(The Washington Post published the following on its website on July 31.)
WASHINGTON, D.C. — Will Amtrak be able to get out of its budget crisis? What is the future of the passenger train?
The Bush administration recently announced a plan to turn train service over to multi-state compacts while providing federal grants for capital improvements. Also, four Senate Republicans have proposed a plan to grant Amtrak $12 billion in operating funds over six years.
Ross Capon, executive director of the National Association of Railroad Passengers, was online Thursday, July 31 at 1 p.m. ET, to discuss the federal plan for Amtrak released by the Dept. of Transportation.
Capon joined the National Association of Railroad Passengers as Assistant Director in 1975, becoming Executive Director in 1976. He edits the association’s newsletter, testifies before congressional committees, and talks with the news media about America’s need for a balanced transportation system which takes much greater advantage of the rail mode than does our present system.
His most recent Congressional appearance was April 30, 2003, at the “Current Amtrak Issues” hearing of the Subcommittee on Railroads of the House Committee on Transportation and Infrastructure.
A transcript follows.
Editor’s Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.
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Ross Capon: We agree with Secretary Mineta that passenger rail is important, but think the DOT’s plan is more likely to lead to dramatically less service than any improvement. One less remarked shortcoming of the plan is that it restricts the public’s right of access to privately owned tracks at reasonable cost to those routes and frequencies that exist at the time of enactment, making any service expansion cost prohibitive. Our full statement is at www.narprail.org. Now to your questions.
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Iowa City, Iowa: Why is enhanced rail passenger service and major federal support for it a national security issue as well as a general transportation and economic development issue?
Ross Capon: It’s more obviously a security issue now because the nation has witnessed the complete shutdown of another form of transportation (airlines 9/11). It is a general transportation issue because many people want the rail choice, and many communities have few other transportation choices.
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Harlingen, Tex.: The Administration contends that private interests are waiting to pick up some of Amtrak’s long distance routes. Can you name any railroad entity or other private interest that has indicated a desire to pick up the route of the Sunset Limited or the Texas Eagle?
Ross Capon: No. The only private interest I can imagine “waiting” to run any long-distance trains would be people who want to run very infrequent, very high-priced luxury trains a la American Orient Express. But even AOE exists only courtesy of Amtrak and its right to reasonably-priced access to the nation’s freight railroads. In any event, interest in such service would be focused on routes with more dramatic scenery.
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Chicago, Ill.: Why hasn’t Amtrak taken some obvious steps to lower costs and improve service such as contracting out on-train food service to an entity with expertise in that area?
Ross Capon: They have contracted out the on-the-ground portion of their food operation (i.e., commissaries). CEO David L. Gunn has made clear that productivity and health cost issues will be a major focus in the next round of bargaining.
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Iowa City, Iowa: Isn’t a single, national system a key to having a successful resurgence of rail passenger service in this country?
Won’t cutting up the system make it harder to use as well as punish those in less populated areas?
Ross Capon: (1) In my opinion, yes.
(2) Yes, again. Also less efficient — there is a high cost to fragmentation.
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Washington, D.C.: Amtrak has been in a perpetual financial dilemma. We always hear about how it’s strapped for cash and is in danger of being shut down, but somehow it continues to operate. How is this time any different?
Ross Capon: It is quite possible that we’ll look back and see that things didn’t change much. But Amtrak has run out of ways to paper over the problems (such as by borrowing against their assets) and expects to end the year with roughly zero cash reserves. Competition for appropriated dollars is very tough, and the nation and the world in many ways are in uncharted territories.
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Washington, D.C.: For trucks and cars, the government upkeeps roads, and the federal government pays 90% of the cost. The federal government also maintains an air traffic control network that keeps planes in the air, and local governments usually pay for airports. Why is the government not willing to take on even paying for upkeep of the deteriorating railways, and balking at paying a fraction of that spent on roads and the airline bailouts?
Ross Capon: Government responds best to the richest and most powerful political interests.
Secondarily, many people genuinely believe that the air and road systems are primarily user-financed.
The Bush Administration, under the gun for deficits, looks to put the squeeze on Amtrak because they think it is politically vulnerable. They know that on Capitol Hill the number of legislators who ride the train every week is much smaller than the number of people who fly.
