Cutting Train Budgets Could De-Rail Transamerican Routes

Senators in Appropriations have to ask, Who rides the train cross-country anymore? Photo: ##http://pignouf-vintageposter.blogspot.com/2011/01/streamliner.html##Pignouf##

The idyllic cross-country train trips that many Americans still take could get derailed by today’s “slash and burn” federal budget policies. Meanwhile, fears for the safety of rail passengers in the post-bin Laden era are drumming up political support for costly security measures and raising, once again, questions about why the federal government funds rail routes without any promise of profitability.

At this morning’s Senate Appropriations hearing on budget requests for the Federal Railroad Administration (FRA) and Amtrak, the three senators in attendance were unified in their support for funding rail transportation. They’re working on the funding request for the FRA for 2012, not the rail piece of the overall transportation reauthorization. Still, with huge disagreements over spending levels in Congress still raging and a showdown looming over cuts as a quid-pro-quo for raising the debt ceiling, next year’s funding is a significant question.

So the three senators present wanted to know how they could be expected to defend rail funding without more transparency in the budget allocation process. They also asked pointed questions about what the administrators of the FRA and Amtrak were doing to keep riders safe from the terrorist attacks threatened by Al-Qaeda.

The FRA has taken on a greater role in the allocation of funding for rail projects over the last several years and senators appeared frustrated over a lack of clear information as to where the funding would come from. Indeed, some security projects appear in the FY2012 budget request but the FRA is also requesting a USDOT loan to for the same thing.

Transportation Appropriations Subcommittee Chair Patty Murray (D-WA) was quick to commend FRA Administrator Joseph Szabo for his efforts, but called him out for not improving transparency about how, when, where and why projects are funded.  “I support investments,” she made clear. “Now is the time to address critics head on. We must communicate with the people.”

Murray and Sen. Frank Lautenberg (D-NJ) presented a grim future for surface transportation if funding does not keep up pace with booming population growth. The only other senator to speak, ranking Republican Susan Collins of Maine, agreed and reminded her colleagues that the ambitious national rail plan proposed by the FRA, including high-speed rail, has yet to be followed up with any cost estimates, for construction or operations.

Szabo, for his part, could only promise that studies to be released within “the next couple of months” would present the “broader business case” for funding both high-speed rail and individual projects across the country. Szabo, the first union railman to hold his position, was proud of what his agency was doing to keep hazardous freight secure – but admitted that there are still unimplemented security measures that date back to 9/11.  He pointed out that for every $50 spent on aviation security, only $1 went to surface transportation.

Mr. Szabo’s predecessor and the current president and CEO of Amtrak, Joseph Boardman, was noticeably more willing to get into details. He agreed that a disproportionate number of Amtrak employees received overtime in the last few years, particularly during ARRA-funded projects, but said that it would have actually cost more to bring on new employees with Amtrak’s full benefits packages (54 percent of the salary-related cost) and train them for the required 24-30 month period, only to lay them off as soon as projects were completed. He said that Amtrak was already addressing overtime, as well as other operational overhead, wherever it could be reduced, but it was clear he did not see these among the biggest budget problems.

Sen. Collins presented Boardman with a pointed question: “How, given that you are serving more passengers than ever before, each and every month, are you losing more money than last year?” His answer began with a awkward nod to rail advocates.

The pro-rail folks always shudder and get concerned when I talk like this, but you are not going to be able to cut costs enough on long distance trains to make them profitable. It becomes more a question of policy of whether we are going to have border-to-border, coast-to-coast connectivity.

Despite record increases in ridership, Amtrak continues to rely on federal funding to keep all of its trains running. Collins wanted to know what Boardman thought of former Pennsylvania Gov. Ed Rendell’s ideas for severing the budgetary ties between Northeast railways and the rest of the country. As he has said before, Boardman believes this would only decrease ridership by disconnecting what should remain a unified transportation system.

