Pick an Agency, Any Agency: Amtrak

As fiscal conservatives continue to seek avenues through which to derail the federal gravy train, it helps from time to time to take a look at the mind-numbingly long list of federal departments and agencies that are on board. Of course, this list is hardly exhaustive – just one that is publicly available – but it can certainly give us some concrete ideas on how and where to cut the spending.

Today: The National Railroad Passenger Corporation (Amtrak)

Amtrak Logo

About: “The National Railroad Passenger Corporation, doing business as Amtrak (reporting mark AMTK), is a government-owned corporation that was organized on May 1, 1971, to provide intercity passenger train service in the United States.”
FY 2010 Budget: $2.02 billion (Source)

As I recently contemplated a trip in several weeks from New York City to visit friends in Washington, DC, I considered my options. Being on a tight budget as a college student, a flight was out of the question – besides, the trip isn’t so far, and I’d rather not subject myself to whatever the airport security standards happen to be in a few weeks. Fortunately, I turned to one of the many privately-run bus lines that operates on a 24/7 basis for a great deal: at only $17 round-trip, a 4-and-a-half hour bus ride would be a breeze, especially with the wireless internet.

I never so much as considered Amtrak – who, at the time of this writing, are offering $98 round-trip tickets for the same weekend. It’s true that passenger rail services can’t compete along such a frequently traveled route, and it has been for years: Amtrak was created in 1971 due to the declining number of rail passengers. Rather than allowing the free market to work, however, the all-knowing bureaucrats in Washington were convinced that passenger rail was essential to America, and that Amtrak would break a profit in a mere 4 years. Indeed, the only thing more unreliable than government projections are the experts who tout them.

At an annual cost of $2.02 billion, the recent reports of increased ridership for Amtrak are laughable. Even with its record of 28.7 million passengers in 2008, the taxpayer’s cost per passenger averages out to over $70 per passenger – you’re pretty much paying for someone to take a ride on Amtrak this year. Yet, despite the many statements by presidents of the failed enterprise, the federal government is under no false pretense that Amtrak will make money, in the near future or ever. The Amtrak Improvement Act of 1978 removed the entity’s “for-profit” status, and Congress has never had any hesitation in expanding and increasing the funding, whether under Republican or Democratic administrations.

According to its Wikipedia page, the causes of decline in passenger rail were: (1) Government regulation and labor issues; (2) Taxation; (3) Subsidized competition; and (4) Loss of U.S. Mail contracts. All four are based on government intervention in the transportation market. Predictably (as with so many of the government’s failures, such as the sub-prime housing meltdown), the solution to these government failures was to get the government involved to an even greater extent through nationalization. Predictably, the National Railroad Passenger Corporation has failed miserably to revive the industry, and now serves only as a fiscal drain which is more outflanked by private sector competition than ever before.

As for the constitutionality of a government-owned and operated business, what can really be said? There is clearly no authorization for the federal government to start a national corporation for the purpose of…well…what is the purpose of this again? Has anyone ever asked any official or representative where the Constitution grants the federal government the power to run a failing rail system? I’m sure it has something to do with “regulating interstate commerce” for some contrived reason.

Did I mention that the Obama administration’s stimulus bill contained an additional $1 billion for Amtrak? Apparently railroad passengers are the lifeblood of the modern economy.

Results
Constitutionality: None
Visibility: Fairly high
Ease of Abolishing: Moderate
Taxpayer Expense: High
Priority: High

Published in

Post a comment