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Harrisburg, Pa.: As a member of your association, it is good to ask you a question. In my Economics class, a few decades ago, the public transportation system -buses and trains- were provided as examples of parts of the economy where it is impossible to achieve profitability. Raise prices and ridership falls enough that profits can’t be reached. Decrease prices and not enough new riders appear to achieve profits. Yet, there are social benefits to keeping more people off of roads (which are paid for by the public), to provide access to people who would not be able to otherwise travel, and to allow members of Congress to conveniently travel out of Washington. Now, I hear the Bush Administration insisting Amtrak become profitable. Is that even possible? Have there been major economic changes that there is now a point where passenger rail service could be profitable? If not, what is the Bush Administration thinking?
Ross Capon: Profitability probably is not possible in this environment–cheap gasoline, cheap air fares, cheap or non-existent highway tolls. It is noteworthy that there is bipartisan support on Capitol Hill for ending Amtrak’s “self-sufficiency” mandate.
What is the Bush Administration thinking? Perhaps that they have found a way to end Amtrak without having to say that in so many words.
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Washington, D.C.: Your association is viewed by many as a sycophant for Amtrak. Does your group have any criticism whatsoever of Amtrak? Surely there is some room for their self-improvement?
Ross Capon: In a political environment that is largely hostile to passenger rail, excessive public criticism of Amtrak can backfire and be used to justify shutting down the whole thing. Now that Amtrak is headed by a CEO (David Gunn) who is widely respected, the need for (and logic behind) public criticism is even less.
A few years ago, we did call (publicly) for them to exit the express (cargo) business after its impact on operations became clear, and long before Amtrak acted.
We are not hesitant to make management aware of problems.
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Silver Spring, Md.: It seems that the administration proposal is similar to what Britain did a few years ago. Didn’t the UK plan fail spectacularly? Are there any major differences between the two that may make the Bush plan work?
Ross Capon: Yes, the U.K. plan failed spectacularly. One problem with the Bush plan is the cost of fragmentation–every new identity created needs its own president, human resources dept., etc. While DOT may not get to the British level of absurdity (almost 200 different entities performing the work of the old British Rail), there are costs nonetheless. Two big differences between the U.K. that come to mind: overall reliance on rail is much greater in the U.K. and the political consequences of railway failures much more serious; most track in the U.S. is owned by private companies whereas the U.K. (partially undoing the 1990s) essentially has renationalized the tracks. As I mentioned earlier, a big concern of ours is the DOT’s proposal to limit reasonably-priced track access rights to those routes and frequencies in existence at the time their bill might be enacted.
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Ithaca, N.Y.: A couple of years ago I took the California Zephyr as part of a Washington – San Francisco cross country trip. It was stunningly beautiful, relaxing, scenic, and took I believe 3 full days, and cost more than plane fare. I’d highly recommend it to anyone so inclined. That said, there’s clearly no way that long-haul passenger train service can compete with air travel. Why on earth should your tax dollars subsidize my cross-country vacation? Should the Alaskan cruise industry be subsidized too so they can compete more effectively with flights to Anchorage? I just don’t understand how subsidizing a forever-money-losing enterprise like (at least the cross-country portion of) rail travel.
Ross Capon: There are people who cannot fly for medical reasons, or who do not want to fly. There are smaller communities that have few or no other public transportation options.
There are issues of geographical and economic fairness. Coach passengers on long-distance trains have the lowest average incomes of any group of Amtrak passengers, and a “corridor-only” system would serve just 21 states, possibly undermining the ability to get a majority on Capitol Hill to support any intercity rail funding.
Long-distance trains serve as a foundation for develop of corridor and commuter services. For example, the existence of New York-Florida trains made it easier to start up commuter trains in northern Virginia and the Miami area.
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Washington D.C.: I believe this country does need a railroad, but how many chances can we give Amtrak. For years millions of dollars have been given to Amtrak and service has not improved, the trains are in poor condition. Maybe it is time for a change.
Ross Capon: If the current CEO gets the resources he needs and you are able to accurately repeat your statement four or five years from now, the conclusion might be widely accepted and prevail. But just when we have a veteran railroader CEO (since May 2002) who is highly respected seems the wrong time to pull the plug.
