Report Says Congress Must Fix Amtrak

Sun Nov 21, 5:30 PM ET

By LESLIE MILLER, Associated Press Writer

WASHINGTON - Though Congress approved a $1.2 billion subsidy for Amtrak, the money-losing passenger railroad still is careening toward a major disruption in service.



To save it, the Transportation Department's inspector general says, Congress must do more. Considering current Amtrak policies, says Inspector General Kenneth Mead, it's up to lawmakers to determine what must go and what may stay to restructure Amtrak and stop the hemorrhaging.

"Without clear direction from the Congress, Amtrak has taken the position that it should essentially maintain the status quo," Mead wrote in an assessment being released Monday.

"However, given the level of income from passengers, state contributions and federal subsidies, that decision has resulted in a form of Russian roulette, spreading capital much too thinly."

Mead said it's impossible to tell when the railroad will experience a major failure.

Tracks need to be repaired, locomotives and cars need overhauls and three bridges over rivers in Connecticut must be replaced before they fail. The railroad simply lacks the money to make the repairs.

"Amtrak cannot save its way to financial health," Mead wrote in the periodic report that Congress required in a 1997 law that was to have ended automatic operating subsidies for the railroad by 2002. It now must request any federal money it needs.

David Gunn, who took over as Amtrak president 2 1/2 years ago, has cut costs but not enough to stem the railroad's annual loss of more than $500 million.

Gunn has staunchly defended the need for a national passenger railroad system, although some long-distance lines lose more than $100 per rider. He has asked for bigger subsidies — $1.8 billion this year — than Congress has been willing to approve.

Mead, the Bush administration and some members of Congress want to eliminate unprofitable routes and to invest instead in corridors between cities fewer than 500 miles apart.

Enough members of Congress serve in districts that don't want to lose Amtrak service, however, that such proposals always have failed.

The Bush administration proposed this year cutting Amtrak's federal subsidy to $900 million, with a promise of more money if the railroad can restructure itself.

Gunn said it's up to Congress and the administration to make the restructuring decisions.

The $1.2 billion that Amtrak ended up with in the huge spending bill passed Saturday is less than it needs to maintain the railroad in a state of good repair, according to Mead's report.

President Bush (news - web sites) will get the new spending bill to sign into law late this week.

Mead argued that Amtrak can't continue to defer spending on repairs with the hope that Congress will eventually give it enough money to run an efficient, well-maintained national system.

In a letter that responded to the inspector general's report, Gunn defended his $1.8 billion request. "It is management's responsibility to inform the board and others of the minimum federal funding required for a safe, reliable operation," he wrote.

Mead concluded that Amtrak management's commitment to the status quo leaves it up to Congress to set a direction for the railroad, which it has been unable to do.

He also urged Amtrak's board, which is appointed by the president and the transportation secretary, to work with Congress and the administration to plan for the railroad's future.

The report also said:

_Ridership increased to a record 24 million in 2003, but revenue fell from 2002, partly because of fare reductions.

_Between Oct. 1, 2003, and June 30, 2004, ridership was up 5.7 percent and passenger revenue was up 5.6 percent, better than forecast.

_The persistent unreliability of service could depress revenue. Trains were on time only 71.8 percent during the October-June period, a decline from 74.1 percent for the previous year. The Acela Express was on schedule only 74.7 percent of the time, short of Amtrak's target of 94 percent.

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On the Net:

Amtrak: http://www.amtrak.com
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Ever ridden on one? I rode the empire builder this past summer from Portland to the Twin Cities. It was pretty slow and not on time.

I would love to see a decent passenger rail service in this country, but Amtrak is not the answer.

Japan's are soooooooooooooooooo much better!

I wouldn't mind being convinced otherwise, but I don't see why Amtrak deserves any more subsidies. They just can't (pardon the pun) get on track.

That is right on. Part of the reason why passenger rail went to the government was because private companies (such as BN, UP, and the like) found it to be unprofitable.

However, I would like to see them regain the chance especially in the post 9/11 years and with the advent of faster trains. Private companies own the tracks...lets let them try it out.

I'm getting quite tired of these government bail-outs of railroads and airlines.

If they aren't profiting, they need to change and adapt to the consumer. Using too much fuel? Get more efficient. Not on time? Get on time.

Etc, etc.

one of my professor's in american history discussed with our class how much mass transit with rails would benefit our country..i have ridden amtrak...it's not the worst, but i know we could do better...if we invested in a few lines of those "bullet trains"....wow, i think it would revolutionize the way people thought about traveling..

i once took an Amtrak train from Indiana to NYC. I never slept more than 10 minutes because the train felt like it was gonna derail ALL the time. same goes to the guy sitting next to me.

