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(Alexandria, VA) – Today was supposed to mark the beginning of liquidation for Amtrak, yet the fiscally-challenged passenger railroad will continue to chug along on government subsidies. This broken promise to taxpayers from politicians is only the most recent of many failures documented in a new historical study from the 335,000-member National Taxpayers Union (NTU).

“Like most creatures formed in the government’s laboratory, Amtrak has failed to acceptably serve the vast majority of the American people, much less turn a profit,” said study author and NTU Associate Policy Analyst Tyler Pace. “It is time for Amtrak’s stubborn defenders to give a new structure a chance at making passenger rail a viable commercial success in the U.S.”

Although past government and private studies have pinpointed Amtrak’s problems, Pace took a unique approach of examining documents from the Amtrak Historical Society and other sources to compare the original vision of the railroad’s supporters – in their own words – with reality. Among his findings:

• Shortly before Amtrak was created in 1970 and began operating in 1971, Nixon Administration correspondence stated, “It is expected that the corporation would experience financial losses for about three years and then become a self-sustaining enterprise.” Since then, Amtrak has received a total of $44 billion of continuous federal subsidies (in today’s dollars).
• Other expressed goals in Amtrak Historical Society archives were to provide “modern service” and “on-time schedules.” Amtrak’s breakdown-prone Acela Express (the most high-tech train in the fleet) only shaves 30 minutes off the 4-hour New York to Boston travel time that New Haven Railroad’s trains provided 52 years ago. Late trains continue to be Amtrak’s “single largest area of complaint,” one reason why Amtrak recently admitted it could no longer provide a customer service guarantee.
• Amtrak began with the pledge that “present downward trends of ridership and revenue must be reversed” and that “uneconomic services must be curtailed.” Just five of Amtrak’s 40 routes account for half its riders and revenue. Others are hopelessly unprofitable: the Janesville, Wisconsin-Chicago route loses some $580 per passenger, covering only 6 percent of its costs.
• Meanwhile, as ridership on Amtrak’s supposedly “lucrative” Northeast Corridor averages a paltry 1.5 percent annual increase, commuter lines run by Amtrak under strict contracts have seen nearly 15 times the growth.
• Even the simple goal of providing “appetizing meals” has often eluded Amtrak: the FDA imposed an injunction on the railroad after repeated food safety violations on dining cars.

Pace blames these persistent problems on elected officials who are “more interested in political patronage jobs than reforms that will benefit passengers and taxpayers.” For example, in 1997 Congress passed legislation that required Amtrak to liquidate its assets unless it reached self-sufficiency by December 2, 2002 (yesterday). However, an amendment ushered to passage late last year by Sens. Biden (who commutes on Amtrak) and Hollings blocked Amtrak from spending any funds on liquidation.

A better plan, according to the author, would be to empower a federal oversight committee to auction Amtrak’s desirable assets to numerous interested bidders (whom Pace identifies), and permit regional railroads in the Northeast and Far West to expand their increasingly popular passenger services.

“Ironically, the best way to salvage the image and future of passenger rail in America is to dissolve the very entity once thought to hold that promise,” Pace concluded. “Thirty-two years of Amtrak ‘rail fraud’ must end for long-term train travel in America to really begin.”

NTU is a non-profit, non-partisan organization working for lower taxes, less wasteful spending, and accountable government at all levels. Note: Policy Paper 108, Rail Fraud: How Taxpayers Have Been Railroaded by Amtrak’s Promises, is available online at www.ntu.org.

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Related Links:

• Click Here for NTU Policy Paper 108

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