The implication that “millions of dollars” has been wasted is not accurate. A lot of those millions went into buying new equipment and restoring the Northeast Corridor, extending its electrification to Boston. Those are tangible purchases that have improved the service and–if continued–make future improvements possible.
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New York, N.Y.: What is your view of some kind of national trust fund (similar to the one that exists for highway funding) to provide a politically isolated dedicated source of revenue for Amtrak? It seems like Amtrak could be much more effective without needing to worry about political pressures (such as running trains through influential senators home towns), or questions about how much money they will receive each year.
Ross Capon: We would love to see a portion of the gasoline (or aviation) tax earmarked for Amtrak but that seems very unlikely for the moment. It would only be conceivable in event of a tax increase, and the Bush Administration’s opposition to a gasoline tax increase seems quite ironclad. Tax credit bonds, as in H.R. 2751 and the bill Sen. Hutchison introduced yesterday, are not as cost-effective but may be the only doable alternative. They would provide funds for capital projects chosen by states, with states also paying for a portion of the projects.
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Dallas, Tex.: Isn’t train travel too expensive, too slow and virtually obsolete for any location outside of the northern half of the east coast? And why are you asking yourselves your own questions? Do you really think we’re going to believe that some dope in Iowa City, Iowa knows that much about train travel to ask such a wonkish question?
Ross Capon: California’s Capitol Corridor (Sacramento area-Bay Area) didn’t exist 15 years ago and had over a million riders last year. California has two other successful corridors, and Secretary Mineta cited the Oregon-Washington corridor as another success story. These don’t involve particularly fast trains; success has been based on attractive equipment and stations, and frequent service. Further Midwest development is likely if a federal matching-funds program ever gets enacted.
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Harrisburg, Pa.: The Keystone (Harrisburg-New York) train has no food service. I have written Amtrak, my member of Congress, and had a letter to the editor published suggesting they hire a person from the welfare to work program to at least offer maybe a few canned drinks and prepared food (I understand there is not the room for a food service.) Is there anyone else I can keep making this suggestion to? Is this the only Amtrak line that does not offer food and drinks?
Ross Capon: No food service on the Chicago-Grand Rapids train, Springfield-New Haven shuttles, and some New York-Phila. trains.
On the Chicago-Milwaukee run, after some years without food service, they put on a cart that goes down the aisle (like some of us remember from pre-Amtrak days). I’ll ask about that for New York-Harrisburg.
I’m guessing use of welfare-to-work program would create major labor relations problems.
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Jacksonville, Fla.: Not so much a question as a “hooray for your efforts”. I cannot imagine not having the passenger train alternative. I hope the future also sees service direct between Chicago and Florida.
J. H. Sullivan, retired, member of NARP
Ross Capon: Thanks. Share your hope but not holding my breath.
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Washington, D.C.: I was looking to take the train from DC to Albany New York. The price was almost $200 while a flight there cost at least $50 less (Southwest air). I would use the train to go up and down the east coast, but the prices have to be competitive with the airlines.
Ross Capon: Amtrak is under constant pressure to maximize revenues, but many believe that NEC fares have gotten out of hand. Amtrak had raised fares local to the Springfield-New Haven market into the stratosphere, recently lowered them, and discovered riders came back. Hopefully we’ll see more of that.
In any event, special deals are offered at various times at www.amtrak.com, see especially “Rail Sale”.
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Bethesda, Md.: To what degree do you believe Amtrak is responsible for its current state of poor service?
Ross Capon: A lot of the Northeast Corridor delays are a function of the neglected infrastructure that David Gunn keeps talking about. If you encountered a surly conductor or service attendant, that’s another matter…
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Washington, D.C.: How does Gunn compare to other Amtrak presidents?
Ross Capon: He is the ultimate straight shooter. So far that has served him–and Amtrak–well. Many people compare him to Graham Claytor, who also was known as someone not afraid to call the shots as he saw them, without worrying too much about whether it made legislators uncomfortable. Most of the people that I know love working for him.
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Lake City, Fla.: How much of Amtrak’s much-touted (by critics) $1 billion loss is service on the debt incurred by the railroad over the years?
