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AMTRAK'S PROBLEM ISN'T FUNDING, IT'S SPENDING

On-time performance has long been Amtrak's principal strength . . . not the trains, but the financial crises.

Little seems more predictable than Amtrak's periodic budget crises and calls for more money from those naive enough to believe that nostalgia should be publicly financed. The latest chapter is a new U.S. Department of Transportation Inspector General report indicating Amtrak is experiencing unsustainably large losses and is deferring needed investment.

Amtrak has been less than persistent about spending wisely or undertaking serious cost control. Taxpayer subsidies to Amtrak are higher than the total cost per passenger mile of buses or airlines or driving. On some of Amtrak's routes, it would cost taxpayers less to purchase airline tickets for passengers. Amtrak's problem is not funding, it is spending.

Efforts to control costs have come and gone. In 1997, Congress passed the Amtrak Reform and Accountability Act, which established an objective of an operating subsidy-free Amtrak by 2002. The act established the Amtrak Reform Council to monitor its performance and to warn Congress if it appeared Amtrak would not achieve the target.

Until the summer of 2001, Amtrak officials assured Congress and the ARC the objective would be reached. Amtrak leadership, now mercifully replaced, misled the public and fell hundreds of millions short. The ARC notified Congress that Amtrak would not achieve self-sufficiency and prepared a legislatively required report outlining ways to improve Amtrak's performance. Now, nearly three years later, none of the reforms has been implemented, and Amtrak is in deep trouble.

With a new lease on life, the Bush administration and Congress should return to the fundamental questions that led to the 1997 act: Just why are U.S. taxpayers subsidizing intercity passenger rail?

Is Amtrak subsidized because without it, large numbers of people would be without transportation? Not at all. The nation's airline and bus systems serve more destinations, and they do so with little or no subsidy per passenger mile.

Is Amtrak subsidized because trains serve some inherent public purpose? Again, the answer is no. For the most part, train subsidies are subsidies to a yesterday that will never return. Pretending it is 1920 does not make it 1920. Cars, airplanes and buses are here to stay, and they are far less costly than Amtrak.

Is Amtrak subsidized because it is crucial to transportation in the Northeast Corridor, from Washington, D.C., to New York and Boston? Only in the Northeast Corridor is there more than a trickle of demand for train service. This is because the area is so highly populated.

The corridor could become profitable if it were operated on commercial principles. There has been interest from the private sector in purchasing the system from the federal government. The Northeast Corridor should be preserved if it can be profitable, and the process of conversion ought to start without delay. But as for the rest of the system, it should either pay for itself or be discontinued. It is time to stop subsidizing yesterday.

Wendell Cox was a member of the Amtrak Reform Council from 1999 to 2002.

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