A quick Google search of bullet trains told me that their average speed is around 200 mph. That's pretty fast, but still about a third the speed of a commercial airplane.

The best hope I'd see for bullet trains would be small routes between nearby metropolitian areas (say, New York to Philly?).

amtrack is running acela trains for this, but they're too expensive. it costs over $100 one way, if i take NJ transit, it costs $11 one way.

i took a round trip from Montreal to KY, last year, and like most of you who rode with Amtrak, i thought the ride was quite tedious, long and boring. I couldn't compare Amtrak with other railroad companies like...let's say Via Rail for example....because it was the only train ride i ever took.

Why Why Why are our tax dollars going to bail out these companies?

Delta, Amtrack, United all should be finding ways to become profitable instead of whining to the governement.

Delta could take the 9 million dollar bonus back from it's CEO for starters. Why did he get a bonus? He ran the company into the ground.

Last time I checked, Jet Blue was profitable, Air Tran was profitable, Southwest was profitable.

These companies can kiss my ass. We don't need them. If they go under, someone else will start a better business that better serves customers and is profitable.

Why are we bailing out a failing companies due to their unwillingness to change their policies and become profitable?

Do they hand out free tickets to the public for no reason?

Ok, then they get no free pass!

If they fail, let them fail. Some other transportation company will pick up the slack.

*standing ovates*

Standing ovation for you. I don't understand it either.

We pay our money to ride these transportation modes and when they fail - WE - pay extra taxes + higher prices to keep them afloat. They declare bankruptcy, while still receiving large bonuses. They downsize by laying off workers (who get your taxes again through unemployment benefits). Then three months later these companies are back making a profit, WITH NO BILLS TO PAY - thanks to OUR hard earn dollars.

I'm with you - let them FAIL. Someone else will fill the void and hopefully do a better job.

welcome to America, enjoy your stay

Exactly.

When Jet Blue, Air Tran, and Southwest provide air travel to ALL of the major cities and to the minor cities in the US, let me know. Jet Blue preys on ONLY high travelled routes. So how are they going to make a profit by providing air travel from Boise to Cheyenne? Please tell me. The answer is they aren't. If the big boys like United didn't have these flights which lose money, then there wouldn't be any travel between small cities.

Edit: Also, I've flown quite a bit over the last 3 years and rarely are there open seats anymore. Airlines have done a great job at eliminating unnecessary flights, etc. The problem is for about 6 months after 911 no one was flying. So what happens to the industry? Prices are lowered to attact customers. Then you add the high price of oil and you can see what happens.

Come on guys, you know it's not that simple.

Firstly, Amtrak has been on the brink for 20 years. The only reason they still exist is because of goverment bailouts. In the current envrionment, there is NO WAY for Amtrak to turn a profit, and no private investor in his right mind would try. This is why such things are nationalized in Europe, because they are important to the public, but not profitable. If the NYC subway system were deregulated, somebody would figure out how to run the thing into the ground. Sometimes the market doesn't know best.

As for your argument about the airline industry, the only valid point you made was that the CEO should not be taking huge bonuses for running the company down. But you're talking about a few million dollars of bonuses and the companies are losing billions of dollars a year.

Why does Jet Blue make a profit? Easy, because they cherry-pick the routes they fly. Airlines like Jet Blue, Southwest and the other discount carriers ONLY FLY THE MOST PROFITABLE ROUTES, i.e. the ones that they can fill their planes all the time. The big carriers like United and Delta and American fly those routes also, but they also have to fly to Grand Forks and Sarasota and Albuquerque and every other regional airport in the country. They lose money on those routes, and it used to be that they could make enough profit on the busy routes to cover the losses for servicing the less busy routes. But now that Southwest comes along and charges $99 to fly from Newark to Orlando, and American has to compete with that, all the big carriers' profits are gone, and then some.

So you have the option, bailout the airlines every few years, let them die and make people drive five hours to get to an airport that Jet Blue services, or go back to airline regulation like they had in the 70's when tickets cost 3 times what they do now (in 70's dollars too), and flying is not something that is available to the working class. None are all too palatable, but before you go saying "you don't need" companies like this, consider the alternatives.

--PunkDavid

You and I think alike.

And I'd say we don't "need" Amtrak. There's a station right down the road from where I live and it's as empty as a Creed Message Board.
No one rides Amtrak outside of the northeastern states, it's cheaper to fly in most cases.

Why can the government spend millions of dollars on roadways, which is transportation, but isn't allowed to spend $$$ on airlines, railroads, etc.?

Public access to roads vs. public access to air/train travel?

Yeah, no difference. If you think that the fact that you own your car is the big difference, it's not, because you don't own the road (even though you drive like you do. )

--PunkDavid