Ross Capon: Amtrak says its FY 2004 budget requires $162.9 million for interest and $116 million for principal, so that’s a total of $278.9 million debt service.
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Roanoke, Va.: At a high level why does it make sense to run a national passenger service if the market won’t support it and in effect each train seat is subsidized hundreds of dollars of tax payer money? Isn’t Amtrak just putting the private bus systems at an unfair disadvantage?
Ross Capon: All modes are subsidized. A recent Brookings Institution report says 41% of highway spending comes from non-user payments. About half the cost of FAA Operations right now comes from general fund, not air user taxes.
Buses and trains should work together and increasingly are. In 1971, when Amtrak’s formation shut down half the nation’s intercity passenger trains, bus ridership went down not up. Amtrak has lots of interline ticketing agreements with Greyhound and other bus companies, under the “Thruway” banner. A huge part of California’s successful rail development program is a network of buses that take people to places the trains don’t go.
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Stuart, Fla.: In reading about the administrations plan one aspect that they constantly bring up is separating the operations and maintenance functions on the North East Corridor. This was tried over in the UK with debatable results, news reports indicate it is generally held as being a complete failure, especially as regards coordinating train operations with maintenance. Do you have any comments about this aspect of the plan?
Ross Capon: Normally, in most parts of the world the dominant carrier owns and controls the tracks. That’s how every major freight railroad and the biggest commuter railroads are organized. That’s how the Japanese railroads are organized. Amtrak is essentially the dominant user in the NEC (after taking proper account of the very short distances Long Island Rail Road trains travel on it), so the present set-up and not a more complex alternative makes sense to me.
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Washington, D.C.: Why can’t the current railroad system be changed to reflect the organization of the airline system? Since the airports are publicly funded and run and private companies provide the actual transportation, why can’t that work for rail transportation? Wouldn’t that promote competition between companies which would, in turn, lower costs to passengers and enliven this form of transportation?
Ross Capon: No one seriously expects the privately-owned rail rights-of-way to go public, except in limited situations where passenger is dominant user, such as already happened between Fullerton and San Diego.
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Springfield Mass.: Do you think that there will be a long term solution for Amtrak, or just a continuation of just enough to get along? And will Gunn push the issue?
Ross Capon: A long term solution is possible at the time of the next major (e.g., six-year) highway/transit reauthorization. That’s probably not this year.
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Alexandria, Va.: I took the train from D.C. to Philly a lot last year and was wondering if there are any plans to change the track layout in Baltimore. They snake around so slowly that it seems like 30 minutes of the trip are just getting through that city. I don’t think it would be too hard to acquire land around the tracks so that they can be straightened considering that everything around it is run down and uninhabited.
Ross Capon: The biggest issue is 30 mph or so in the tunnels approaching the stations from both sides. I’m not aware of any near-term change in that.
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Washington, D.C.: What could Amtrak operate with the $900 million proposed by the Bush administration?
Ross Capon: Gunn has been clear that a $900 million level is a shutdown level.
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Stuart, Fla.: Do you have any idea how this latest plan would affect the Rail Corridors Initiative? From what I understand from newspaper reports this appears to be what the administration is looking for in terms of it’s multi-state compacts. However from reading yours, and others, responses any fragmenting of the current national level of passenger service would render these moot as there would be no coherent system for them to connect to. I find this odd as several of the regional corridors, especially the one in the southeast seem to be moving ahead quite rapidly.
Ross Capon: I’m not aware of “rapid movement” in the Southeast, but I agree with your analysis.
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Kensington, Md.: Given the fiscal crises that the vast majority of states currently face, it seems to me the administration is avoiding taking responsibility for the demise of passenger rail in this country by shifting the fiscal responsibility to the already overburdened states. Are there any states that might actually be able to support the continued operation of rail? And, what happens when one state is willing to pay and the neighboring state isn’t?
Ross Capon: Senators Lott and Hutchison yesterday both pointed out the absurdities that would result when every state along a route doesn’t sign up. I question whether we’ll get a true answer to your first question until it’s too late. If Amtrak really disappeared, I guess one could imagine Metro North extending to Albany, for example, but then again given the fiscal crises of the states, who knows?
