Very well written article on Amtrak’s Subsidy. This should get a good debate going…
This is a rebuttal to Representative John Mica’s “holy jihad” argument. Its deja vu all over again.
How is this “excellent” article in any way a rebuttal to Representative Mica?
Mr. Mica claims that that the Amtrak subsidy is multiples of alternative common carrier modes on a “per ticket” basis. Some of us have reasoned that the Amtrak subsidy is high on a passenger-mile basis. One can dicker and bicker about what boundary should be drawn and about all of the “hidden” subsidies, but I have long reasoned that the high rate of the Amtrak subsidy is an impediment to getting more public money to get more trains. The assertion had been made that I am obdurate with respect to “the facts” and it had been suggested in criticism that I can “go ahead and believe whatever I want”, but the way I see it, a more cost-effective Amtrak will be a more politicially popular Amtrak that could attract higher dollar amounts of support.
The argument is made (Chairman Boardman) that based on “fairness”, if the Highway Program receives 10 billion in General Revenue to make up to gas tax shortfall, Amtrak should maybe get 10 billion, or perhaps people should halt any complaints about Amtrak getting north of 1 billion?
This is the fairness concern of having 3 children in the family and the unsolvable geometry problem of dividing the remaining part of the apple pie in 3 identical portions, using the measurement tools available to the Ancient Greeks and to small kids. So if highways get a certain dollar amount, it is “unfair” that trains do not receive the same dollar amount?
What if Federal highway spending supports 25 percent of total passenger miles on Interstate highways alone, leaving out the substantial freight on those highways, and if we followed the European model, the same a
Paul,
I contend that the article is intended as a rebuttal to John Mica. I do not contend that you or like minded people will find it persuasive.
I call it “deja vu all over again” because it was written last September and before the recent election. The pro and con arguments have been made; I see no reason to simply repeat them.
You observe that it is desirable to have “a more cost effective Amtrak.” In fact recent figures show a historically small deficit for Amtrak. You may not find this entirely satisfactory but I hope you will agree it is a step in the right direction.
Where I disagree most with John Mica is his use of “Holy Jihad” rhetoric. I find that language inappropriate. You yourself do not use such language. I hope that indicates we agree on this particular point.
John
And who are those like-minded people? Plato? Aristotle? The Honorable Herbert Kohl, the now retired Senator from Wisconsin?
When Mr. Kohl, a staunch backer of trains whom I had personally thanked for that support at a “meet and greet”, was first running for that office, his opponent accused Mr. Kohl, a wealthy businessman who then owned a regional supermarket chain, of selling coffee cake for much more money to the US Army than what he charged in his store. In an on-camera political debate, he was prepared to answer this charge. When challenged on “coffee cake gate”, he pulled out a Kohl’s Foods coffee cake and a defense-contract coffee cake. The defense-contract cake was much larger, the kind of institutional package used for serving large groups of people economically, such as the soldiers an Army barracks, rather than the smaller family-sized package sold locally.
He patiently explained that the Army coffee cake cost more per cake but that it was actually a good value on a per serving basis, and the independent-minded voters in the State of Wisconsin who place reason above blind party loyalty found his argument persuasive.
So how is the rebuttal to John Mica, so purportedly unpersuasive to me and the like-minded unpersuasables that a person gives up trying, any different than State Representative Engeleiter’s breathless charge that businessman Herb Kohl was overcharging the Army for coffee cake, which was dramatically refuted and ending up costing her the election in Wisconsin?
The highwa
Paul M.
While I am not, and doubt I ever will be a passenger train supporter, I must tell you I enjoy your well reasoned, well written pieces. This is a classic.
Mac McCulloch
Paul,
I said “You or like minded people.” The phrase “like minded” refers back to you and means people who agree with you on this issue.
Representative Mica has every right to his opinion. However, I regard his phrase “Holy Jihad against Amtrak” as inappropriate.
I don’t mean to suggest that debate should be closed on this or any other issue. But if we simply repeat ourselves the conversation becomes tiresome for other people.
The coffee cake issue puzzles me. When I was in the Army there was plenty of coffee but no coffee cake.
John
You guys should really read the whole article next time before you debate it. That was the intent of me posting the link to the article to begin with.
According to the article we have 230 million rail passengers in this country sharing Amtrak infrastructure of that amount only 30 million passengers belong to Amtrak. To me that is a fairly persuasive argument that $1.7 Billion, largely applied to Amtrak Infrastructure is not a huge subsidy and not all that different from the Interstate Highway subsidy.
Further the article points out that Amtrak is mandated by Congress to operate it’s long distance train network and so that is not a free business decision. Is it fair to hold Amtrak financially responsible for that mandate?
Those are the two major points I gleened from the article which neither one of you addressed above. Perhaps you missed them?
Personal agendas can often sidetrack a discussion of issues.
These 2 points are very important in our debates and have been ignored too long by our posters including myself/.
The first point in particular alters the “numbers” that some repeatedly use as the basis for insisting that passenger rail, as seen in aggregated Amtrak figures, is very cost-ineffective compared to other transportation modes. The second point suggests that although elimination of LD routes is unlikely, reductions of those losses should be the goal. After all, with politically limited funding available, it is wise to use those funds where they can benefit the most people.
