Is AMTRAK A Model Of How High Speed Rail Will Be Managed? [Reader Post]

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President Barack Obama wants to “stimulate” the economy through infrastructure spending. High on his list is “high speed rail.” (HSR) He has even compared this country to China regarding lack of high speed rail. So, with Obama’s desire in mind, I thought a look at AMTRAK and the subsidies it receives might be in order. It can be argued that AMTRAK was not designed to be high speed rail, and that is true. However, I think that it can serve as a good model of how the government will manage high speed rail.

HSR and Stimulus Spending

Obama’s first “stimulus” (the 2009 one) called for $13 billion on HSR projects. Infrastructure spending decisions are best made at the lowest, most local level possible. When they are made at the federal level, politics, not cost-benefit analysis, dictates what gets funded. When the governors of Florida, Ohio, and Wisconsin determined that their states’ HSR projects were not worth state taxpayer dollars, Obama rejected the governors’ pleas to let them keep the federal funding for other infrastructure spending. Instead, Obama reaffirmed his faith in HSR and sent all the money to California. After California experienced massive cost overruns, Obama proposed his second “stimulus” (the American Jobs Act), which has in it an “Infrastructure Bank” and calls for $53 billion to be spent on HSR. Considering Obama’s obsession with HSR, how much of the infrastructure bank’s “grants, loans, or a blend of both” will be wasted on projects like California’s HSR project? How much of that money will taxpayers ever see again?

AMTRAK “Management”

First, a few observations about AMTRAK. The National Railroad Passenger Corporation, or AMTRAK, is the federal organization that operates passenger rail service in the United States. It was created by the Rail Passenger Service Act of 1970. AMTRAK has been providing very poor service for over forty years, while receiving almost $40 billion in federal subsidies. The system has never earned a profit, and 41 of its 44 routes lose money, with the average of $32 lost per passenger. AMTRAK accounts for 0.1 percent of America’s passenger travel. AMTRAK’s load factor (percentage of seats occupied) is below 50 percent, which compares to a typical 80-percent load factor on airlines.

The Northeast Corridor has the highest passenger volume of any AMTRAK route, carrying nearly 10.9 million people in 2008, and its high-speed Acela Express made a profit of about $41 per passenger. But the more heavily utilized Northeast Regional, with more than twice as many riders as the Acela, lost almost $5 per passenger. The Sunset Limited, which runs from New Orleans to Los Angeles, lost $462 per passenger. AMTRAK operates 44 routes on over 22,000 miles of track in 46 states, the District of Columbia, and three Canadian provinces. AMTRAK owns the trains, but 97 percent of the track is owned by freight rail companies, who had to buy the right-of-ways and who maintains the tracks. How much more in subsidies would AMTRAK need if it had to buy its own right-of-ways and maintain its own tracks?

AMTRAK management deals with is an expensive workforce, with about 19,000 employees, about 86 percent of whom are covered by collective bargaining. Compensation represents almost half of AMTRAK’s total operating costs. The average AMTRAK employee earns more than $91,000 a year in wages and benefits.

Transportation Subsidies

Defenders of AMTRAK argue that most of the nation’s transportation industry is subsidized. AMTRAK’s subsidy is by far the most generous. AMTRAK subsidies totaled $237.53 per 1,000 passenger-miles, while commercial aviation’s was $4.23. These subsidies fail to make train travel more affordable. Randal O’Toole of the Cato Institute observes a one-way ticket between Washington, D.C., and New York City on AMTRAK’s high-speed Acela costs $139, while bus service costs less than $15.

Specific AMTRAK Subsidies

The discussion above outlines the subsidies AMTRAK receives or has received. Now let’s turn our attention to the specific subsidies received by AMTRAK, such as retaining many unprofitable routes.

The average subsidy to a New York-Los Angeles rider exceeds $1,000. The estimated round trip subsidy per passenger for a Denver-Chicago trip is $650. It would be cheaper for taxpayers to shut down routes like these and purchase discount round-trip airfare for all AMTRAK riders.  BTW these dollar amounts are in 1997 dollars.