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Asheville, N.C.: Why is this country so slow to realize the importance
of train transportation? Don’t we need the right
politicians to get the ball rolling? It’s ridiculous. We
should be using Europe and other places around the
world as an example. Don’t you feel?
Ross Capon: Yes, and I would note the impressive number of legislators who agree with us, on both sides of the aisle.
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Nipomo, Calif.: What incentive would a private operator have to invest in equipment and track improvements if they had to bid periodically for a contract with no assurance of success?
Ross Capon: That is a big problem with this concept, and has been a big problem in England and elsewhere.
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Baltimore, Md.: Is there any way to more directly compare how much the Federal government subsidizes highway and air travel compared to rail? A per mile per passenger number would help in this debate.
Ross Capon: Hard to get figures everyone would agree to. For example, many people believe that no gasoline-tax dollar spent on highways is a subsidy. Other people argue that government interpretation of every gasoline tax dollar as a vote for more highway investment, rather than on the best solution to the problem at hand, is a bigger problem than direct subsidies.
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Bloomfield, Connecticut: Why is it the media and people in general have a perception that only Amtrak is subsidized by the government when the government pours billions into highways, and aviation without which Southwest Airlines and Greyhound etc, etc., could not even exist?
Ross Capon: I think that’s changed in recent years regarding the airlines. The Brookings report will change the highway perception too.
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Norman, OK: Good morning.
As you say, there are other modes of transportation that are unprofitable but are subsidized.
In fact in an age when the government is issuing new terror alerts about possible airline hijackings, they should be willing to subsidize AMTRAK to the fullest.
Even without the alerts, I don’t understand why a airlines that charges $1800 (on walk-up) to go coast-to-coast is subsidized, while they expect AMTRAK to be profitable.
(I know I can go coast-to-coast on AMTRAK, for roughly $400 walk-up.)
It is unrealistic to expect AMTRAK to be profitable. It should be a service as are highways and libraries.
In fact, here in Oklahoma, there were plans to expand AMTRAK, but those plans were (pardon the pun) effectively derailed.
Anyway, is there anything I can do to help?
I know writing officials and politicians is always suggested, but does that really work?
Aren’t they going to do what the want, no matter what the public wants?
Thank you.
Ross Capon: It does work. Politicians care what their OWN constituents think. Snail mail is too slow these days and they are overwhelmed with e-mail. The best solutions are FAX or telephone. Be sure to include your regular snail-mail address, and do e-mail if you can’t do anything else.
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Jacksonville, Fla.: Why hasn’t the United States, the world’s singular superpower, modernized its public transportation and railways to match that of China, Japan, and Europe? What are we waiting for?
Ross Capon: History of heavy emphasis on the private sector. Other countries tend to ask “how do we solve this problem.” We tend to say if the private sector can’t do it, it may not be worth doing.
And of course we have created an artificial platform in aviation and highways on which “private” carriers can operate.
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Arlington, Va.: Is there anyone who publicly thinks this is a good idea? Is there any rational behind this? I can only come up with something in the conspiracy sense that this is designed to pass the buck to the states. (In cash, or more likely the political capital to close down Amtrak).
Ross Capon: Bingo. But, yes, I understand Ohio DOT likes it.
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Oakland, Calif.: I am a transportation professional and I work in ITS and Demand Management. Having worked on two commuter rail starts in California, I am convinced that the only way to make passenger rail work in the US is to federalize the tracks. What do you think of this idea? My rational is that roads, bicycle facilities, and many pedestrian facilities are owned by either state or federal government. Is it not in the public interest for rail to be as well? Goods are moved on freeways too.
Ross Capon: It is going to take a long time before the major freight railroads cotton to public ownership of their tracks. It may never happen, or Wall Street (which is already pressing the railroads to get creative about solving their $$ infrastructure problems) may someday realize that the railroads own too many old bridges for the marketplace to support by itself.
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Potomac, Md.: Why does the administration think that less than a billion dollars is sufficient to meet Amtrak’s requests when it gave billions to airlines. Personally, I enjoy trains more than planes, well in the NEC.
Ross Capon: I guess the Administration doesn’t think the long-distance trains should exist, and wants someone else (states) to pay for the short-distance trains. Trying to shift the burden elsewhere is not exactly new in politics!
