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Panel:Amtrak Should be Broken Up (Dukakis Disagrees)
AP ^ | Lawrence Arnold

Posted on 02/07/2002 12:08:55 PM PST by Clemenza

Panel: Amtrak Should Be Broken Up By LAURENCE ARNOLD, Associated Press Writer

WASHINGTON (AP) - A congressionally appointed panel said Thursday that Amtrak is irreversibly flawed and should be broken up to give the free market an opportunity to improve the nation's passenger train system.

Amtrak, created to relieve freight railways of the burden of carrying passengers, should be replaced at least in part by private operators working under franchise, the Amtrak Reform Council said.

The council's report, sent to Congress, says Amtrak should be relieved of policy-making duties and landownership. After a transition period, private operators would be allowed to compete for contracts to run specific routes.

If enacted, the change would be dramatic. Amtrak, formed in 1971, is the nation's sole provider of intercity passenger train travel.

``The council believes that passenger rail service will never achieve its potential as provided and managed by Amtrak,'' the report says.

The council voted 9-1 in a mail ballot this week to approve the report, which was released Thursday. Transportation Secretary Norman Mineta (news - web sites), the Bush administration's representative on the panel, abstained. Charles Moneypenny, who represented rail labor, cast the only ``no'' vote.

The next step is up to Congress, due to vote this year on whether to authorize Amtrak's continued existence. The House Transportation Committee has scheduled a Feb. 14 hearing on the report.

White House budget director Mitchell Daniels said this week the Bush administration plans to study the council's plan before deciding on a course for Amtrak and passenger rail.

The plan faces a hostile reception from Amtrak supporters on and off Capitol Hill.

``I think this report should be rejected out of hand,'' said Amtrak chairman Michael Dukakis, former Massachusetts governor and presidential candidate. He called decentralization ``a prescription for bureaucratic paralysis.''

Dukakis said the real issue is money.

Amtrak says it has a $5.8 billion backlog in work needed on its trains, tracks, rail yards and stations. The Transportation Department's inspector general, Kenneth Mead, reported last month that Amtrak needs at least $1 billion a year to stave off deterioration of its assets, most of which are in the Northeast.

Last week, Amtrak said it will cancel long-distance routes unless it receives $1.2 billion in the 2003 budget year, which begins in October. President Bush (news - web sites) has proposed $521 million for Amtrak, the same amount as the last three years.

In its report, the reform council endorses ``adequate and secure sources of funding for intercity passenger rail service'' but specifies no amount.

The reform council's chairman, Gilbert Carmichael, said Thursday that Amtrak's problems do not relate to funding. ``They stem from an organization that is obsolete, can't do all the things it is supposed to do, and has to change,'' he said.

Amtrak, in a statement, agreed that ``the current policy model for passenger rail does not work.'' But it said the reform council sidestepped questions about how big a rail system Americans want, or how much such a system will cost.

Under the council's plan, a new subsidiary of the National Railroad Passenger Corp. - Amtrak's official name - would conduct train operations, ultimately franchising out some or all routes through competitive bidding.

Another subsidiary would own, operate and maintain the tracks, property and stations now under Amtrak's control.

``The council believes that, as is the case throughout our free-market economy, competition would drive down costs and improve service quality and customer satisfaction,'' the executive summary says.

Congress created the council as part of an overhaul that gave Amtrak until Dec. 2, 2002, to begin operating without government subsidies. The council voted 6-5 in November that Amtrak will not achieve that goal, a finding that gave the panel 90 days to come up with a restructuring plan.

Amtrak President George Warrington said the council's November vote cost Amtrak $52 million because it forced some pending business deals to fall apart.

The rail labor division of the AFL-CIO's transportation trades department failed last week to persuade a federal judge to block release of the council's report.

TOPICS: Business/Economy; Front Page News; News/Current Events
KEYWORDS: transportationlist
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To: Willie Green
41 posted on 02/08/2002 11:15:43 AM PST by 1Old Pro
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To: 1Old Pro
Glad to help.

I should point out that since downtown Pittsburgh would be one of the intermediary stops, the fares to get there would be only $5 or $10 one-way, depending where you got on. Once again, cheaper than a cab, & factor in the cost of downtown parking to compare to driving.

