UPDATE: Reminder: Amtrak Subsidies Pale in Comparison to Highway Subsidies
3:05 PM EDT on September 21, 2012
UPDATED 9/24 with chart.
House Transportation Committee Chair John Mica continued his “holy jihad” against Amtrak yesterday, holding the third full-committee hearing in a series on “Reviewing Amtrak’s Operations.” He’s planning at least three more hearings during the lame duck session after the election.
Mica went after subsidies in this one, and he clearly thinks this is a winning issue. After all, Amtrak has gotten nearly $1 billion a year in federal funds over its 41-year existence. The per-ticket subsidy over the past five years has averaged nearly $51. Mica compared that to other forms of transportation: Using 2008 data, he showed that the average per-ticket subsidy to aviation was $4.28, for mass transit was 95 cents, and for intercity commercial bus service 10 cents.
What’s missing? Highways, of course. Luckily, Amtrak CEO Joe Boardman was on hand to remind him. “In the past four years, the federal government has appropriated $53.3 billion from the general fund of the Treasury to bail out the Highway Trust Fund,” Boardman told the committee. “That’s almost 30 percent more than the total federal expenditure on Amtrak since 1971.”
Considering that about 20 percent of the Highway Trust Fund goes to transit, that’s still more for highways alone over the past four years than Amtrak has ever gotten.
Meanwhile, Amtrak affirmed this week that the rail line covers 85 percent of its operating costs with ticket sales and other revenues [PDF].
Mica did acknowledge in his opening remarks that “almost all forms of transportation are underwritten by subsidies” but didn’t mention roads, despite the massive subsidies road builders receive.
Rep. Peter DeFazio had a different take on the subsidy number. He said the Republicans were “disingenuous” in using the $51 figure, because it only includes the passengers on the long-distance routes, which lose money. “If you take all of the passengers carried by Amtrak, you actually come up with a number that’s $5.62,” DeFazio said. “That’s one-tenth this inflammatory number that’s put out there.”
That’s not quite right either. DeFazio’s staff didn’t return Streetsblog’s requests for information about where that number came from, but Amtrak spokesperson Steve Kulm confirmed that the Republicans’ $51-per-ticket number does, indeed, account for all Amtrak passengers, including those along the popular Northeast Corridor.
Kulm said DeFazio was probably referring to the total ridership of all the commuter passengers Amtrak supports, including on other lines that run on Amtrak’s track, like Maryland’s MARC train, the Virginia Railway Express, New Jersey Transit, and the Long Island Rail Road. (Amtrak also directly operates three commuter trains: LA’s Metrolink, MARC’s Penn Line, and the Sureline East in Connecticut.) Add in all Metra trains in and out of Chicago’s Union Station, which Amtrak owns, and you get 230 million passengers – far more than the 30 million annual riders on Amtrak trains alone.
This chart, supplied by Democratic T&I Committee staff, shows the breakdown:
Either way, Mica should get over his obsession with Amtrak subsidies, said top committee Democrat Nick Rahall -- “as if there’s something wrong with subsidizing transportation.” That’s what the committee does, he said.
Amtrak's subsidies by and large support the long-distance routes, which Congress mandates as a public service. It can’t very well require Amtrak to run these money-losing (but important) long-distance routes and then cut the money to run them – yet that’s what Mica proposes to do. Outsourcing wouldn’t work because no private company would want to take on routes that are proven to lose money. Maybe that’s why Mica’s privatization plan centers on the lucrative Northeast Corridor – the one place Amtrak does make money.
The 2008 rail authorization law specifically conveys the “sense of the Congress” that the long-distance routes are "a vital and necessary part of our national transportation system and economy" and that "Amtrak should maintain a national passenger rail system, including long-distance routes, that connects the continental United States from coast to coast and from border to border."
Rahall’s primary concern is labor, not transportation. After all, Amtrak isn’t a particularly significant mode of transportation in his home state of West Virginia – though he did mention that the Cardinal route serves 53,000 West Virginians a year. He criticized Mica’s proposal to outsource the money-losing line to the lowest bidder, saying, “Lowest bidder is code for low wages and little to no benefits.”
Rahall went on about Republicans’ “tortured logic,” which he said makes clear that labor will lose out.
“Republicans say they want to create jobs,” he said. “They also claim they want to reduce Amtrak’s operating subsidy. In order to do that, you need to increase revenue. Except the Republicans want to eliminate routes and service, which are the only means Amtrak has to generate revenue. So then you have to reduce operating expenses. A quick look at Amtrak’s operating expenses shows that its two biggest expenses are fuel and labor. So unless the Republicans are willing to go after big oil -- which I kind of doubt -- then labor is the target.”
Rahall encouraged Mica to let the committee get on with the rest of its work and let Joe Boardman focus on running his railroad, rather than running down to Washington for hearings all the time. “In the next rail title, we’ll need a new line just to shuttle Mr. Boardman back and forth from his office to the committee room,” Rahall joked.
“We have a hearing, we put the squeeze on Amtrak even more, we force them to beg for adequate federal funding on an annual basis, and then turn around and criticize them for how they run a railroad in the same breath,” Rahall said. “Give me a break. Give me a break! Other nations that are investing billions in their passenger rail system have got to be laughing at us.”
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