Yes, but sometimes the politics of the situation limits the ability to do this. It has been shown that were the Sunset Limited (which loses a lot of money) to operate daily instead of three times a week losses would be significantly reduced. However, Amtrak is unable to do that because of political reasons.
Be grateful that our benevolent overlords allow us to have anything. I don’t care which side of the political isle you sit whether it be left, right, or up and down. The fact of the matter is that the status quo is always going to limit rail and will make it worse off. Enjoy Amtrak before it is destroyed and enjoy the freight rail system before it suffers the same fate as passenger rail. Freight rail like passenger rail will be regulated out of existence in the name of “environmental protection” and “fairness”. Why can I say this?, because the EPA keeps raising emission standards and will do so to the point of making freight rail uneconomical. Re-regulation is also in the works as well. Uneconomical PTC systems are going to be shoved down their throats as well. As for high speed rail never going to be built that is why the timelines they are setting are several years down the road.
OntheBNSF: Be grateful that our benevolent overlords allow us to have anything. I don’t care which side of the political isle you sit whether it be left, right, or up and down. The fact of the matter is that the status quo is always going to limit rail and will make it worse off. Enjoy Amtrak before it is destroyed and enjoy the freight rail system before it suffers the same fate as passenger rail. Freight rail like passenger rail will be regulated out of existence in the name of “environmental protection” and “fairness”. Why can I say this?, because the EPA keeps raising emission standards and will do so to the point of making freight rail uneconomical. Re-regulation is also in the works as well. Uneconomical PTC systems are going to be shoved down their throats as well. As for high speed rail never going to be built that is why the timelines they are setting are several years down the road.
Interesting, if rather gloomy and politically-charged speculations. Any sources?
You can look some of them up yourself. The Epa is going to increase emission standards via Tier 4 emission standards. These emission standards will greatly reduce horsepower and require more locomotives than before thus increasing equipment cost and maintenance. PTC systems are very expensive and railroads are unwilling to upgrade themselves. Re-regulation has been discussed time and time again. If these measures are implemented then it will have the effect of driving up costs and making it far less economical which would cause shipper to use other modes of transit. High speed rail projects were consistently rejected and the ones that are in the works are in the time period of decades to build.
It is true that the Federal Government came close to destroying our rail system. But somehow at the last minute they were overcome by common sense and passed the Staggers act. But I am hopeful that Congress will see the light. They won’t force large amounts of freight onto our interstates because right now those interstates are crumbling and they don’t know where to find the money to repair them. But that remains more of a hope than a belief.
That’s one of the biggest problems with the analysis. If you want the avg subsidy per rider, you have to add in ALL the direct subsidies. You can’t just count just the Amtrak subsidy and divide by the total rail passenger count. Farebox recovery in the commuter rail world is generally 50% or less. And, the avg fare for commuter trips is much less than the avg Amtrak fare - for obvious reasons. Should we add in all the riders of the NYC TA 1,2, and 3 trains because they happen to run through Penn Station?
There is a hint that there is a cross-subsidy from Amtrak to the commuter rail world and that is used as justification for Amtrak’s subsidy. If it exists, Amtrak should use it as justification to up their tenant fees!
The problem isn’t whether there are subsidies - it’s how effective they are AND how effective they could be. If my kid came home from school with a C and I knew he was capable of a B+, why would I listen to his pleas that it’s okay because lots of other kids got Cs?
Well, Amtrak is capable of Bs and they have been getting Ds.
I don’t know about that. Considering the political climate, demands by labor, and much else that is the environment Amtrak works in, I think they deserve at least a C+ or B-. And the political, social, and economic environment is very hard to change.
On this subsidy business. And here I run smack into conflict with the kind of thinking of Sam1:
Doesn’t the once a year vacation traveler deserve a subsidy somewhat in the same order of magnitude, if not quite as great, as the daily commuter, regardless if the daily commuter is using Amtrak between Phily and NY or Old Orchard Beach and Boston or one of the commuter operations?
What about the once a lifetime college student seeing the country as his graduation present?
And I do believe Amtrak does on occasion save lives.
Framed in that way, Dave, I tend to agree with you, and that represents a definite compromised view for me. Maybe not so much really deserve, but maybe it is part of the cost of building a sufficient constituency to get on with the main show.
The fundamental problem with ANY government run mode of transportation is that there will always be conflict. You either end up with a one size fits all solution. Imagine if the government was in the shoe business people would always be in conflict over what kinds of shoes are produced, what materials they are made from, and what size etc. vs. buying shoes today on the market where there is no conflict and people simply choose the shoes they find desirable. IF the government ran shoes and either maintained a monopoly on shoes or semimonopoly then people would have to vote for shoes and the majority would get what it wants. Or you vote for politicians who think will produce the kind of shoes you want. With the government being transportation it ends becoming a political football and only the majority ever gets what they want. Either that you vote for people who think have your interest in mind People always fight argue over the merits of one mode of transport or another rather than simply choosing the mode that they find has the most merit. Eminent domain only serves to make this worse. Markets aren’t utopian ideas you deal with them almost everyday and without conflict. Taiwan, Hong Kong, Japan, and to lesser extent Europe have more of a market for transportation than we do and as such have less conflict than we do. Would I privatize sidewalks or city streets? Not in the traditional sense but I would make property owners, residents upon streets, or HOA’s the owners of such properties or retain ownership of them by cities and simply require that if you use them you pay for the full cost of using them. Just my .02