Amtrak Derailed

[Joubert[$]]

Amtrak is going to stop running by mid-week if Congress doesn't supply additional funds. Some interesting twists are present in the story:

* In large urban stations, Amtrak owns facilities. For example, even though Chicago's transit system operates 80% of the traffic in the station, Amtrak owns and operates the station.

* Traffic through the northeast corridor from Boston to DC has been booming since 9/11. US Airways, which generated a significant amount of revenue in Eastern cities is struggling. If Amtrak goes bye-bye, US Air might be the value pick of the month.

* About 60,000 people a day ride Amtrak - half in that eastern corridor. That's a lot of people.

* Tracks and tunnels in NJ, NY and Massachusetts could also be shut down since they are owned by Amtrak. If a bankruptcy filing is made, commuter trains using those facilities could be grounded as well.

My take: I think we'll see an emergency appropriations bill on Monday or Tuesday. Sen. Byrd is trying to slip in $200 million as a rider on the anti-terrorism bill. Wrong place and probably not enough time. David Gunn, Amtrak's president, says he's going to start turning away passengers this week.

[soxfan[$]]

I hope they sort things out quickly. By July 3 would be good.

Ailsa
wondering if her holiday plans are in jeopardy

[kurt_messick]

Alas, Amtrak is always in jeopardy, it seems. Something needs to be done to put it on a firm footing, so it isn't always 'crisis of the week'

[Joubert[$]]

Well, Fr. Kurt, I believe that this may be Amtrak's last week to be in crisis if something isn't done.

Mineta is going to meet with the Amtrak board later today (Sunday) to inform them that "the administration is not interested in disrupting passenger rail service". If I were I on the Board, I would remind him to bring a check or a pledge. If Congress hits its recess without an appropriation, I do believe Amtrak will cease operations.

[Magick1]

I wonder what Amtrack's issue is.

From what I have read, they haven't made a profit since they have been in business. Maybe they need to have a big change in their accountants!

[brian_igo]

Originally posted by Magick1
I wonder what Amtrack's issue is.

From what I have read, they haven't made a profit since they have been in business. Maybe they need to have a big change in their accountants!

That is too funny! Bravo!

I don't have a problem with government subsidies for a struggling industry if, and this is a huge if, it can be demonstrated that if the industry fails it will cause disproportionate economic and social damage outside of its immediate circle. For example, we will not lose our aerospace industry if the Air Force cancels the F-22 program. But if the Navy stops building submarines, that industry (if you can call one company an industry) will disappear and the next time we need to buy a sub we will be starting from square one. Or consider crop subsidies. When paid to agricultural conglomerates it is nothing more than corporate welfare. But when subsidies help family owned farms stay in business, that has a dramatic effect on life across rural America.

So the question in my mind is, does passenger rail service rise to that level of serving a greater good?

I don't know. I'm not worried about passenger rail service in the northeast corridor. If Amtrak goes tits up, I suspect it will take about thirty seconds for a smart entrepeneur to step in. With a little competition, service and prices would probably be better.

But Amtrak's poster routes are another matter. Is being able to take in the views across the west by rail worth $200 million? As government programs go, that is chicken feed. But if Amtrak is not getting closer to financial solvency and if the evidence (thirty years worth) says passenger rail will never be self-sustaining, then is it time to pull the plug?

Like I said, I don't know. A buck a year won't make a difference in my life, and I'd rather my tax dollars support Amtrak than a lot of other things the government does. But that is the only defense I can make for keeping Amtrak alive.


Brian