The Democrats didn’t waste any time pushing for more funding for Amtrak after the Philly crash but anyone with half a brain knows you shouldn’t trust this push for more and bigger government funding. Here are some facts, yes, real facts to spread around to your liberal friends so they’ll zip it on demonizing the Republicans with lies and distortions…
The Tuesday night Amtrak derailment in Philadelphia that left eight dead and hundreds injured occurred when a train hit a curve at twice the 50 mile per hour speed limit. So, naturally, this tragedy has devolved into a political rumpus over infrastructure spending.
This reflexive demand for more public “investment” could benefit from a fact or two. House Republicans are supposedly to blame (retroactively?) for the crash because the Appropriations Committee passed a transportation funding measure Wednesday that hands Amtrak $289 million for operations and $850 million in capital grants—or about $260 million less than its normal annual take.
Never mind that Amtrak has pumped $2.6 billion into the 456-mile track called the northeast corridor over the last decade. The eight states along this route that connects Boston to Washington through New York and Philadelphia supplied another $2.4 billion, plus a one-time $1 billion fillip from the 2009 stimulus.
Liberals have also discovered a signaling technology called positive train control (PTC) that might have slowed down the train, and they claim Amtrak delayed installation for lack of funding. But Amtrak’s inspector general reported as far back as 2012 that the rollout was dogged by poor internal planning, budget overruns and unreliable engineering, adding that “Amtrak has not included total funding for PTC in its financial plan or congressional funding requests.”
The House bill tries to control costs and reform Amtrak mismanagement, such as its above-market union salaries and benefits (49% of 2014 expenses) and its wasteful food and beverage service. But this modest effort doesn’t reach the core problem, which is the political misallocation of “investment.”
Since Richard Nixon nationalized passenger rail in 1971, Amtrak has been hostage to Congress and has run deficits every year. The feds own all the preferred stock and pretend to require Amtrak to operate as a for-profit corporation. In reality, it must behave as a public utility and social charity.
In a 2014 audit, the Amtrak IG observed that management thought “so many legislatively mandated tasks and responsibilities had accumulated over time that it was unclear what to focus on. That view was evident in the company’s 2011 strategic plan, which had five strategic themes, seven strategies, numerous initiatives and dozens of performance measures.”
This hyper-politicization has intensified under President Obama, for whom Euro-style high-speed rail is a special fixation. Ryan Lizza reported in the New Yorker that Mr. Obama “was aggravated when he was told that none of the money from the stimulus would be spent on a signature project, a modern-day Hoover Dam or Interstate Highway System.” So we are getting the $68 billion California bullet train that few will ever ride when it opens in 2028.
Despite $3.2 billion in revenue in 2014, a good year, Amtrak required $227 million from taxpayers or 7% of its operating budget. After depreciation and other expenses, it reported a net loss of $1.1 billion. But this disguises the one route where passenger rail is economically rational: the northeast corridor. Amtrak earned $496.7 million on that discrete service in 2014 on strong ridership, up from $390.1 million the prior year. But most of this surplus is used to cross-subsidize unprofitable regional and long-distance service everywhere else.
The transfer supports overstaffed, unpopular routes that serve 523 stations in 46 states like the Zephyr, from Chicago to Emeryville, California, or the Empire Builder, from Milwaukee to Seattle. Refusing to stop these lines makes little sense, except for politics. In 2012, the latest year for which data are available, the Transportation Department reports that Amtrak fares averaged 34 cents per mile, versus 15 cents for domestic flights and about a quarter for cars.
There are 987 residents for every square mile along the northeast corridor and only 98 on average in the rest of the country. The population density, high traffic and business centers of the northeast are uniquely suited for rail. To the extent northeast rail could gain from capital investment, the cities along the line—which produce one of five dollars of U.S. GDP—are rich enough to finance their own transportation on the user-pays principle, especially as ticket sales rise.
The political class refuses to use the word infrastructure unless preceded by “crumbling,” but the truth is that current funding is poorly targeted and Congress won’t set priorities. Spinning off the northeast corridor from Amtrak, for example, to build a dedicated high-speed track that bypasses freight and commuter rail might be a viable idea.
Instead, “infrastructure” money too often flows to bike paths, nature trails and trolley cars. Every dollar spent connecting Merced to Bakersfield by rail is one that can’t be used to replace the Baltimore & Potomac tunnel in Maryland, built in 1873.
What any of this has to do with the Philadelphia disaster, who knows. Taxpayers intuitively understand that government has long contributed to public goods, from canals to the Internet. But they would be more willing to finance urgent highway, rail, bridge and airport projects if they had any reason to believe the money would be well spent.