End of Amtrak chasing profitability?

[quad50cal]

According to House T&I Chairman DeFazio, he intends to strip Amtrak's for profit mandate in the Surface Transportation re-authorization that will supersede the current 2015 FAST act due to expire in 2020.


https://youtu.be/xsyjh_TtIWs

[Tadman]

This is interesting. As a republican, I support this as long as some guiding rules are in place to encourage responsible usage and growth. I don't think passenger trains need to be a partisan issue, especially if they help the economy and jobs. I see passenger trains (corridor and commuter) as a way to lure good employers to an area and also create better job access for those that can't afford a 1 hour drive every day.

[rcthompson04]

This is interesting. As a republican, I support this as long as some guiding rules are in place to encourage responsible usage and growth. I don't think passenger trains need to be a partisan issue, especially if they help the economy and jobs. I see passenger trains (corridor and commuter) as a way to lure good employers to an area and also create better job access for those that can't afford a 1 hour drive every day.

I agree. In terms of the amount we spend, rail is a bargain. We have a lot more wasteful things in the transportation spending world (rural highway spending being probably the worst).

Does removing the profit requirement, which has never been met, really change how Anderson runs Amtrak? There is a strong case that Anderson's moves make sense even if profit is not a consideration at all.

[SouthernRailway]

According to House T&I Chairman DeFazio, he intends to strip Amtrak's for profit mandate in the Surface Transportation re-authorization that will supersede the current 2015 FAST act due to expire in 2020.


https://youtu.be/xsyjh_TtIWs

As a Libertarian, I don't support this. Why shouldn't Amtrak try to be profitable? This signals to me that not using every dollar efficiently isn't important, which will lead to waste.

[Arborwayfan]

Highways aren't profitable. The army isn't profitable. The courts aren't profitable. ICE isn't profitable. Schools aren't profitable. That doesn't necessarily mean that Amtrak shouldn't make money if it can, or break even if it can. It's just pointing out that we spend a lot on public services that even a libertarian probably thinks don't need to be profitable. Maybe you don't seem passenger trains that way, but public services paid for with taxes are not necessarily wastes of money. They can also be ways of doing collective tasks that we think are important but which don't make money.

[FatNoah]

This signals to me that not using every dollar efficiently isn't important, which will lead to waste.

I think this all depends on what "efficiently" means. Does it mean maximizing ridership and/or revenue, diverting passengers from other modes (possibly for certain distances), minimizing the required subsidy, etc.? The actions required to support one of those goals may not support the others. Amtrak's current reality is that it must try to meet possibly conflicting mandates: the legal mandate of profitability and the political reality of needing to provide a benefit to as many constituencies as possible.

I fully agree that dollars should be used efficiently and we should get the most bang for the buck, but we can't do that until we decide what the ultimate goal is.

[mcgrath618]

Highways aren't profitable. The army isn't profitable. The courts aren't profitable. ICE isn't profitable. Schools aren't profitable. That doesn't necessarily mean that Amtrak shouldn't make money if it can, or break even if it can. It's just pointing out that we spend a lot on public services that even a libertarian probably thinks don't need to be profitable. Maybe you don't seem passenger trains that way, but public services paid for with taxes are not necessarily wastes of money. They can also be ways of doing collective tasks that we think are important but which don't make money.

Ding ding ding.

I am very excited at this new development. While I agree with others that the Sunset Limited needs to be cut or entirely overhauled, Long Distance Trains should be considered a public service and should be funded as such.

[JoeG]

Looks like this is an initiative of the House Dems. I hope it survives in the final bill. As I have said many times, trying to make Amtrak profitable is only a distraction from its real problems. We need Amtrak to function as an important, useful and dependable source of transportation. It does not need to make a profit but it must be useful and worth its costs. Trains that only serve WOOFs and foamers aren't what is needed. We also shouldn't go the Canadian route, where LD trains are very luxurious, super expensive...and even more behind schedule than Amtrak. Probably Amtrak needs to be able to spend some money to make deals with the Class Is to allow Amtrak trains the priority to run on time. Along with this Amtrak needs to have some extra equipment and crews so a routine breakdown doesn't cause a many-hour delay or cancellation.