42 posted on 02/08/2002 11:27:31 AM PST by Willie Green
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To: B-Chan
I agree with everything you wrote. I'd also like to add that I ENJOY long distance train travel, and don't understand why the government can spend billions on the ridiculous Big Dig, can increase foreign aid to Egypt to 2 billion a year (that was posted this morning), can give all that money to the airlines after 911, but can't give rail the support it deserves.
43 posted on 02/08/2002 11:34:59 AM PST by grania
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To: grania
Yeah. If the railorad industry had just gotten a $12 billion free gift from the Feds, people would be screaming bloody murder. For some reason it's okay to have government-supported AIRLINES, but if the Feds were to spend the same money on railroads, why, that'd be communism!

"But America needs airlines! We can't let them go bankrupt!" people say. "Really?" I asnswer. "Why not? Which industry does the nation need most to survive?

Answer: If the airlines disappeared tomorrow, it'd be a nightmare, but we'd pull through. That was proved during the post-911 period when air travel was banned; things were inconvenient, but we survived. But without trains, America dies: coal and oil, spare parts, machinery, foodstuffs in bulk, industrial chemicals, and more are all delivered by rail. There aren't enough eighteen-wheelers in the world to take up the slack. Airlines cannot fly coal to powerplants. In any rational reckoning of worth, the rail industry is vastly more important to the survival of this nation than are passenger airlines.

Yet the airlines get the federal bailout, and rail gets told to go get stuffed.

Infrastructure is the province of government. From seaports to canals to roads to railroads to interstates to airports to space launch facilities, government has always shouldered the capital outlay and maintenance costs of basic transportation infrastructure in this country. It is a practice as American as apple pie. Just as they did with the Interstate System fifty years ago, federal, state, and local government should now build and maintain a nationwide network of interconnected regional high-speed rail systems.

Nobody cares if Uncle Sam covers the airlines' tab; if the airline industry were forced to own and operate their own airports, navigation aids, and other infrastructure they wouldn't make a dime of profit. But let anyone propose that the railroads get the same sweet deal and suddenly we're operating on the strict free-market system again.

Which just goes to show that, when it comes to the airline industry, some people like to serve up their free-market capitalism a lot hotter than they like to eat it.

44 posted on 02/08/2002 12:25:44 PM PST by B-Chan
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To: Clemenza
I just finished "Atlas Shrugged" yesterday. This is very interesting.
45 posted on 02/08/2002 12:28:51 PM PST by RowdyYates
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To: Willie Green
Well in a capitalistic society, investors give an entreprenuer money to build a business which then pays them a return on their investment generated from operations. No government funds are involved. Or sometimes the gov't will pay a portion of the capital costs. The investors you cite are not doing that, but rather putting forth a little seed money, in the hopes of being paid far, far more money from the government for construction(not operational) contracts. One-time projects, not an ongoing successful enterprise. And you darn well know that the operational subsidies required from the government for this route would be larger than for the existing, or even improved, Amtrak service. So if it requires gov't operating subsidies, than it is by definition a money-losing proposition. At least Amtrak has 4 private companies competing for the operating rights of Amtrak. How many are competing for the operating rights of maglev?

You can call me all the childish names you want, but its a pretty basic distinction from capitalism 101. Socialism might rewrite the definition of investoring to include those who put forth only lobbying exenses, but not Wall Street.

46 posted on 02/08/2002 2:07:21 PM PST by Diddle E. Squat
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To: B-Chan
Infrastructure is the province of government.

Back in the '50s, when the federal government was a little more aware of what its functions were, the Eisenhower administration justified the interstate highway system for defense purposes. The same justification is just as valid for the rail system.

I just can't phanthom the logic of the government not doing everything possible to increase train travel, as it is obvious that passenger air travel is totally overwhelmed with security and safety issues. And, PS: when I travelled by train, there were a lot of citizens who were wonderful employees in good paying jobs working for AMTRAK.

47 posted on 02/08/2002 2:43:04 PM PST by grania
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To: Diddle E. Squat
The investors you cite are not doing that, but rather putting forth a little seed money, in the hopes of being paid far, far more money from the government for construction(not operational) contracts.

Well, your ADD is flairing up again, so I'll repeat for you a second time:

"Additional segments of the system would be financed by private and public partnerships. The system operating costs must be proven to be sufficient to support the investment costs and associated profit while in operation."

In other words, if the 47 mile pilot segment doesn't prove itself financially viable in operation, the rest of the system doesn't get built. Considering the long-term promise of 300 mph high-speed ground passenger service, $900 million is a very small amount of federal funds to prove the technology.

Furthermore, it is far and away less than government spends on other transportation infrastructure, highways, airports, etc.

