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Mar 03, 2015

Amtrak Subsidies

Mr. Chairman:

Every year, as Amtrak’s operating losses have mounted, Congress has dutifully shoveled more money at it; every year, its Congressional supporters have promised reforms to bring these losses under control; and every year these promises have fallen flat.

This year, we’re told, “don’t worry.  We’re giving Amtrak five years to get its act together.”  How many times have we heard this promise? 

In 1997, facing mounting criticism, The Amtrak Reform and Accountability Act required Amtrak to operate without any federal operating assistance after 2002!

When it didn’t, in 2008 Pete Sessions attempted to eliminate its most expensive route from reauthorization.   Jim Oberstar called any reduction in subsidies a “preemptive strike” and promised the legislation would solve Amtrak’s problems.  

When it didn’t, in 2014, Paul Broun proposed eliminating subsidies just as my amendment does.  Tom Latham said “I concede that Amtrak could be more efficient.  However, it has made significant improvements in this area recently, and it is moving in the right direction.”

“Moving in the right direction.”

This year, taxpayers will subsidize Amtrak in the amount of $1.4 billion.   The bill before us will authorize $1.4 billion for NEXT YEAR.   Put another way, we will shell out $45 every time a passenger steps aboard an Amtrak train in direct losses billed to taxpayers.  That’s up from $32 of loss per passenger six years ago.  Despite endless promises, things are not getting better. 

Amtrak’s apologists claim this is a 40 percent reduction in authorized funding.  In fact, Amtrak received $1.4 billion in 2015 – the same as this bill authorizes in 2016. 

Outside experts have reported that over the next ten years, subsidizing Amtrak will cost taxpayers $49 billion.  Let me put that in family sized numbers: the average American family will cough up $392 from its taxes over the next ten years, just to pay for Amtrak’s losses.    What does that $392 out of a family’s taxes pay for?  Amtrak’s food and beverage employees are paid an average of $106,000 a year to provide a service that lost over $800 million over the last decade – just selling snacks on Amtrak trains.

Are we at least seeing improvements in service?  Not hardly.  Amtrak’s monthly on-time performance has significantly declined over the past year.

Bigger losses.  Declining service.  That is not “Moving in the right direction.”  That was a false promise then, just like all the other false promises we’ve heard since 1971, just like all the false promises I expect we’re about to hear.    

In last year’s appropriations debate, Amtrak’s apologists warned that cutting off the subsidies would – quote – “eliminate an entire transportation option.”  It does no such thing.

Amtrak claims that it runs a profit on the heavily-travelled Northeast corridor; and nothing in my amendment would change this.  Anything Amtrak makes on these profitable routes, Amtrak keeps.  With this amendment, Amtrak would be perfectly free to continue to operate and expand its Northeast Corridor from its own profits and to subsidize its other money-losing operations to the extent its profits would cover them.

However, this amendment would end the practice of forcing American taxpayers to grant hundreds of millions of dollars to the profitable Northeast Corridor and shovel billions of dollars into subsidizing unprofitable routes across the rest of the country.

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Tom McClintock
Tom`s Blog