In 2010, taxpayers spent more than $110 million subsidizing AMTRAK’s Florida trains. The round-trip subsidy to each New York-to-Orlando train passenger is close to $500.

We taxpayers liberally subsidize first-class AMTRAK travel between Chicago and St. Louis.

AMTRAK is trying to go green by switching one of its lines, the Heartland Flyer, which runs between Oklahoma City and Fort Worth, to run on a special biodiesel blend that includes beef byproducts.

According to AMTRAK’s Facebook page, it will introduce four new P-42 diesel-electric trains, each with an “historic paint scheme,” and an “exhibit train” that will travel the country for a year carrying educational exhibits, publish a book called “AMTRAK: An American Story,” release a DVD on its history, and launch an anniversary website. Gladys Knight is acting as National Train Day spokesperson in 2011. BTW, did you know that National Train Day, established by V.P. Joe Biden, is celebrated each year on the Saturday closest to May 10th, the anniversary of the pounding of the Golden Spike in Promontory, Utah.

Is AMTRAK a Failure or a Success?

Nothing succeeds in Washington DC like repeated and costly failure. The federal government doesn’t have a clue about running a railroad. AMTRAK’s monopoly over intercity passenger rail travel provides little incentive to provide high-quality and efficient service. The threat of potential budget cuts or elimination has been repeatedly undermined by Washington’s willingness to bail AMTRAK out. So I guess that we taxpayers are stuck with forever subsidizing AMTRAK. And if HSR is foisted upon us, we can expect the same “management” of it.

But that’s just my opinion.

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To quote Mark Levin, “The new green is the old red.” It need not get much more complicated than that when it comes to high speed trains in America.

Here are some scary stats on the California High Speed, a “train wreck” if there ever was one! Train travel was a disaster in the early years of CA and this will be no exception.

The only profitable and wanted trains in America are in the North East, great for small commutes in heavily congested areas such as Philadelphia to New York City. In my case, there is currently no faster and hassle-free way for me to get to NYC than by jumping on my local Amtrak, which dumps me off in the heart of NYC. Amtrak would do well to close up everything except the North East Corridor.

The left always pushes high speed trains. They employ mostly union workers (votes), and are always unprofitable, sucking more and more money and resources away from the true needs of the people. This all equates to more control by government for all the obvious reasons.

As for carbon, even if it did matter, the amount saved is so small it’s laughable.

Even if CA got its HSR finished and up and running it would not be running at high speed.
The mandatory stops would force the CA trains to go no more than 40 MPH.
So why bother?
Why waste the technology of HSR on trains that will be going slow?
As for the cost over-runs in CA, there is an official number and then there is the number from accountants who are independent.
The official number is bad enough.
But the unofficial one is three times worse!
And CA is broke.
Either Obama pays for the whole thing or it won’t get done.

Once a rail system such as he visions is in place, what do the passengers do that work five or six miles
from the railway’s closest stop to that place of work. Does the passenger just get up a few hours earlier?
What do the Chinese passengers do with their ‘perfect system’?

Like OBAMA with the busses we PURCHASED WITH OUR TAXMONIES, he hopped off his plane and was
assisted to his bus for a fifteen minute ride in style. Will we, the U.S.A. passengers be picked up by a
bus and dropped where we can impress our employers?

If anyone stops to think – the reason we have so many cars on the road is that it is CONVENIENT!
We can figure out how long it takes to get to work, how long it takes to find a parking plance if our
work in inconveniently located, and whether or not there is time to stop for coffee. A modern train
can give us a cup or two of coffee but they still cannot leave their tracks. Yep, the must follow the tracks!

What is being forgotten is being on time.
Presently Amtrak is often late by hours on several of it’s routes. Now given that someone riding Amtrak as part of their vacation may not be in a hurry to get to their destination, that is not the case for all riders.
I have traveled by Greyhound Bus from Toledo, Ohio to Houston, Texas and Amtrak from Toledo, Ohio to San Diego, California. The bus ran on schedule whereas Amtrak was hours late resulting in an extra day travel one way.
For someone traveling on business Amtrak is out for most of their routes.

