Accessibility links

Amtrak Warns Service Will Shut Down Without Emergency Funding - 2002-06-22


America's biggest passenger rail service provider is in financial trouble. Last year, Amtrak lost more than $1 billion, and if it doesn't get a loan for $200 million by the end of next week, the company will have to shut down.

Critics say the problem is that Amtrak is inefficient. But company officials say there wouldn't be a problem, if the U.S. Congress gave Amtrak the money it needs, the way it gives money to the airline and highway construction industries.

Amtrak was created in 1971 by the U.S. Congress. America's private railroads were cutting back on passenger rail service and concentrating on freight, and lawmakers created Amtrak to ensure that travelers would still have the option of getting to their destinations by train. The company was subsidized with federal money, but in 1997, Congress mandated that Amtrak be self-sufficient by this year. The company, in other words, was supposed to be able to operate solely on the proceeds from its ticket sales. But Corinna van Veen, a spokesperson for Amtrak, says there was never any chance that goal would be met.

"There is no public transportation system in the world, no railroad in the world, that is self-sufficient," she said. "We obviously have routes that do better than others, but in order to provide a truly national public railroad system, we do need support from the government."

Many people in Congress and the Bush administration still want Amtrak to be self-sufficient, but realizing that's not going to happen any time soon, lawmakers have allocated $521 million to Amtrak for the next fiscal year. But Amtrak officials say that's not enough to run the railroad. They're asking the federal Department of Transportation to sign off on a $200 million loan that will get the company through this year, and they want Congress to give them another $500 million for next year.

Corinna van Veen says she thinks the request is very reasonable, considering that Congress spent $33 billion on highways last year, and another $11 billion on the airline industry, not counting the bailout that followed September 11.

"The government has supported highways, as well as the airline industry, at a far greater capacity than they have rail transportation," she said. "Last year, the federal government spent more money on road salt and cleaning up roadkill on our nation's highways than they did on passenger rail." There's a very good reason for this, says Senator John McCain from Arizona, in America's Southwest. Senator McCain represents a part of the country where vast distances separate cities. He says the federal government doesn't give a lot of money to Amtrak because the majority of Americans simply don't travel by train.

"Less than one percent of the traveling public uses rail as a means of going from one place to another," he said. "To think that someone is going to take Amtrak from Dallas to Phoenix, and from Phoenix to Los Angeles, which takes multiple hours of travel, as opposed to getting on an airplane is just foolishness."

Senator McCain has been one of Amtrak's sharpest critics. He was instrumental in getting the U.S. Congress to adopt the self-sufficiency mandate back in 1997, and despite the nearly $4 billion in debt that Amtrak has accumulated, Senator McCain still believes the railroad can be self-sufficient. But, he says, Amtrak is going to have to eliminate routes in those parts of the country where very few people live, and where trains are running with nearly empty cars.

"That may mean that you will have an east coast Amtrak, in the northeast corridor, and perhaps one on the west coast, and let them grow out from there as the need be," Sen. McCain said. "There's no way right now that a cross-country, trans-continental rail passenger service is gonna ever be financially viable."

But that's where Senator McCain is missing the point of Amtrak, says Bob Webster, a self-described train-enthusiast who has written several editorials calling for the government to give Amtrak more funding. Mr. Webster says Amtrak was never meant to be financially viable. It was meant to reach parts of the country, particularly in the midwest, where communities are sometimes hundreds of kilometers from airports.

"Sometimes you can't get there from here if you're only considering air travel," he said. "And some folks, you know, are at an age where they don't do a lot of driving anymore, or they can't drive for one reason or another. It could be vision problems or whatever. And the only practical method is by Amtrak."

Many people in Congress agree with Mr. Webster. There's a lot of opposition to a proposal recently released by the Department of Transportation, that would break Amtrak up and privatize some of the lines in the more sparsely populated parts of the country. Many lawmakers believe it would be impossible to get private companies to take over these non-profitable lines, and that the lines would simply disappear.

Meanwhile, there's still the matter of the $200 million Amtrak needs to get it through the rest of this year. Attorneys for the Department of Transportation are investigating whether the agency can legally guarantee those loans. Amtrak officials say that without a federal guarantee, no private bank will give the railroad any money, and Amtrak will have to begin shutting down all of its operations including the heavily traveled lines it runs in the densely populated Northeast by July 1.

Links

XS
SM
MD
LG