Commentary

Put Amtrak in Hands of Private Company

By Edward L. Hudgins
This article was published in the Atlanta Journal-Constitution, Sept. 30, 2003.

Each year since its creation as a passenger railroad owned and operated by the federal government, Amtrak has promised it would break even, with its revenues covering its costs. It never has. Instead, American taxpayers have had to waste at least $25 billion to cover all its deficits. And what has the public received for its money? Not much.

Outside of the Washington-New York-Boston corridor and a few other areas of the country, Amtrak is not a significant or growing part of the transportation system. In 1980, Americans made about 21 million trips by Amtrak compared to about 300 million trips by commercial airlines. In 2000 they made 22.5 million trips by Amtrak, compared to some 700 million trips by air.

Amtrak accounted for only three-tenths of 1 percent of all trips taken in 2000; twice as many people took trips by small private planes.

It’s political pressure that keeps money-losing, half-empty trains running 12-hour routes when for not much more money, one could fly between the cities served by those trains in an hour.

Amtrak’s openness and honesty leave much to be desired. Even as WorldCom and Enron officials were being indicted for cooking the books, Amtrak was asking and being urged by some members of Congress to abandon generally accepted accounting principles so it could shuffle money between operating and capital accounts to hide its dire financial situation. Officers in private firms could go to jail for such deception.

Amtrak also fakes its on-time numbers. It measures punctuality only at select stops and will build in lots of extra time before those stops so trains can make up for lost time.

The Bush administration suggests turning some Amtrak routes over to the states and allowing them rather than Washington to subsidize the rail service.

But Amtrak should be privatized. Putting it officially into bankruptcy at least would allow a trustee to untangle its books. And a number of companies, including Britain’s Virgin, which has boosted ridership in that country to high post-World War II levels, have expressed interest in the Northeast Corridor.

But until it is out of government hands, Amtrak will continue to waste our money while providing anything but a public service.

Edward Hudgins is Washington director of the Objectivist Center and a Cato Institute adjunct scholar.