|ONLINE VERSION||NOVEMBER / DECEMBER 2001|
|Once again the battle over funding Amtrak
is starting to percolate and the preservation of tens of thousands of
unionized jobs are once again on the line. Also at issue is the
environment, national security and energy efficiency. It is time for
Congress and the President to stop using Amtrak as a political
football and provide a stable, dedicated source of funding to the most
efficient rail passenger transportation system on the Planet Earth.
A brief history of this issue is in order. Prior to becoming Amtrak, rail passenger service was operated by private, primarily freight railroads. In the heaviest traffic area in the Northeast, passenger service was mainly a part of the Penn Central Railroad. When the Penn Central (and much of the rest of Northeast freight service) went bankrupt, it was clear that one of the main reasons for its bankruptcy was its passenger operations.
All rail passenger operations in the world are a major service to their country – a mode of transportation which acts as a pressure valve for gridlocked highways and airports and the environmental pollution which results from such gridlock. Rail passenger operations also provide an energy efficient alternative to highway and air travel, assisting the U.S. in its stated goal to become less dependent on foreign oil.
As a result of major technological changes in the transportation field since the 1930s, the role of rail as part of the nation’s transportation system was dramatically redefined and reduced. The explosion in the capacity and use of the automobile and trucks, the growth of the interstate highway system, the technological revolution in the airline industry, and the U.S. and state governments providing hundreds of billions of dollars for roads, airports and air traffic control systems caused a massive downgrading in the role of rail as part of our national transportation system. These changes led to overwhelming financial problems for the rail industry in general and rail passenger service in particular. Bankruptcies and near bankruptcy were common: Rock Island, Milwaukee, the Northeast railroads, Southern Pacific. New federal legislation during the period of the 1970s and 1980s attempted to rationalize this, as rail was still a critical component of our national transportation system.
In the early 1970s, Federal legislation created Amtrak as the main provider of intercity passenger service throughout the United States. Almost simultaneously, Congress created Conrail as the means to revitalize the railroad industry in the Northeast. In the early 1980s, Congress stripped the various commuter operations from Conrail, creating New Jersey Transit, SEPTA, Metro North, MARC and other commuter operations. Amtrak and the commuters were stripped from the freight railroads for primarily one reason – a recognition that rail passenger service required public subsidies and would bankrupt private rail freight operations if those operations were required to foot the bill for rail passenger operations.
Since its creation, Amtrak has been a major success, utilizing miserly federal subsidies to provide critical national rail passenger service. Costing the federal government between $30 and $40 billion since its creation, Amtrak obtains more percentage of its revenue from the fare box than any intercity rail passenger service in the world. This means that the U.S. government provides less subsidies for intercity rail passenger service than any other government in the industrialized world. The $30 to $40 billion the government has spent since 1970 is a minuscule percentage of what it has provided for roads, airports and the air traffic control system.
Everyone understood that privatization of intercity rail passenger service had failed – a significant reason for the bankruptcy of some railroads which were primarily freight operations. And everyone understood that in order for the United States to continue to provide intercity rail passenger service, there would necessarily be government subsidies, primarily for capital costs but also for operations.
Nevertheless, when Congress created Amtrak, it also gave Amtrak a mandate to make a profit. Ever since Congress has used Amtrak funding as a political football, never providing Amtrak the subsidies it needed to really blossom and continually criticizing Amtrak for not producing a profit. In one State of the Union address in the mid 1980s, President Reagan stated his intention – as one of the goals of his Administration for that year – to eliminate Amtrak.
Despite all of this, there has been a bi-partisan consensus that Amtrak must continue and it has been funded every year – though at levels well below its needs. During the last major legislative battle around Amtrak (1997), Congress provided $2 billion in funding and put requirements that Amtrak become operationally self-sufficient by 2003. It also created an oversight Committee called the Amtrak Reform Council to determine if Amtrak would be able to reach operational self sufficiency by 2003.
It was clear from the very beginning that the ARC was controlled by a cabal of right wing, anti-Amtrak ideologues and people who had a vested interest in seeing that Amtrak failed, so they and their friends could personally benefit from Amtrak’s demise. At first they were hell-bent on "privatizing" Amtrak – a tried and true method of bankrupting Amtrak and ending intercity rail passenger service. After suffering political defeats by the bi-partisan Congressional supporters of Amtrak, the ARC became smarter and attempted to sound more reasonable in order to attract support for its goal – the destruction of Amtrak.
It was becoming clear to the bi-partisan supporters of Amtrak in Congress that self-sufficiency was impossible for an intercity rail passenger company to achieve, and this year several pieces of legislation were introduced in both Houses which would have the effect of increasing federal funding for Amtrak and continuing its existence. Some of these pieces of legislation would also give Amtrak the primary responsibility for developing and implementing high speed rail operations throughout the United States and in critical, auto, truck and air gridlocked rail corridors.
Then came September 11. Suddenly everyone realized the critical importance of Amtrak in the national passenger transportation scheme. Ridership grew. Everyone realized an alternate source of safe intercity travel was necessary to the national interest. Legislation was introduced in the Senate by Senator Hollings which would, in addition to providing more funding to Amtrak, end the self sufficiency requirements of the 1997 Bill.
In response to this, the ARC, by a 6 to 5 vote, issued a finding which requires Amtrak to submit a liquidation plan to Congress within 90 days of November 9, 2001. Although Congress would ultimately decide whether to act on this liquidation plan, the finding, which was opposed by the Bush Administration (Secretary of Transportation Mineta voted against it), has the immediate effect of downgrading Amtrak’s credit rating and makes it nearly impossible for it to borrow at reasonable rates – as creditors are aware that Amtrak may be liquidated. The action could cause Amtrak to declare bankruptcy.
One of the reprehensible idiots on ARC actually stated that ARC needed to act now and declare it impossible for Amtrak to meet its self sufficiency requirement. This is without even seeing the economic results from this quarter in which Amtrak’s ridership has increased dramatically. Clearly the real reason he wants the ARC to act now is to head off the Hollings Bill. He convinced a majority of the anti-Amtrak Board to issue the ill-advised finding with the deciding anti-Amtrak vote being cast by the Mayor of Milwaukee, Wisconsin – Mayor Norquist. This unpatriotic, anti-Amtrak cabal on ARC would not even allow the events of September 11 to influence their personal and ideological goals to bring down Amtrak and are obviously willing to inflict harm on the USA in order to achieve their personally lucrative and/or ideological goals.
AFL-CIO President John J. Sweeney immediately issued a statement on November 9 urging Congress and the White House to "sunset" the ARC and put it out of business in favor of a responsible debate about the future of Amtrak and our national rail passenger system.
And so once again we are in for a legislative battle of monumental proportions in order to preserve Amtrak for the riding public, defend the security and national interests of the United States and protect our membership. We will keep you informed.