Editorials

Even should high gasoline prices encourage more riders of Amtrak, the national passenger train service to select areas of America, it is difficult to justify the costliest bailout in 40 years of federal subsidies.

Members of the House are considering the option of supporting or rejecting the Passenger Rail Investment and Improvement Act of 2008 (H.R. 6003) this month. The Amtrak reauthorization bill would substantially increase taxpayer subsidies beyond the extremely generous levels already provided, said Ronald D. Utt, a Heritage Foundation analyst.

Amtrak complains about the small percentage of federal transportation spending it received, but the amount is several times higher than its fair share given that Amtrak carries less than one-half of 1 percent of the nation's intercity passengers, Utt noted.

Even more inequitable is the per passenger federal subsidy, which the U.S. Transportation Department calculates at $210.31 per passenger per 1,000 miles for Amtrak passengers compared to $6.18 for those using commercial airlines.

H.R. 6003 would tilt these inequitable subsidies even more in Amtrak's favor. Amtrak will get a $1.35 billion federal subsidy in fiscal year 2008 and the bill would increase the annual bailout to $2.2 billion in fiscal year 2009 and $2.6 billion in 2010.

Over the five-year life of the legislation, taxpayers would provide $12.8 billion for the benefit of a tiny share of the nation's travelers using the system, Utt said.

Suggested as a better policy would be to limit Amtrak's annual subsidy to $900 million per year and link the receipt of that subsidy to a requirement Amtrak fill more than half of its seats on an annual basis.

Since Amtrak was started in 1970 more than $30 billion in taxpayer money has gone to benefit a tiny fraction of the traveling public and its overpaid workforce, Utt pointed out.

"Despite this massive subsidy and endless promises of improvement by a series of recent managers and board members, Amtrak is no closer to service sustainability today than it was 38 years ago," Utt declared. In large part, he added, this is because its passengers value the service at only a fraction of what it costs to provide.

Losses have gotten worse through the years. In fiscal year 2007, Amtrak collected $1.7 billion in passenger ticket revenues but incurred costs of $3.2 billion to serve those passengers. The annual loss of $1.12 billion was up from $1.07 billion the previous years and was covered by taxpayers.

Neither Congress nor the White House is likely to agree on shutting down Amtrak and encouraging its passengers to shift to buses and hybrid automobiles, Utt observed. And there appears to remain a great deal of public sentiment for keeping a semblance of passenger train service.

What might be considered, Utt suggested, is a plan to cap and then reduce Amtrak's burden on the taxpayers in a process that also would significantly improve performance.

By linking Amtrak's subsidy to performance, Congress could stimulate its officials to work at increasing its load factor (the percentage of seats occupied), because that is the most cost-effective performance measure.

Setting reasonable goals would pressure Amtrak managers to shift their focus from congressional lobbying and obsolete train schedules to passenger satisfied and meaningful transportation options, Utt said.

Utt predicts transportation challenges facing the United States over the next several years "will be unprecedented in their scope and difficulty. As congestion worsens and undermines the economic vitality of some metropolitan areas, voter skepticism about the competence of federal and state transportation officials increases and in the process discourages efforts to increase public resources available for transportation investment."

Legislation such as the huge Amtrak bailout would deepen that skepticism, he believes.

A streamlined, more efficient Amtrak could preserve the nostalgia of passenger train service and take billions off the taxpayers' tax burden.

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