January 2002 Porker of the Month | Citizens Against Government Waste

January 2002 Porker of the Month

Press Release

Sens. Joe Biden (D-Del.) and Ernest “Fritz” Hollings (D-S.C.) must have been hoping for a belated Christmas gift or may have had one too many glasses of eggnog when they slipped an amendment into the defense spending bill barring Amtrak from spending money on a liquidation plan.  After all, former Amtrak public affairs official Joseph Vranich has accused the taxpayer-subsidized railroad of “adding pork-barrel trains to the districts of politically-connected officials.” 

On the surface, it may seem as if liquidating Amtrak post-9/11 is unadvisable.  Business is good right now, isn’t it?

Well, business ain’t exactly boomin’.  While early reports said Amtrak ridership was up after the terrorist attacks, in November Amtrak admitted its September 2001 ridership was down six percent from the same month in 2000.  October ridership was down too.

For the last twenty years, Amtrak has been the poster child for government inefficiency and the terrorist attacks have done nothing to change that.  Amtrak hasn’t turned a profit since its birth in 1971 even though it’s received $23 billion in federal subsidies.  In 2000, the railroad lost a whopping $500 million. A 1979 study showed Amtrak passengers were the most heavily subsidized travelers in the U.S. 

In 1994, at Congress’ behest, Amtrak’s Board of Directors finally sought to end this subsidization, adopting a plan to be free of federal support by 2002. The Amtrak Reform and Accountability Act (ARAA) of 1997 modified the plan, extending Amtrak’s deadline for self-sufficiency one year.  If the railroad couldn’t be self-sufficient by then, the Amtrak Reform Council, a watchdog group funded by Congress but independent of the railroad, was to submit, by Feb. 7, 2002, a plan for liquidation.  General Accounting Office (GAO) reports in March, May and June 1998 predicted the deadline wouldn’t be met; the Amtrak Reform Council just recently came to the same conclusion.

The amendment offered by Sens. Biden and Hollings ignores the law, and taxpayer interests.

This is not this “dynamic duo” has tried to save the drowning Amtrak.  A month after the attacks, Sen. Hollings introduced (Sen. Biden cosponsored) the Railroad Advancement and Infrastructure Law for the 21st Century, which would give Amtrak an additional $4.4 billion in direct subsidies and altogether eliminate Amtrak’s deadline for self-sufficiency.  That legislation remains bottled up in committee.

It’s time Amtrak, and its supporters, take a ride into the 21st century -- without taxpayer subsidies.  That means following CAGW’s long-standing recommendation of cutting less-profitable routes.  These routes are not attractive to consumers (they cost about the same amount as an airline ticket, but take about ten times the amount of time) and are a drag on the railroad’s budget.  According to the GAO, five of Amtrak’s 40 routes account for half of its riders and revenue.  All those routes are short trips within California and the Northeast, where its costs the roughly the same amount of time and money to take a plane or train.  Fourteen routes lost more than $100 per passenger trip. 

Even the railroad’s president, George Warren, calls Amtrak “a business model that doesn’t work.”  It’s time Sens. Biden and Hollings see that.

For not recognizing a bad business model when they see one and for expecting the taxpayers to bail out that business when it fails, CAGW names Sen. Joseph Biden and Sen. Fritz Hollings as January 2002 Porkers of the Month.

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