Last Stop for the Great Train Robbery

(Washington, D.C.) – Citizens Against Government Waste (CAGW) today applauded the Bush Administration for  proposing to terminate Amtrak’s monopoly on intercity passenger service thereby introducing more competition.  The plan also calls for states to decide which services will be offered and to help cover costs, and will strip Amtrak of its major capital asset, the Northeast Corridor tracks, running from Washington through New York to Boston.

“At long last, steps are being taken to reform one of the most wasteful and inefficient government boondoggles in taxpayer history,” CAGW President Tom Schatz said.  “Since its creation, Amtrak has cost $500 million in subsidies per year, and had an operating loss of $1.1 billion in 2001.  Its intercity passenger service alone lost $87.20 per passenger in 2001.  Fewer and fewer people use it, due to less costly and more efficient alternatives, yet everyone pays for it through taxes.  A roundtrip Amtrak ticket from Washington, DC to Chicago costs $174 and takes about 43 hours.  Greyhound offers bus service at $89 and roundtrip travel time of about 32 hours.  United Airlines offers a roundtrip ticket for $184.50 with a total flight time of about 4 hours.  This is a perfect example of why Amtrak has reached the end of the line.”

Amtrak’s latest financial calamity is so critical that the railroad faces shut down in two weeks, during the peak of travel season, due to lack of funds.  As part of its reform plan, the administration is considering a guaranteed loan of at least $200 million, while the Senate would like to see funding included in its current supplemental bill.  Amtrak has calculated it will need at least $1.2 billion in next year’s budget to stay afloat.  The administration has stated it will oppose anything over $521 million and is encouraging states to take on more of the cost.

“This plan provides a viable solution to making Amtrak profitable and market-driven for the first time.  Many services will be contracted out, while inefficient routes will be eliminated unless states individually or collectively decide to subsidize them,” Schatz also said.

In the 2002 budget, several members of Congress earmarked millions of dollars for light rail projects in their states, including $14.5 million for California, Iowa, Maryland, New Mexico, and Utah.  California received $6.5 million for a project to extend light rail between Oceanside and Escondido, while Utah received $3 million for an extension of the system in Salt Lake City.

“Politicians love to pour money into rail systems, believing it is a key part of the country’s infrastructure.  However, the days of the Transcontinental Railroad are over, and people today rely mostly on cars and airplanes for transport,” concluded Schatz.  “The administration’s plan may end up being today’s golden spike that finally ends the wasteful boondoggle that is Amtrak.”

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.