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Tuesday, November 1, 2011

Amtrak ... More Government Waste

Amtrak has been owned and operated by the federal government since its inception in 1971. It has lost money for the taxpayer owners every year.

As I recall, the government entered the passenger rail business when the railroads decided that there was no viable business for passenger traffic. The railroads withdrew and the government took over. That was forty years ago, and while times have changed, the passenger rail's lack of viability hasn't changed. It's a constant money loser, pure and simple.

So why do we still have passenger rail traffic controlled and subsidized by the government? Absent a national need for such a subsidized passenger service, which there isn't, we shouldn't.

The taxpayers should be spared the continuing financial losses associated with owning Amtrak.

Amtrak's forty year string of annual losses is enough of a record. We don't need to continue the taxpayer agony and expense.

So what's Amtrak want to do? Continue to operate at a loss and be allowed to continue to lose taxpayer money indefinitely, that's what. And there's no apparent reason for the taxpayer to continue to underwrite Amtrak's loss generating operation.

Amtrak's Banner Year has this to say:

"Oh, and those 2011 operating subsidies are only a portion of Amtrak's line of taxpayer credit. The House Budget Committee says the railroad also received nearly $1 billion in capital subsidies, $52 million in debt restructuring relief (which climbs to $125 million in fiscal 2012), and access to a $562.9 million low-interest loan with the Department of Transportation. Amtrak's management has also requested $117 billion over the next 20 years to modernize the nation's tracks for 150 mph bullet trains.

Even the 30 million passenger trips on Amtrak are hardly a transportation milestone. Planes carry roughly two million passengers a day, or about as many passengers every two weeks as Amtrak carries in a year. For every person who rides Amtrak, more than 100 drive their cars from one city to another. Beyond the Washington-Boston corridor, trains account for 0.5% of all intercity trips, meaning that in most parts of the country Amtrak is an inconsequential and anachronistic mode of intercity travel. Building more lanes on the most congested interstate highways would be a far more efficient way to move Americans than continuing to fund Amtrak at $1.5 billion a year—or spending $20 billion on high-speed rail, as President Obama wants to do.

It's worth contrasting Amtrak's financial performance with what may be America's fastest-growing mode of transportation: new tech-savvy buses run by companies like Megabus, Coach USA and BoltBus, whose business was up 24% in 2010. These buses typically travel between major U.S. cities—say, from Chicago to St. Louis or Des Moines.

The fare from Manhattan to downtown Washington, D.C. can be as low as $10 or $20, compared with $150 or so for even a non-Acela Amtrak ticket. When Coach USA CEO Dale Moser was asked about these prices, he said, "you cut all that overhead out of your business, you find you can pass the savings on to consumers."

That is what Amtrak could have been doing for 40 years, but who needs efficiency when a rich Uncle covers the overhead?"

Well, good old Uncle Sam has run out of money to waste on Amtrak and similar endeavors. Just like the postal service, Solyndra and others.

Picking low hanging fruit off the government spending waste tree should be automatic. But, of course, it's not.

The fact that perennial money losers like Amtrak, the postal service, Solyndra and countless others continue to spend taxpayer money is disturbing, to say the least.

But let's resolve never to become used to it and never to accept it as a fait accompli. Someday we'll win and let's make that someday soon.

Thanks. Bob.

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