@Nan G: I can only pray that the disaster that is HSR in the PRK doesn’t get past the BS phase. We should do drug testing on the people making some of the claims of how great it’s going to be. They’re obviously on drugs because there’s no way this thing will be anything other than a money pit.

In Washington the saying goes like this, “If it’s broke, DON’T fix it!” Put Amtrack up for sale, maybe some private company can make it work.

High speed rail can not use the existing tracks. They are much too rough, many of the curves will be too tight, nor can the existing track sustain the beating and forces of a high speed train. That means all new tracks will have to be put down. The land will have to be carefully tapered, and the new rails will have to have more gradual curves. With the earthquakes and mudslides that are prone to parts of California, it will also require continual monitoring and adjustments to keep the track smooth with minimal alignment errors.

Amtrak is definite model for high speed rail service and will be well managed.
Frank Delle Cese

I disagree; I find you views on Amtrak very concerning, stating that Amtrak has been miss-managed and has resulted in a waste of tax payer dollars. Yet, I have to ask, why is rail the only mode of transportation that is expected to make money? According to a paper by the Missouri-Kansas Passenger Rail Coalition, highways are subsidized at 40 million dollars a year, more than the total subsidies Amtrak has received over its 40 year life span. While airlines are still ran by different operating companies, they still require federal funding to run airports, security and the FAA, a separate entity, costs along the tune of 3 billion dollars, 3 times more than what it costs to partially subsidize a national rail company. I find it a deep concern that Amtrak has seen record ridership for the past five years, and has seen a record 30 million passenger this year, and yet the Republican Party would still like to eliminate and cut rail service.
Another concern that I have with your views on rail is that you have tried to introduce bills that would have “opened the market to rail industry,” when all that it would really do is cut Amtrak subsidy, and force the company to sell one of its most heavily traveled corridors, the North East Corridor, further compromising our National Rail system. In addition, why in the world would you claim that eliminating Amtrak or government involvement from rail would encourage the private industry to get involved with passenger rail, when Amtrak was created because the private industries wanted to transport freight and abandon passenger service to make more money and let passenger service decline? Even in England, the place where many opponents of Amtrak claim that passenger rail companies are able to break a profit, England still owns the rails that the trains run on and constantly pays for the maintenance costs. We don’t even own the track rights here and yet we expect passenger rail to break a profit while Amtrak has to pay rent for the rails that neither it nor the government owns, along with poorly invested equipment and infrastructure.
If your answer is to eliminate all passenger rail subsidies, because of the lack of demand, then consider this: then eliminate all subsidies to highways and airlines. If you are a true capitalist then you would realize one of the reasons that Amtrak or any passenger rail company does not make money, it is because it is in competition with road and air which are subsidized much more heavily by the government; as I said before, up to 40 times as much US rail. Though I do not suggest defunding all modes of transportation, I suggest this: pay Amtrak, it is only less than two percent of the entire transportation budget. As I read in the news and observer, rail is the most efficient form of transportation, followed by air, boat and car. Eliminating Amtrak’s subsidy won’t even make a dent in the deficit, and will further harm the country at the worst time. It would kill links between cities and towns, kill jobs, and harm economic growth. The idea that, rail, the most convenient and cheapest form of transportation is a waste of tax payer money is a complete farce.
In short, I find your sighted attitude towards rail, a potential investment for the country a disservice to all of us. On your webpage, it also calls high speed rail a dead plan; it was only dead when Congressional Republicans threw away common sense and started deadpanning anything that could have helped our country and economy. The High Speed Rail project would have proven a large and wise investment towards America while creating jobs. Just so you know, stimulus packages don’t create debt crisis, funding two large wars without allocated funding and large revenue (aka the Bush tax cuts) cuts do.

You actually make it appear really easy with your presentation however I find this
topic to be actually one thing which I think I’d never understand.
It sort of feels too complicated and very broad for me.
I’m having a look ahead for your next post, I’ll attempt to get the grasp of
it!