PORTLAND, Maine — Brinkmanship is no way to run a railroad, according to an editorial in the Portland Press Herald. Yet, that’s exactly the route that Amtrak, the nation’s passenger rail service provider, is on as it barrels toward a final showdown this fall between its supporters and critics in Congress.
The most recent crisis was a classic example of “who will blink first?” Amtrak president David Gunn threatened to shut down the service at the end of June unless the federal government gave it a $200 million loan to help it close a budget gap in the current fiscal year. The first system-wide shutdown in Amtrak’s 31-year history looked inevitable as the Bush administration insisted on substantial reforms before providing the service with the money it requested.
With just 48 hours before Gunn’s deadline, however, the two sides reached a tentative, short-term agreement: Amtrak would get an immediate $100 million loan and the administration would help it get another $100 million from Congress to keep the trains running. In return, Amtrak agreed to 12 conditions, including clearer accounting reports, a 15-month moratorium on developing new routes and a freeze on management salaries and bonuses. It must also identify $100 million in potential budget cuts and savings by the end of August.
This game of chicken may be the only way to forge a working compromise between Amtrak friends and foes in Washington, D.C., but it’s a real disservice to the 750,000 train riders who use the system every day. What Amtrak deserves is a long-term plan – and a long-term funding commitment – to improve and expand the role that rail plays in meeting the nation’s transportation needs.
AMTRAK WAS CREATED in 1971 as a for-profit government entity (it’s actually the National Railroad Passenger Corporation) with a monopoly on most intercity train routes. Today it serves more than 500 stations in 46 states, operating both long-route transcontinental trains and, in the Northeast Corridor, most regional commuter trains. More than 23.5 million riders board Amtrak trains each year, including those riding the new Portland-to-Boston Downeaster.
The original plan was to provide the service with federal operating subsidies for a few years until it became profitable. Given that Amtrak was the government’s solution to relieving freight railroads of the economic burden of providing passenger service, however, expecting Amtrak to break even or make money without a subsidy was – and remains – unrealistic.
This year, Gunn says the service needs at least $1.2 billion to operate through September 2003. “Most of our trains lose money and they always will,” he warned members of the Senate’s Appropriation subcommittee on transportation in June. “But we can run them more efficiently. That is an achievable goal. Pursuing self-sufficiency was not.”
Unfortunately for Gunn, reaching self-sufficiency is the law of the land. In 1997, Congress enacted the Amtrak Reform and Accountability Act which, among other things, required the service to break even within five years or have its assets liquidated. Last November, the Amtrak Reform Council informed Congress that the service would not meet the self-sufficiency requirement in 2002 and drew up plans for what it calls “a rationalized and restructured national rail passenger system.”
WHILE SOME AMTRAK supporters have characterized ARC’s plan as “anti-passenger rail,” there’s a lot in it that makes sense. The plan notes, for instance, that owning the rails in the Northeast is a difficult proposition for Amtrak because it has never received the money needed to maintain and improve the corridor’s capital needs. It also calls for a local, state and federal government partnership to provide stable and adequate funding for a restructured National Railroad Passenger Corporation.
The new NRPC would be an administrator, not an operator, of passenger rail service. It would eventually permit franchise-based competition, allowing companies to bid on five- or 10-year contracts to provide rail and maintenance services. While some profit-making lines would go to the highest bidder, the ARC plan says money-losing lines could be awarded on a negative-bid basis – the company requiring the least subsidy would get the bid. We believe that some measure of competition would improve both passenger rail efficiency and customer satisfaction. At the same time, however, passenger rail service is a national asset that the federal government has a responsibility to maintain. There are good reasons, in fact, to expand rail service.
Since the terrorist attacks of Sept. 11, for example, passenger rail has outpaced airlines in new ridership growth. When the nation’s air system was shutdown to deal with its vulnerabilities, Americans returned to train travel in droves. Maintaining transportation alternatives should be part of our nation’s homeland defense.
An expanded high-speed passenger rail system will also be important in both the Northeast and the West Coast, where airports and interstate highways are near (and in some places have exceeded) capacity. It’s extremely expensive to build new airports, and politically difficult to expand existing ones, so a high-speed rail alternative along existing corridors may be the least costly way to absorb the inevitable growth in travel miles.
As it considers Amtrak’s future, Congress shouldn’t frame the issue as a “subsidize or privatize” question. Every national passenger rail service in the world receives government support to supplement fares. Every other mode of passenger transportation in the United States, including highways, air traffic and even cruise ships, is subsidized through grants, loans or infrastructure development.
Instead, Congress ought to develop a long-term, intercity transportation plan that puts passenger rail on par with other mass-transit modes. For instance, establishing a rail trust fund, as advocated by the National Association of Railroad Passengers, would mirror similar funds that finance both the capital and operating costs of highway and air systems. It should also transfer title of Amtrak’s own rail assets to the federal government, which would then be responsible for improving, maintaining and upgrading tracks.
At that point, it may make sense to put passenger rail service – the actual business of moving people from city to city – into a competitive environment. Even if the competition model can’t engineer a profit on every line, it may help create a system worth subsidizing.