He was also quick to remind Collins that long-distance routes are, for many rural Americans, their only connection to regional and local transit systems. Congress mandates that Amtrak operate those routes, which no private carrier would, as a public service although they do lose money. Boardman warned that while cutting those routes may seem like low-hanging fruit, it would be painful to those who most need transportation options — and would inevitably yield negative affects on ridership elsewhere.

  • Michael Hicks

    Yes, the long-distance routes are probably destined to be money-losers for quite a while to come.  I’m quite confident that they more than pay back for themselves by providing an economic lifeline to hundreds of small communities, but of course there are folks who want to see outright profit — something that has always been difficult in the transportation sector.

    However, there are many shorter corridors in the U.S. that could operate at a profit with conventional or high-speed lines if only they got built.  We’ve known where they are for decades.  Build a few of them, and they’d run surpluses of hundreds of millions dollars per year — likely enough to cover all of the subsidies for long-distance routes in the Amtrak system.

    We’ve given $30 billion or so in subsidies to Amtrak over the last 40 years of its existence.  If we keep running with the status quo in the future, we’ll just end up spending about the same again (plus inflation).  However, if we could invest $30 billion now (or the $53 billion Obama and Biden wanted), the train network would be able to pay for itself year-over-year.  In the optimal case, Amtrak could even pay for expansion on its own.

    The caveat is that we probably wouldn’t get the capital costs paid back directly, except possibly in the Northeast and a few other areas.  Building and operating the lines would generate more than enough economic growth to cover the cost, but direct revenue would probably only manage to cover 1/2 to 3/4 of the initial dollars spent, though that could still be less cost than continuing to subsidize Amtrak the same way we do today.

  • Who rides cross country? Very few people.

    But the thing about trains is that they stop along the way. You can ride the train for 10 hours and not get anywhere near the two termini. The same seat is sold multiple times. Is it so hard to understand?

    Also, since when does anything the government do make a profit?

    If profit was the goal, than nationalize the oil companies. There you go, lots of profit.

    But wait, didnt we decide that anything that makes a profit for the government should be privatized….?

  • Justin

     Surprised this article did not call out the oft-repeated canard that Amtrak is not profitable — as if roads and airports, both heavily subsidized, were somehow profitable for the treasury. 

  • Mad Park

    The long distance trains could gain many riders if there were convenient connections to/from them from cities up to 200-300 miles from the trunk lines. For instance connections from Denver and El Paso to/from Southwest Chief; from Twin Cities/Des Moines and from Kansas City to/from the Zephyr; and from Duluth and Winnipeg to/from the Empire Builder.

ALSO ON STREETSBLOG

Dem and GOP Senators Seek More Long-Term Rail Vision From Obama Aides

|
The senior Democratic and Republican senators in charge of setting annual transportation spending levels today urged the leader of the Federal Railroad Administration (FRA) to develop a more comprehensive plan for using the White House’s high-speed rail program to spur the development of viable U.S. train networks. FRA chief Joseph Szabo (l.) and Amtrak CEO […]

Eleven Things to Look for in the Passenger Rail Reauthorization

|
Now that the surface transportation bill fight is over — at least for the moment — transportation reformers are eying the expiration date of another key piece of legislation later this year. The reauthorization of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) could be a chance to make some needed changes to jump-start progress […]

Rail Advocates: House Bill Would Kill Amtrak

|
The 2012 transportation budget passed by a subcommittee of the House Appropriations Committee yesterday cut all high-speed rail funding and slashes Amtrak’s operating grant by 60 percent. What’s more, it forbids Amtrak from using that money to fund short corridors. Ridership on those short corridors grew five percent in the last year [PDF]. Twenty-seven train […]

House Votes to Strip High-Speed Rail Funding

|
This morning, the House voted 232-182 for an Energy and Water Appropriations bill that redirects $1 billion of high-speed rail money to flood relief for the Midwest. Never mind that that flood relief won’t arrive for many months, since this is a 2012 appropriations bill. The important thing here is to kill high-speed rail. (Why? […]