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Rail News Home Rail Industry Trends

October 2012





Part 1 : Rail industry stakeholders weigh in on 2012 election issues

Part 2 : Transportation infrastructure investment in an era of partisanship

Part 3 : Is federal funding for Amtrak at stake?

Part 4 : To what extent is rail transportation investment at risk?

Part 5 : Freight-rail regulation: Will re-reg resurface?

Part 6 : Truck size and weight will continue to be an issue for railroads

Part 7 Online Only: Election 2012: Rail experts sound off on funding, retirement, rules, policies and taxes

Rail News: Rail Industry Trends

Is federal funding for Amtrak at stake?



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At their national convention in late August, Republicans approved a party platform that calls for ending federal funding for Amtrak, calling it "an extremely expensive railroad."

If elected, Gov. Romney, too, has said he would eliminate Amtrak's subsidy. In August and September, the House Transportation and Infrastructure Committee held three hearings on Amtrak's operations. "Taxpayers have been footing the bill for Amtrak's gravy train for over 40 years, and all they've gotten in return for their $40 billion investment is an inefficient, costly, Soviet-style passenger rail system," Transportation and Infrastructure Committee Chairman John Mica (R-FL) said at a Sept. 20 hearing.

OneRail's Canby describes the calls for eliminating Amtrak's federal subsidy "disturbing."

"We've been down that path before and it didn't work," she says. "We go through periods where Amtrak is starved for capital, and that's no way to run a transportation service."

Meanwhile, the Obama administration has indicated it's pro-passenger rail, and included major investments in the American Recovery and Reinvestment Act.

Does that mean transit rail would be doomed under a Romney presidency and thrive in a second Obama term? It's not that simple, says Richard Arena, president of the Association for Public Transportation (APT) and Massachusetts Association of Railroad Passengers, which advocates for transportation infrastructure improvements in Massachusetts and the Northeast.

For one, President Obama's talk of dedicating long-term funding for high-speed and intercity passenger rail investments never evolved into anything beyond, well, talk, observers say. And for what it's worth, Amtrak isn't mentioned in the Democratic platform.

On the flip side, Romney likely isn't as anti-rail as his campaign would suggest. As Massachusetts' governor from 2003 to 2007, he authorized a $600 million commonwealth-funded project to add rail service to the South Shore, says Arena. And, Romney knows firsthand the importance of the Northeast Corridor and Acela services to the region's economy.

"I find it very difficult to believe he'd come into office as president and deal a crushing blow to a critical piece of passenger rail in the Northeast," NRC's Baker says. "He's a businessman that understands good investments and bad investments, and it's just very difficult to imagine that actually happening."

Amtrak officials certainly hope so. The railroad declined to comment for this article, but spokesperson Steve Kulm did offer up some points about Amtrak, noting that they are merely "factual statements and not in response to the GOP platform." Among his points:

  • Federal operating support is key for long-distance service and federal capital support is key to keeping the Northeast Corridor infrastructure up and running.
  • Ridership is up 44 percent since FY2002, and the railroad has set annual ridership records in eight of the past nine years (and is on pace to set a new record for FY2012, as well).
  • Amtrak covers 79 percent of its operating costs through ticket sales alone and 85 percent of its operating costs with non-federal dollars.
  • Debt has been cut nearly 60 percent since FY2002.
  • For FY2013, Amtrak requested $450 million for operating costs, less than the $466 million Congress appropriated for FY2012.

Even though it's unlikely that Amtrak subsidies would be completely eliminated under a Romney presidency — or inflated under a second Obama term — both Schank and Baker believe the administration and Congress could (and should) implement some Amtrak reforms.

"I do believe there are some opportunities for Amtrak to continue to be made more efficient," NRC's Baker says, citing the potential to contract out more construction and maintenance work. "But I don't believe that it's reasonable or possible to completely turn Amtrak operations over to a private operator to totally privatize Amtrak."

To Schank, there's a bigger issue.

"I would like to see somebody put forward a proposal for rethinking how we do passenger rail in this country," he says. "Whether it's with private or public funding is irrelevant — there needs to be funding for Amtrak — but it's not working as well as it could. Our passenger-rail system is still well behind that of other industrialized countries, and there was nothing in either platform rethinking that."

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