AMTRAK is highly subsidized. In fact the subsidies are in the billions. Some dollars were eliminated amounting to $71 million that was due to sequestration, an effective ploy designed and implemented by the White House. There are routes that are not financially prudent to run at all.
Lawmakers appropriated more than $1.5 billion in 2013 to subsidize intercity passenger rail services provided by the National Railroad Passenger Corporation—or Amtrak—including $1.0 billion in grants for capital expenses and debt service, $0.5 billion in grants for operating subsidies, and $0.1 billion for disaster mitigation and repair work after Hurricane Sandy. Those amounts were subsequently reduced by a total of $71 million by sequestration. All told, the government covers almost all of Amtrak’s capital costs as well as more than 10 percent of its operating costs. In 1970, when the Congress established Amtrak, it anticipated subsidizing the railroad for only a short time, until it became self-supporting. Since then, however, the federal subsidies to Amtrak have totaled about $45 billion. This option would eliminate those subsidies, yielding savings of $15 billion from 2015 through 2023, the Congressional Budget Office estimates.
An argument in favor of this option is that federal funding is subsidizing the operation of uneconomic services and routes (including sleeper-class service and many long-distance routes) that are not used extensively and provide little public benefit in terms of reducing congestion or emissions of greenhouse gases. Eliminating Amtrak’s federal subsidy would encourage its managers to improve operating efficiency, in part by cutting unprofitable services and routes. It is also argued that if states or localities value those routes highly, they should be prepared to subsidize their operation (as is already done in some cases).
So first out to the microphone was Nancy Pelosi blaming the Republicans for cutting funding on AMTRAK. Next up was Chuck Schumer telegraphing the same blame on lack of funding.
Another hidden fact with regard to managing rail systems is a piece of software that performs much like a governor known as PTC, positive train control. This PTC was installed in the AMTRAK train 188 but it was turned off due in part to more testing. Failed funding on rail infrastructure was no to blame for the deadly disaster, it was speed. The 2 black boxes have been recovered and prove the train and rails had not failed.
To further rebut Pelosi and Schumer, more facts need to be shared with regard to their claims of lack of funding.
Amtrak Collected $1.3 Billion From Stimulus
The grant noted that roughly 50 percent of the money went to “infrastructure improvements” in the Northeast Corridor.
The funding, all of which has been allocated, paid for 154 individual projects in 46 states, and the District of Columbia. The grant mandated that at least $850 million go directly to infrastructure.
“The American Recovery and Reinvestment Act (ARRA) appropriated $1.3 billion to Amtrak for capital investment,” the grant states. “The ARRA requires that Amtrak allocate $850 million for funding to rebuild and modernize infrastructure and equipment.”
Amtrak can’t be bothered to finish up a safety system on time. But did Amtrak CEO Joseph Boardman ever miss a nickel of his $350,000-a-year salary? No. Did Amtrak fail to pay employee bonuses? No—in fact, it paid bonuses to people who weren’t even eligible for them, and then refused to rescind them once it was pointed out that they were unauthorized. So Amtrak took care of Amtrak’s priorities, just like every other government agency. But Amtrak’s priorities are not its customers’ priorities. And that new safety system that was supposed to be operating by the end of the year at the latest? Maybe by 2020. Maybe not.
