it from the high-sounding words that Mineta used yesterday in his speech before the U.S. Chamber of Commerce.
“I believe it is time to recognize the role that intercity passenger rail service can play in America’s transportation system, to offer a comprehensive vision for the future of intercity passenger rail, and to set out a proposal that offers an alternative to the previous 30 years of Amtrak history – a vision worthy of a passenger rail system that plays a sustainable role in the national transportation network,” Mineta said.
Vision? About the only vision this plan has is shortsighted.
The era of building interstate highways and additional airport runways is all but over. There’s a growing consensus among transportation planners that rail will play a vital role in maintaining America’s mobility in coming years.
Yet the Bush administration proposes a plan that would gut intercity passenger rail service.
Let’s review the plan, point by point.
In his speech, Mineta correctly noted the fiction that Amtrak could become operationally self-sufficient, as Congress had proposed in 1997. The solution – the Bush administration says in logic that defies explanation – is to eliminate federal operating subsidies.
This is absurd. If it’s fiction that Amtrak could become operationally self-sufficient, how can it be any less fanciful that passenger rail can survive without federal operating support?
The answer is that it can’t. At least not without massive route cutbacks and/or support from the states. The states are struggling with budget shortfalls approaching $40 billion, according to Sen. Patty Murray, D-Wash., so they aren’t going to ride to Amtrak’s rescue.
Neither will private operators. They won’t step into the void unless they believe they can make a profit. Remember that under Amtrak’s twisted definition of profitability, only the Acela Express/Metroliner and Heartland Flyer showed a profit last year. Under any rational business definition of profitability, not a single regular Amtrak route is profitable. None.
This leads to two inescapable conclusions. First, Amtrak – if it survives beyond next week – will have to slash all its routes. Second, there will be no one to pick them up.
Thus the administration’s drive to create market-driven passenger rail service without federal operating subsidies is sure to fail.
The Bush plan sees savings from making Amtrak solely an operating company. But this is a shot in the dark. A gradual separation of operations from infrastructure, Mineta contends, will “shed better light on the true economics on passenger rail.”
If the administration had more patience, Amtrak President and CEO David Gunn’s effort to make the railroad more accountable – and its accounting more transparent – will produce the financial details Congress, the White House and Department of Transportation have been seeking for years. Instead, the administration proposes knocking down the house Gunn’s new broom is promising to sweep squeaky clean.
Separating a railroad’s operating and infrastructure functions also poses serious problems. The goals of an operating company and an infrastructure company are always in tension. The infrastructure company wants to keep its costs low and has no incentive to make the investments necessary for the operator to provide good service.
And then there are the lessons to be learned from the failed British privatization and infrastructure separation model. The British approach has proved that it is flawed – and fatally so, judging by the rash of disastrous wrecks produced by the crumbling system. Amtrak is under a Federal Railroad Administration safety watch now. Separating operating and infrastructure functions could lead to a death watch later, if Britain is any guide.
Another odd point in the plan is the call for “carefully managed” competition. That’s an oxymoron, as any free-market economist will tell you. Certainly savings could be achieved through franchising out various Amtrak functions, like the reservations system and equipment maintenance. But it’s pure fantasy that private operators could bring down the cost of operating trains and still turn a profit.
The plan also advocates establishing a partnership between the states and the federal government to support passenger rail, and a separate partnership to manage the Northeast Corridor. What this unprecedented arrangement would do is shift leadership from the federal level to the states. This is exactly backward.
For other modes, Uncle Sam takes the lead and the states follow – which is only natural since transportation on this scale is about interstate commerce. And the funding formula is usually a 90/10 or 80/20 federal/state split. The Interstate highway system never would have been built if the squabbling states had been in the driver’s seat.
The Bush plan continues to measure passenger rail with a different yardstick. No other mode is required to turn a profit despite federal subsidies. Yet the White House clings to the rail profit myth that was begun with the creation of Amtrak in 1971.
Amtrak critics complain that the highway and aviation trust funds are paid for by the users of highways and airports. Amtrak, they point out, receives direct operating subsidies that the other modes don’t.
This is true. But it’s only half the story. The point these critics miss is that the federal government wisely spent billions over several decades to build highway and aviation infrastructure before those trust funds were created. The systems had to reach a critical mass before they could become self-sustaining through the trust funds, which are merely another way to subsidize transportation.
If the administration and Congress followed this model – and invested in Infrastructure while continuing Amtrak operating subsidies – there would be a glimmer of hope that a privatization scheme could work someday.
But no such investments have been made in the passenger rail infrastructure. And Amtrak intentionally let its system slide into disrepair in a futile – and foolish – attempt to meet the December 2002 deadline for reaching operational self-sufficiency.
What’s left is a system incapable of supporting fast, frequent and reliable passenger service.
Despite being chronically underfunded, Amtrak can take its share of the blame for this situation. For years it has been a bloated bureaucracy that lacked accountability and responsibility for how it spent public money. The previous management misled Congress, the public and Amtrak’s employees. And as Gunn has said, Amtrak cried “uncle” much too late, putting the entire system at the very real risk of a shutdown.
Both parties can take their share of the blame, too. Few in Congress – and no occupant of the White House, Republican or Democrat – paid attention to Amtrak over the past three decades. But the responsibility for the looming Amtrak train wreck will land right at the doorstep of the Bush administration, which has been slow to react to the crisis.
To avoid such a legacy, the White House can do three things.
First, it can prevent the immediate problem of an Amtrak shutdown. This wouldn’t be the first time Bush could act to save passenger service. In May 1997, as governor of Texas, he signed legislation that authorized the state transportation department to loan Amtrak $5.6 million to preserve the Texas Eagle. Bush’s director of transportation policy was Alan Rutter, now head of the Federal Railroad Administration. Amtrak paid the loan back early.
Second, it should listen to the blunt-speaking Gunn and let him straighten Amtrak out rather than shut it down. Gunn will succeed if the White House and Congress don’t stand in his way.
Finally, the administration must do a reality check and shelve its passenger rail plan. It is never likely to gain congressional support, and has about as much chance of success as sticking wings on a Superliner sleeper and expecting it to fly.