Biden Unconcerned About Amtrak Waste

Feb 7, 2014 by AFP

By Akash Chougule

Yesterday, Vice President Joe Biden gave a speech at Philadelphia’s 30th Street Station to congratulate Amtrak on the unveiling of their newest line of locomotives, and to call for continued infrastructure investment – meaning more government spending. The nation’s publicly funded railroad service introduced one of the new “Cities Sprinter” electric engines, which will run throughout the Northeast Corridor. While the impressive new train and the busy hub location seemed to lend legitimacy to the Vice President’s speech, in reality Biden is overlooking the boondoggle that federally-funded passenger rail has been for American taxpayers.

Amtrak President Joseph Boardman’s claim that the new equipment will save $300 million over the next twenty years does little to solve the systemic waste and inefficiency. The seventy new engines that the Vice President touted in Philadelphia were part of a $593 million loan from the Federal Railroad Administration. Amtrak has been one of the most egregious examples of wasteful government spending, largely a result of the lack of profit motive.

It has received some $40 billion in federal subsidies since its inception, and never turned a profit – and yet the federal government continues to pour taxpayer dollars into its operation. The service entered 2013 $1.4 billion in debt, and requested $2.6 billion in federal funding for fiscal year 2014. It has lost $834 million dollars on food sales alone in the past decade.  Amtrak’s continued dependence on taxpayer handouts make it incredibly wasteful and inefficient, and Vice President Biden’s call for further subsidies will only exacerbate this problem.

If the market truly demanded passenger rail, the private sector would be willing to provide it without billions in federal funding.

Biden’s speech in Philadelphia is far from the administration’s first foray into encouraging rail investment. However, it seems they have not learned from history, as Amtrak makes up less than one-half of one percent of interstate passenger travel.

The picture is equally bleak in the daily commuter market.  Recent Census data reveals that more Americans walk to work each day than take the train. Essentially, it would make more sense for lawmakers to subsidize comfortable shoes and wider sidewalks than to continue propping up rail service.

The Northeast corridor is profitable, and would likely be even more efficient if it were privatized. However, elsewhere in the country, there is even less reason taxpayers should be subsidizing the losing venture that is passenger rail.

Vice President Biden told the crowd that rebuilding railroads is crucial for “global competitiveness,” but the Obama administration has proven that government spending is not the way to economic prosperity. Five years after President Obama’s stimulus and promise of “shovel-ready jobs,” the nation mires in slow growth and a dreadfully low labor force participation rate.  If the administration were serious about making the country globally competitive, they would end excessive government spending and take proven action such as cutting America’s corporate tax rate, the highest in the world among developed nations.

The Vice President is misguided in his call for more investment in passenger rail. In order to improve efficiency and competitiveness, Amtrak needs less federal funding, not more.

Many of America’s roads and bridges are in dire need of repair, yet the federal government continues to spend transportation-related dollars on ventures that have little effect on improving transportation efficiency. With Amtrak up for reauthorization later this year, Congress should think long and hard before dumping more tax dollars into this gravy train.