Friday, February 22, 2008
Amtrak - Everyone's Favorite Whipping Boy
A couple weeks ago, the President submitted his budget to Congress. Among the thousands of programs to be funded in the proposal, there's a $900 million dollar request for Amtrak.
That sure sounds like a lot of money for a struggling railroad. Problem is, it's about half what the railroad actually needs. And the proposal is almost 50% less than the 1.3 billion that Congress was able to force through last year. The national passenger railroad has never been profitable and probably never will be. But, as critics like to conveniently ignore, there are good solid reasons why.
When the Amtrak consolidation started in the 1970s, big railroads like Santa Fe and Union Pacific started threatening to shut its passenger services down and concentrating on the much more profitable rail routes. The federal government bailed out these railroads by allowing the services to be spun off into a quasi-public service. What a sweet deal for the railroads. No longer beholden to the governments that helped them put their rail operations in place, the old railroads gave up their passenger rights to Amtrak and gets to charge the carrier rent for using its track.
In the meantime, Amtrak doesn't have the funding to maintain its rolling stock, and having to rely on other railroad's track doesn't allow the railroad to improve its on time performance or average speed from stop to stop. Couple this with much of its funding from state and federal government becoming reliant on running unprofitable routes on a regular basis.
Something finally gave in the last year or two, with the train line basically threatening to shut down most of its operations without increased funding, Congress gave in, authorizing 1.3 billion last year, enough to actually allow Amtrak to start working on capital projects and might mean long proposed high speed rail lines between places like Chicago and Detroit may actually inch closer to reality.
Better times may be on the way for Amtrak. If the President gets his way, Amtrak will be returning to its traditional role of being the red-headed whipping boy model of government malfeasance with subpar performance and quality. However, the Senate is aiming to give Amtrak 2 billion dollars in funding. A mere pittance when you consider that the budget is measured in trillions these days. But that 2 billion would be well spent to update its rolling stock and improve the portions of track that it does own in the Northeast.
That sure sounds like a lot of money for a struggling railroad. Problem is, it's about half what the railroad actually needs. And the proposal is almost 50% less than the 1.3 billion that Congress was able to force through last year. The national passenger railroad has never been profitable and probably never will be. But, as critics like to conveniently ignore, there are good solid reasons why.
When the Amtrak consolidation started in the 1970s, big railroads like Santa Fe and Union Pacific started threatening to shut its passenger services down and concentrating on the much more profitable rail routes. The federal government bailed out these railroads by allowing the services to be spun off into a quasi-public service. What a sweet deal for the railroads. No longer beholden to the governments that helped them put their rail operations in place, the old railroads gave up their passenger rights to Amtrak and gets to charge the carrier rent for using its track.
In the meantime, Amtrak doesn't have the funding to maintain its rolling stock, and having to rely on other railroad's track doesn't allow the railroad to improve its on time performance or average speed from stop to stop. Couple this with much of its funding from state and federal government becoming reliant on running unprofitable routes on a regular basis.
Something finally gave in the last year or two, with the train line basically threatening to shut down most of its operations without increased funding, Congress gave in, authorizing 1.3 billion last year, enough to actually allow Amtrak to start working on capital projects and might mean long proposed high speed rail lines between places like Chicago and Detroit may actually inch closer to reality.
Better times may be on the way for Amtrak. If the President gets his way, Amtrak will be returning to its traditional role of being the red-headed whipping boy model of government malfeasance with subpar performance and quality. However, the Senate is aiming to give Amtrak 2 billion dollars in funding. A mere pittance when you consider that the budget is measured in trillions these days. But that 2 billion would be well spent to update its rolling stock and improve the portions of track that it does own in the Northeast.
