Amtrak has always intrigued me as a political parable: a stunning example of government’s inability to abandon the old, the stupid and the failed. Amtrak’s vital signs, never strong, have gradually weakened. Its ridership is stagnant. It was 16.6 million passengers in 1972 (45,000 a day), its first full year; in 1996 it was 19.7 million (54,000 daily). In the same period, the number of airline passengers has tripled, from 191 million (523,000 daily) to 581 million (1.6 million daily). All the while, Amtrak has drained $19 billion in federal subsidies from the Treasury, an amount now rising about $800 million a year.
And things may get worse. By the time you read this, Amtrak may be struck by 2,300 maintenance workers, who want an 18.5 percent wage increase over five years. Amtrak says that it cannot afford the raises, which, if extended to its 18,700 other unionized workers, would cost $440 million between now and 2000. Whatever happens, Amtrak is said to be drifting toward ““bankruptcy’’: a situation in which it might shut down because it can’t pay its bills. In fiscal 1997 it covered daily expenses only by supplementing its subsidies with $83 million in bank loans.(Why would any sane banker lend to Amtrak?)
Perhaps a crippling strike or cash crisis will concentrate Congress’s attention on Amtrak’s ultimate worth. But the record suggests that Amtrak will still survive. The main reason, I think, is that it enjoys undeserved public respectability. Some years ago, as I recall, the late John Chancellor gave a TV editorial on Amtrak. He described passenger trains as a sign of a civilized society. Chancellor was a decent man who captured popular opinion. Passenger trains are not merely nostalgic. They symbolize a more leisurely, relaxed way of life–a longing for escape from congestion and competition. They seem a sensible way to save energy and curb pollution. Trains seem enlightened.
Imagery triumphs over reality: trains provide few benefits, because they serve so few people. But no one wants to seem unenlightened; politicians dread being cast as the executioners of passenger service. The result is a huge capacity for delusion. When Congress created Amtrak in 1970, the idea was to shift the unprofitable passenger trains of private railroads to a new corporation that, after a small amount of federal money, would become profitable. This scheme, I wrote then, was doomed. Planes carried people long distances more quickly and cheaply; suburbs had ended the need for most short-distance, city-to-city trains. Except perhaps in dense corridors like the Northeast, trains made no sense.
Vranich now believes this–and worse. He thinks that Amtrak impedes first-rate, high-speed trains in the few corridors where they might thrive. ““All the visionary proposals for high-speed trains are non-Amtrak proposals,’’ he says. He came to this view the hard way: as president of the High Speed Rail Association, he watched Amtrak fight a proposal for a high-speed train between Dallas and Houston. The plan envisioned two-hour service that would make a profit; at the time, Amtrak had six-hour service (since discontinued). Still, it defended its monopoly.
No matter. Although most people don’t ride Amtrak, passenger trains exert their allure. So the delusion endures. Congress is now considering an Amtrak ““reform’’ to make it more ““businesslike’’ and shave subsidies. Is this a joke? Well, almost. If the ““reform’’ passes, it would trigger payment of a $2.3 billion tax ““refund’’ to Amtrak even though Amtrak has never paid taxes. This backdoor subsidy–crafted by Senate Finance Committee chairman William Roth of Delaware–would allow Amtrak to apply its losses against taxes paid by private railroads before 1971. This is an atrocious abuse of the tax code; it’s throwing good money after bad.
Amtrak’s problems are intractable, as many reports from the General Accounting Office have shown. Its equipment is aging. In 1987 the average passenger car was 15.6 years old; by 1996 it was 20.7 years. Without new investment, service will deteriorate; but new investments can’t pay for themselves. The only sensible reform is to shut down Amtrak. Allow a phaseout of a few years. States and localities could assume service that they deem essential. This would probably preserve trains in the Northeast Corridor, which now account for half Amtrak’s passengers (11 million in 1996). Maybe a few projects of the type Vranich envisions would emerge. Experimentation might be healthy.
The larger lesson here is government’s inability to end even the worst programs. If Amtrak survives, everything is safe. This puts the hoopla over the recent balanced-budget agreement in perspective. Congress and the White House actually did little to cut budget deficits. They would have dropped anyway. Look at the numbers. In early 1996 the Congressional Budget Office projected the deficit in the year 2000 at $244 billion. The latest CBO estimate is $48 billion. But almost 85 percent of the improvement reflects what CBO calls ““economic’’ and ““technical’’ changes: mostly, a stronger economy and higher-than-expected taxes.
Good government requires the capacity to emphasize the necessary and effective and eliminate the wasteful and unneeded. But what we see is a huge inertia that avoids such distinctions. ““I believed what I said about Amtrak when I was a young man,’’ Vranich says now. ““Do we have an obligation to speak up when we’ve created something that doesn’t work? I think we do . . . Amtrak is a failure. It will be a failure years from now.’’ This is common sense; it will probably go unheeded.
