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ICYMI: "Privatizing Amtrak"
Overview
History
Money-Losing Routes
Poor Service Quality
Costly Workforce
Privatization
Overview
The National Railroad Passenger Corporation, or Amtrak, is the federal organization that operates passenger rail service in the United States. It was created by the Rail Passenger Service Act of 1970. Amtrak is structured as a corporation, but its board members are appointed by the president of the United States and virtually all its stock is owned by the federal government.1 Amtrak has about 19,000 employees, and its annual revenues were $2.4 billion in 2009.2
Amtrak has been providing second-rate train service for almost four decades, while consuming almost $40 billion in federal subsidies. The system has never earned a profit and most of its routes lose money. Amtrak's on-time record is very poor, and the system as a whole only accounts for 0.1 percent of America's passenger travel.3 Another problem is that Amtrak's infrastructure is in bad shape. Most of the blame for Amtrak's woes should be pinned on Congress, which insists on supporting an extensive, nationwide system of passenger rail that doesn't make economic sense.
The solution is to privatize and deregulate passenger rail. Varying degrees of private involvement in passenger rail have been pursued abroad, such as in Australia, Britain, Germany, Japan, and New Zealand. Privatization would allow Amtrak greater flexibility in its finances, in capital investment, and in the operation of its services—free from costly meddling by Congress.
Read the full story: www.downsizinggovernment.org
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