Since its formation in 1971, Amtrak has been criticized for catering to neither the traveling public nor the taxpayer. Amtrak is unique in that it has cost the government over $45 billion in subsidies over the last 44 years, according to the Congressional Budget Office (CBO), a non-partisan agency. Matthew Sabas of the Manhattan Institute concluded that much of the waste is due to “unprofitable routes, overstaffed trains, and the mismanagement of its food services.” Sabas was not the first to point out Amtrak’s excessive spending and waste. In 1985, Tom Wicker wrote in the New York Times that David Stockholm (then-Director of the Office of Management and Budget (OMB)) “threw a tantrum the other day before a Senate subcommittee.” Stockholm said, “If senators did not have ‘the courage, the foresight, the comprehension’ to ‘pull the plug’ on what he called an ‘irredeemable’ Amtrak rail passenger system,” American taxpayers would have to continue to foot the bill. Stockholm was right. Amtrak still relies on public money.
A few weeks ago, the Republican-controlled House passed the Passenger Rail Reform and Investment Act of 2015 (PRRIA). The bill authorizes “appropriations totaling $7.2 billion over the 2016-2020 period for rail programs.” According to the CBO, that amount includes $5.3 billion for grants to Amtrak, $1.2 billion for grants to states for intercity rail projects, and $625 million to renegotiate and prepay a portion of Amtrak’s nonfederal debt.”
$7 billion is tough to imagine. But just to compare: Congress granted $6.9 billion to the National Science Foundation (NSF) in 2014. $7 billion is not pocket change, Amtrak’s subsidy could do a lot of good. Right now, however, it’s not. More importantly the $45 billion that Amtrak has consumed in past years could do much more good. It makes one wonder why Amtrak charges consumers so much for tickets on top of what consumers are already paying in taxes.
Amtrak, like other industries, must be subject to market forces. It is grossly unfair and undemocratic to prop up a flawed business on taxpayer dollars. As Sabas writes, Amtrak’s “promises of reform have never fully materialized into solvency, and its failure to follow congressional mandates never resulted in penalties.” Despite 44 years of operation, Amtrak remains insolvent. And while Americans protest bailout plans to the auto industry or too-big-to-fail banks, Amtrak continues to slide by without complaint. Amtrak executives must have realized their privilege: they don’t need to profit, so long as they continue to “improve.”
The ease with which this bill will pass points to a greater problem in American politics. Amtrak’s subsidy is not large enough for us to care, but it is large enough to matter. Even if Americans chose to do nothing about it, we should at least be aware that it exists.