Vice President Joe Biden, America’s First Conductor, along with Ray LaHood, the Secretary of Transportation, announced a new plan yesterday that will pump money into Amtrak in order to update and upgrade their rail service.
Of course he did. At this point, over two years into his vice-presidency, he’s still probably best known for his love of trains. Well, that or his frequent speaking gaffes.
It’s a six-year, $53 billion plan—yes, billion—intended to bring passenger train service to 80 percent of the country within 25 years. It’s supposed to create jobs and improve the infrastructure. I’m not sure how a six-year plan takes 25 years to be completed, but beyond that, the passenger rail system hasn’t been an important part of American infrastructure in decades. Businessmen use it, as do occasional vacationers and college students, but it’s hardly an essential component of American life.
Amtrak is the passenger rail system in the United States, there is no other option, and it’s because of enormous subsidies like this. Last fiscal year, Amtrak set a record in ticket sales, bringing in $1.74 billion. That sounds good at first, but their total revenue was $2.5 billion and their total expenses were $3.7 billion; and Amtrak’s been running deficits like this for pretty much forever.
Furthermore, last year, Amtrak got a federal subsidy of over $2 billion (Amtrak’s FY 2010 report is here).
And it’s only going to get worse now with the new $53 billion plan Biden announced, $8 billion of which will be forked over this year.
Are passenger rails really that important? So important that they need to be operated using taxpayer money? If you answered no, I’ve got one of those awesome wooden train whistles for you.
If Amtrak weren’t a massive government-supported monopoly and operated in the same manner, it would have gone out of business long ago. Is the passenger rail option a good option for travel? Probably, but not when run by the government. A quick look at the enormous subsidies combined with the equally enormous deficits, despite record ticket sales should be enough evidence.
But this is about jobs, apparently. As Biden said, “We all agree we need to cut spending to get the deficit under control.” But, “When it comes to jobs, there are three key places where we cannot compromise. We cannot compromise on education, innovation or infrastructure.”
This sure isn’t a good first step to cutting spending. Infrastructure or no, if Amtrak is so essential to the American people, it should be able to be run in such a way that it does not lose billions of dollars despite massive government subsidies.
Biden’s proposal still needs to pass through the House and Senate, so this could all be moot, but if history tells us anything, Amtrak will get paid. Or, more accurately, we will pay Amtrak (twice, if you actually want to buy a ticket).