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Washington, D.C.: Knowing that most states have no extra dollars to put into Amtrak, do you think that the administration’s plan is simply a ploy to completely dismantle Amtrak without having to explicitly state that this is their plan?
Ross Capon: Yes.
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Rockville, Md.: No public metro (commuter) rail system covers its operating costs – forget capital costs (right of way, laying track, stations, etc.). San Diego is as close as anyone covers, with fares covering about 90% of operating costs – I think, the numbers may be a few years old. (I believe that Washington DC Metro covers 50-60% of operating costs with fares, but I may be wrong about that, too.) What fraction of its operating costs does Amtrak revenue cover? Doesn’t it break even on the Northeast corridor?
Ross Capon: The FY2002 consolidated financial statement shows $2.2 billion in revenues and $3.2 billion in costs (of which $501.5 million is depreciation). $995 million loss from operations. “Net loss $1.1 billion.”
I believe it comes close to (or may actually) break-even in the Northeast Corridor “above the rail” but definitely not including the infrastructure costs.
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Washington, D.C.: Since the airlines are so heavily subsidized by federal bailouts and loans, why does Amtrak price itself based on a profit expectation? I think the cost for service is way too high in the northeast corridor, where rail that goes to the city center has the advantage over airports outside of town.
The government spends $1 billion a week in Iraq and hasn’t found any WMDs. That money should be spent here at home where it can do some good for Americans.
Ross Capon: Amtrak’s general goal is to price to maximize revenues. They don’t really have a choice on that, given the political environment in which they operate. But I agree with your implication that they may be overshooting in the NEC.
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Bainbridge, Ga.: I love train travel, but here’s one major reason I won’t use Amtrak: Tallahassee, right down the road from me had an opportunity to locate the Amtrak station in several locations when passenger service was reinstated there about ten years ago. They chose to locate the station in a high crime area of town. On top of that the west bound train pulls in to this dangerous part of town at 2am.
Is it any wonder nobody uses Amtrak around here? Than and you can get on any travel website and get cheaper airfares than most train tickets.
Ross Capon: When you run one long-distance schedule, some place is going to be served at a bad time. However, my timetable says the westbound train at Tallahassee is 9:01 pm, eastbound 12:32 pm.
Stations should be the primary responsibility of the city, but I can understand a hard-pressed city may not be able to justify more investment for six departures per week.
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Washington, DC: I always thought Amtrak’s financial woes were linked to the ownership of the rails? I thought I read that in a previous article?
Ross Capon: Ownership of the Northeast Corridor is certainly a major financial responsibility. But what has kept Amtrak going is primarily a mix of capital subsidies to the Northeast and operating grants to the rest of the country. Pull apart those elements and you may not have anything left.
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Cary, NC: What makes you think Amtrak or any national rail system can work after all these years of repeated failure and almost $300 million per year of debt service ?
Ross Capon: The debt service in a sense is a function of past managements papering over financial problems. That’s not Gunn’s and anyway Amtrak is no longer allowed to do it. I think a lot of things are going right at Amtrak, and feel I’m in good company with many legislators who see a future for the system.
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Alexandria, Va.: Most big Airports I see have these signs claiming “80,000+” jobs created and $12+ Billion in economic growth for the region. Why wouldn’t the building of a real national rail system not do the same? Lots of construction jobs and economic revitalization. Why is this not an easy sell? Is it the highway and airline lobbies?
Ross Capon: Probably, yes. And the fact that the budget is already in such serious deficit and this Administration seems to believe the only engine for growth is the private sector.
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Washington: If the federal government picked up the entire tab for infrastructure upgrades and maintenance, would Amtrak be able to attain a balanced budget from its rail operations?
Ross Capon: In the Northeast Corridor probably. Elsewhere, a function of what condition the infrastructure is in.
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McLean, Va.: Why has Amtrak had so many difficulties getting funding over the years?
Ross Capon: Controversy over whether trains are needed, and–at different times–whether the structure is right, whether the management is adequate.
No big political action committees support Amtrak.
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Ross Capon: Thanks for your interest!
(Ross Capon is Executive Director of the National Association of Railroad Passengers.)