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Amtrak: The Perpetual Failure Machine
[June 20, 2002]

By S. M. Oliva

Today I watched a bizarre spectacle. Attending a hearing of the Senate Appropriations subcommittee on transportation, I bore witness as, one-by-one, five United States senators of both political parties made the case for subsidizing perpetual failure. I saw them explain why a corporation that has accumulated $4 billion in debt, not made a dime of profit in 30 years, and is literally a month away from bankruptcy should be rewarded with more than $1 billion in American taxpayer dollars. Of course, I could only be talking about Amtrak.

The purpose of today's hearing was to hold the Bush administration's feet to the fire over Amtrak's most immediate problem: The railroad will have to shut down all operations at the end of July if they don't get some cash to pay the bills. The administration is considering Amtrak's request to guarantee a loan (the railroad has no substantial left assets to mortgage, aside from the Northeast Corridor infrastructure), but barring that, Congress is expected to attach an emergency appropriation to the supplemental bill now before legislators, money that was supposed to be earmarked for anti-terrorist activities. The White House has threatened a veto over this, but considering they failed to veto campaign finance "reform" and farm subsidies, why would they stop financing of a failed railroad?

Sen. Patty Murray, Washington Democrat, chaired today's hearing, which began with nothing less than a rant against the administration by Sen. Robert Byrd, West Virginia Democrat. To say the octogeneraian Byrd's remarks were babbling and incoherent would be an insult to the truly babbling and incoherent. At one point, Senator Byrd kept declaring "This is not a monarchy!", as if continued subsidies for Amtrak were the only thing standing between the George Washington and George III.

Senator Murray was more lucid, if not less irrational: "I want Amtrak to succeed. I believe that intercity passenger rail service plays a critical role in easing congestion in our country. I think it's an important travel option for the American public."

Funny how the American traveling public doesn't agree. All—not just some—of Amtrak's long-distance train routes are losing money, with no prospects profitability. The only Amtrak route which is self-sufficient, and thus actually meeting a consumer demand, is the Northeast Corridor, which extends roughly from Boston to Richmond, Virginia.

Yet the fact that any part of Amtrak is functioning well raised the ire of Sen. Kay Bailey Hutchinson, Texas Republican. She demanded—and received—assurances from Amtrak's president that the railroad would not be divided into two parts—the self-sufficient Northeast Corridor and everything else.

In fact, all five senators present at today's hearing in essence apologized to Amtrak for having demanded in the past that the railroad become self-sufficient. From Sen. Murray on down to Pennsylvania Republican Arlen Specter, the subcommittee members said it was "unrealistic" to ever believe Amtrak could sustain itself, and that America was condemned to follow the example of every other nation, which subsidizes passenger railroad to some extent.

Sen. Richard Durbin, Illinois Democrat, waved the bloody shirt of of 9/11, saying that without Amtrak, he would have been unable to get to Chicago on September 12 in the absence of air transportation. Apparently, Sen. Durbin has never been introduced to the automobile or the bus. Even still, is he seriously arguing we need to throw $1 billion a year down the drain just to ensure we have trains in the event of a major catastrophe? If that is the case, then the U.S. transportation grid must be in some serious trouble. Interestingly enough, individuals and private industry don't seem to share the senator's concerns, as they still haven't patronized Amtrak even in the aftermath of 9/11.

Not one senator today had the courage or the clarity to stand up and call for the death of Amtrak. It's not that they fail to understand that the company will never be successful; in fact, they're celebrating it as reason to continue subsidizing its operation. Sen. Murray dismisses any talk of privatizing the company: "It's not clear to me who will want to buy a company that is carrying over $4 billion in debt. Perhaps the Administration knows someone who does."

It's not clear to me, senator, who would want to throw $4 billion into an operation you know will never turn a profit or even break even. Oh, right, I guess I do know who would want to do that.

Finally, the most laughable moment had to be when Amtrak's president assured the subcommittee that, while he knows he can never turn a profit, Amtrak was committed to cost-efficiency and solid management practices. What's the point? If failure is an inevitability, what merit is there in failing efficiently? Sound financial management is not supposed to be an end unto itself, but a means by which a company competes to be successful. Since Amtrak is neither competitive or successful, saving a few dollars here and there will only serve to further illustrate the sheer irrationality of Amtrak's pathetic existence.

 

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