48 posted on 02/08/2002 2:58:36 PM PST by Willie Green
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To: grania
AMTRAK isn't that bad. Any trip by rail, no matter how grim, is preferable to riding a bus. And let's face it -- driving long distances sucks. Sitting in an upright postion with a wheel in my hands, staring straight ahead through a bug-splattered glass windshield for hours and hours is a boring waste of time.

All that being said: I don't think the federal government has the ability or the constitutional right to directly operate a passenger railroad service. In other words, I'm against AMTRAK. However, I am most definitely for the proposition that our federal, state, and local governments should cooperate to build and maintain the physical infrastructure of a linked network of regional high-speed rail transportation systems. In other words, I support the establishment of a national system of interstate and defense railroads -- the rail equivalent of the Eisenhower National System of Interstate and Defense Highways.

Just as the Interstate Highways are taxpayer-funded, the rail system I'm advocating would be built and maintained with public funds. Each state would operate its own regional rail network, just as they build and maintain their own sections of the Interstate highways. The difference is that on the national rail system there would be no traffic jams, no weather closures, and no billboards. There would also be no 55 mile-per-hour speed limit; trains would regularly operate at 150 to 190 miles per hour on the longer runs. These trains would be owned and operated by private, for-profit railroads; the government would no more run these trains than they run the trucking companies or motor coach (bus) operators today. The majority of funds for upkeep and improvement of the infrastructure would come from taxes levied on the carriers, just as trucking companies and bus lines pay for much of the highway system's operating costs today.

And finally travelers would have a choice! Instead of gulping down greaseburgers or attempting to digest the latest offering from Stuckey's or Perkins, travelers on these improved railroads could enjoy fine meals, served in a clean, comfortable dining car on real china with cloth napkins by a uniformed steward -- or they could eat home-cooked or other picnic foods in the Club Car. Unlike travelers in buses or private cars, rail travels could enjoy wine, beer, or liquor during their trips. Unlike airline travelers, their luggage would stay with them the entire time, they could "move about the cabin" to their hearts' content, there would always be an open restroom, and passengers who desired to could even -- gasp! -- enjoy a cigar or pipe in the Smoking Car or Lounge.

The trains would depart and arrive from convenent city-center terminals. That would sure beat sitting in traffic for an hour to get to the concrete bunker of the airport. And the pre-boarding rectal exam and underwear inspection would be a thing of the past.

Those who worry that the federal goverment has no right to build roads (or canals or airports) need not worry. Not only is such construction constitutional (Art. I, Sec. 8), but there is a substantial body of case law supporting its constitutionality (the Federal-Aid Highway Act of 1956, among many others). To argue otherwise is to argue against the existence of ports, airports, and the Panama Canal -- all of which required (and require) big honking heaps of taxpayer dollars to build and maintain.

I'm generally not a supporter of big government. In this case, however, I'm of the opinion that it is the duty of our governments to build and maintain a national high-speed rail system -- not to operate the service, but to create the infrastructure that will allow that service to exist.

49 posted on 02/08/2002 4:12:33 PM PST by B-Chan
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To: B-Chan
Your defense of and analysis of how to fix the rail system is wonderful...articulate and informed. Please forward it to everyone who is part of the decision making process.
50 posted on 02/08/2002 4:44:28 PM PST by grania
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To: Clemenza
If Amtrak IS broken up and sold to the private sector will the government stop collecting taxes for it?


51 posted on 02/08/2002 4:50:27 PM PST by unixfox
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To: B-Chan
Trains may be nicer than busses, but the real purpose of a transportation infrastructure is to get people from point A to point B. Unless a route has enough riders that bus schedules are set by capacity limitations rather than frequency-of-service, a bus is almost certainly going to be more cost effective than a train. Indeed, one feature of busses as opposed to trains is that it is practical to run a wider selection of routes than would be practical with trains.

A double-track rail line that can transport people at 70mph is IIRC about comparable in cost per mile to two lanes of interstate (it may be more or less depending upon grading conditions, etc.) Such a line can transport many more people than can a lane of interstate, if it's used to absolute maximum capacity. In practice, though, very few passenger rail lines are utilized to anything near the capacity of a lane of interstate.

Freight, btw, is a different matter. Many rail lines are used to haul far more coal or other bulk freight than could reasonably be transported by road. Even though most such lines are used to only a fraction of their theoretical maximum capacity, they provide a far more economical means of transport than anything else except waterways (with which they're about comparable).

52 posted on 02/11/2002 5:53:18 PM PST by supercat
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