Last night in Philadelphia, an Amtrak regional train traveling from Washington, D.C. to New York derailed, leaving at least six dead and more than 100 injured. It’s a terrible, terrible tragedy. My family and I used to regularly ride that exact train — the 188 Northeast Regional — when we commuted between D.C. and Philadelphia while I was in graduate school. A former classmate of mine was in the train’s cafe car when it derailed last night. To me, that crash wasn’t just a story on TV about something that happened in a random place hundreds of miles away. It was personal.
That’s one reason I was shocked, in spite of my near-total cynicism, by the instant partisan political reaction to the crash. While first responders were still trying to get crash victims off the smoking trains, partisans took to Twitter to explain why all this had happened: those awful Republicans were starving Amtrak of cash.
Earlier today, relates to Amtrak derailment: Feds warn transportation funding is running out http://t.co/tO3f1aFl3A
— Anthony De Rosa (@AntDeRosa) May 13, 2015
Amtrak crash comes on the eve of … markup session to cut Amtrak budget http://t.co/aWta0t8tx1
— Blake Hounshell (@blakehounshell) May 13, 2015
The cognitive dissonance in watching those who advocated cutting Amtrak's funding suddenly bemoaning its lack of investment is staggering.
— Mr Media Training (@MrMediaTraining) May 13, 2015
AYFKM? Investigators still don’t know what caused the crash, but Facty McJournalist somehow magically knew the precise cause of the crash — a bank account balance with all its zeroes on the wrong side of the decimal point — within minutes of the crash?
“Amtrak doesn’t get enough government money,” is the kind of thing someone says when that person doesn’t understand anything about Amtrak, or government, or money.
Created by Congress in 1970, Amtrak was meant to replace the private rail companies that, according to Amtrak, “had operated services at a net loss of millions of dollars for many years.” Net losses of millions of dollars, you say? According to its unaudited financial statements, Amtrak lost over a billion dollars in 2014, the last year for which annual revenue and expense data are available.
Amtrak lost nearly $1.3 billion in 2013. Since its creation, Amtrak has racked up over $31 billion in accumulated losses. And every penny of those losses has been covered by federal taxpayers.
Amtrak has a lot of problems. A lack of taxpayer generosity is not one of them, not even close. The key to fixing Amtrak, to making it function as a “for-profit corporation,” which is how the Federal Railroad Administration, Amtrak’s overseer, officially describes the passenger rail organization, is not increasing the volume of federal cash it sucks up every year. The solution is not to reform this and that to make the government-owned company work better or more efficiently. And selling off its assets to the highest bidder won’t fix Amtrak, either.
No, the key to fixing Amtrak is to just give it away. Hand over the entire enterprise to whichever rail company wants it. “But that’s crazy!” you might say. “Giving it away for free makes no cents!”
Well, neither does keeping it on the taxpayers’ books. The status quo costs taxpayers at least a billion dollars each year. Given that the bulk of its rail traffic occurs in the well-heeled Northeast corridor, the company primarily serves as a means of transferring wealth from middle America to D.C., New York, and Boston. In its current form, Amtrak is less a for-profit passenger rail corporation and more a union jobs program (its ridiculous labor contracts are a major reason why the company is perpetually swimming in red ink).
Despite all the disingenuous chatter about a lack of infrastructure funding for Amtrak, the company’s salary costs absolutely dwarf its infrastructure depreciation expenses. In 2013, for example, Amtrak spent $2.1 billion on salaries, while it recorded $687 million in annual depreciation costs. Amtrak’s pension losses alone in 2013 totaled $425 million.
Amtrak’s problems have far more to do with terrible staff cost management than they do with a so-called lack of infrastructure funding. American taxpayers involuntarily dump over a billion dollars each year into Amtrak, and for what?
If you want to fix Amtrak, don’t mess with its budget or saddle it with top-down, government-mandated and government-managed reforms. Don’t sell it off. Just give it away. Give it to an organization that actually knows what it’s doing. Give it to a rail company that knows how to hire and manage staff and maintain its capital investments, all without dumping a billion-dollar invoice on American taxpayers every year.
If you want to save Amtrak, the solution is simple: just give it away.