We don't necessarily need a network of high speed lines like Japan and France have. We do need a network of lines that have multiple daily departures and that can come close to matching highway end-to-end speeds. At this point, although I personally enjoy overnight train trips with white-tablecloth diners, I suspect that they have outlived their usefulness.

[rcthompson04]

Looks like this is an initiative of the House Dems. I hope it survives in the final bill. As I have said many times, trying to make Amtrak profitable is only a distraction from its real problems. We need Amtrak to function as an important, useful and dependable source of transportation. It does not need to make a profit but it must be useful and worth its costs. Trains that only serve WOOFs and foamers aren't what is needed. We also shouldn't go the Canadian route, where LD trains are very luxurious, super expensive...and even more behind schedule than Amtrak. Probably Amtrak needs to be able to spend some money to make deals with the Class Is to allow Amtrak trains the priority to run on time. Along with this Amtrak needs to have some extra equipment and crews so a routine breakdown doesn't cause a many-hour delay or cancellation.

We don't necessarily need a network of high speed lines like Japan and France have. We do need a network of lines that have multiple daily departures and that can come close to matching highway end-to-end speeds. At this point, although I personally enjoy overnight train trips with white-tablecloth diners, I suspect that they have outlived their usefulness.

Aren’t the Canadian trains even less profitable even their Corridor service?

[JoeG]

If anyone knows about the profitability or otherwise of Canadian trains I hope they will post. I have no idea. I would hope their very expensive luxury land cruises make money but I have no facts.

[SouthernRailway]

The US Federal government runs $1 trillion deficits annually and has over $22 trillion of debt.

And we’re loosening the reins on government agencies, to permit them to be less efficient with the funds that they have?

Really?

[JoeG]

Amtrak's deficit isn't even a rounding error in the Federal budget. I could certainly question the need for massive farm subsidies provided mostly to giant factory farms. I could wonder if we need all of a military budget that is almost equal to the rest of the world's combined. I could wonder about the wisdom of growing corn to produce ethanol to reduce the efficiency of cars.

Etc.

If we believe the government should be run more efficiently it might be good to concentrate on the biggest causes of the deficit. Perhaps looking at our tax structure would also be useful. Of all the kinds of property people have, why do we only tax their houses?

[eolesen]

Amtrak's deficit isn't even a rounding error in the Federal budget.

And no single raindrop is responsible for the flood, either.

Changing the accountability provisions for Amtrak won't be a huge priority for either party or either house in 2020, so don't hold your breath.

[SouthernRailway]

Amtrak's deficit isn't even a rounding error in the Federal budget. I could certainly question the need for massive farm subsidies provided mostly to giant factory farms. I could wonder if we need all of a military budget that is almost equal to the rest of the world's combined. I could wonder about the wisdom of growing corn to produce ethanol to reduce the efficiency of cars.

Etc.

If we believe the government should be run more efficiently it might be good to concentrate on the biggest causes of the deficit. Perhaps looking at our tax structure would also be useful. Of all the kinds of property people have, why do we only tax their houses?

Yes, the largest contributors to the debt and deficit problems are entitlements, but that doesn’t mean that smaller programs should be allowed to be inefficient.

[Gilbert B Norman]

Tablecloths, fresh flowers, metal flatware, glassware, comp wine, food quality at, say, Seasons 52 level.....

"Amenity kits", comp snacks, beverages (alcohol from the Attendant) in the Sleepers throughout the trip....

A 600 car order for Superliner III's; 300 additional V-II's, including "Pacific Parlor" Lounges.

Restoration of the LD's lost with the Carter, Clinton, and Bush cut's. Service restored to the Overland and the NP routes.

I doubt if any language within an Authorization Bill means any of the above nonsense could move forth. Travel in nature and scope has simply changed over the past sixty years. H.G. Wells' "Time Machine" would have more takers than the above.

Now a positive from removal of the "for profit" language is that "as the stuff that counts", such as infrastructure from appropriations and new short distance equipment is obtained in the private capital markets, comes to pass, the cost of all will be converted to expense by Depreciation (simply because Cash Flow measurements such as EBIDTA ignore such does not mean it's an Expense of the business enterprise). This could result in the return of significant Operating Deficits, that hopefully will be obviated as ridership in markets that count increases.

In short, I welcome the proposed language change, but not for the reasons that the various advocacy groups likely have in mind.