Amtrak’s $66 Billion Ticket

The government can’t run a railroad, but it sure can subsidize one.

WSJ editorial.

"The Senate’s $1 trillion infrastructure bill is leaving the station with $66 billion in new subsidies for Amtrak and passenger rail, but nobody should think this freight car of cash will end the government railroad’s problems.

Congress nationalized passenger rail in 1970, and a half century of experience shows why the government should never take over a private business. Congress has dictated Amtrak’s business model—from where and when trains run to whether and when workers may be laid off. Amtrak has never recorded a profit, despite heroic efforts by patriotic executives with private experience who have tried to install best business practices amid political obstacles.

While Amtrak can cover its operating costs along the Northeast Corridor, it doesn’t generate enough money to maintain, let alone upgrade, its trains. So the Senate bill loads up another financial bailout, which President Biden boasts would be the largest “investment” ever. As a Senator, Mr. Biden was a riding advertisement for Amtrak, commuting on the Acela between Delaware and Washington.

Riding the Acela can be relaxing—if you don’t care about getting somewhere on time or trying to work on a spotty WiFi connection. The Acela from Boston to Washington takes on average 6 hours and 50 minutes, and nearly three hours between New York and D.C. on a good day. Amtrak’s Northeast Corridor is getting $30 billion to repair its tracks and improve service, but we hear these promises every decade or so.

Another $12 billion will go toward intercity routes—e.g., Sacramento to San Francisco—that have commuter traffic. Highways connecting major cities in the Sun Belt are growing more congested as their populations swell, and increasing rail service can be less expensive than adding car lanes. It also requires less regulatory and physical bull-dozing.

But here’s the rub: The bill also pours $16 billion into Amtrak’s national network, which is a financial sinkhole. Some 4.5 million riders in 2019 took Amtrak’s long-distance routes that traverse the country—about a third as many as in the Northeast Corridor. Many of them are travelers nostalgic for the days of sleeper cars as glamorized in classic films.

Low-trafficked routes through rural regions make it harder for Amtrak to increase intercity trains that generate a larger economic benefit. Yet the Senate bill would prohibit Amtrak from changing or reducing service on long-distance routes, no matter how few riders they draw or how much money they lose. Amtrak won’t be allowed to lay off workers on these routes.

If all this weren’t bad enough, the Senate bill would also require Amtrak to employ at least one ticket agent at each station where there were at least an average of 40 passengers per day in 2017. Passengers nowadays can buy tickets on Amtrak’s website or at station kiosks. Employing ticket agents sucks up money that could be used improving service.

This is how government runs a business. Congress is mandating that Amtrak operate inefficiently to please labor unions and logrolling Members. As ever, Amtrak’s most important customers are in Congress."