Kill Amtrak Now!

Derailed: What Went Wrong and What to Do About America's Passenger Trains, by Joseph Vranich, New York: St. Martin's Press, 272 pages, $24.95

If the pope one morning announced that he had become a Buddhist, it would be big news. Similarly, for a longtime passenger-rail insider to denounce Amtrak as a failure and argue for its liquidation is big news. One hopes, therefore, that Joe Vranich's new book will have a major impact on Amtrak's future.

If ever there were a perfect candidate to pronounce Amtrak a flop, it would be Vranich. Consider his bona fides: former Amtrak public affairs officer, former executive director of the National Association of Railroad Passengers, and later president of the High Speed Rail Association. Vranich has been there, lobbying Congress, building coalitions, reading the GAO reports, giving speech after speech about passenger rail.

Yet Vranich, a self-described "moderately liberal Democrat, the very kind of person who has been Amtrak's strongest defender," is also an honest man. His experiences advocating new kinds of high-tech, high-speed rail brought him face to face with the reality of Amtrak's bureaucratic, status quo corporate culture, its propensity to play games with cost and performance numbers, and its thoroughly politicized nature. And that caused him to look with more objective eyes not just at Amtrak's increasingly obvious failure but also at the exciting developments happening overseas as more and more rail systems are deregulated and privatized. The result is this book.

Vranich first substantiates his case that Amtrak has failed to produce a meaningful return on the $20 billion (!) in taxpayers' money it has absorbed since its creation in 1971. His catalog of horrors includes Amtrak's dismally low speeds; after $20 billion in "investment," shouldn't riders expect trip times faster than those of the Third World today or the United States in 1952? And how many passengers know that the FDA some years ago imposed a permanent injunction on Amtrak after repeated food safety problems involving Amtrak diners --a penalty never once levied on any airline? Did you know that, just as large fractions of public school teachers send their own kids to private schools, most Amtrak employees go by plane when they go on vacation--even though they get free rail passes?

More important than these colorful facts is Vranich's assembly of solid public policy findings and conclusions. He correctly cites the Congressional Budget Office analysis finding that the Amtrak subsidy per passenger mile is more than 100 times that of other modes of intercity travel--contrary to what pro-Amtrak propaganda typically claims. He reveals that short-distance routes in the Northeast Corridor and California account for half of all Amtrak ridership--with the rest spread out over a politically determined spaghetti plate of hopelessly money-losing long-distance routes. And he understands that monopoly and extensive subsidies are at the root of Amtrak's poor performance.

What's most refreshing about this book, though, is that unlike most calls for Amtrak reform, it doesn't shrink from the logical conclusion of its findings: liquidation. Vranich flat-out recommends that Amtrak be shut down and its assets sold off to satisfy its creditors, ending the 26-year gravy train from federal taxpayers.

As one who believes rail can play some meaningful roles in carrying passengers--and also as a political realist who knows that you can't replace "something" with "nothing"--Vranich then offers a fairly realistic proposal for post-Amtrak passenger service. His plan draws partly on the dramatic rail deregulation and privatization which has been carried out in countries ranging from Britain, Japan, and New Zealand to Argentina, China, and Mexico over the past five years. Except in special cases like New Zealand, these reforms generally don't involve "attempting to privatize entire rail passenger systems, which are costly dinosaurs with no appeal to private investors. Instead, they are electing to abandon long-distance routes and privatize other routes"--generally, by contracting with the private firm that requires the least subsidy.

Vranich's post-Amtrak plan would devolve all responsibility for rail service from the federal government to the private sector, states, and local governments. The Northeast Corridor--the only significant track and right of way Amtrak owns--would be sold or given to the states. To make post-Amtrak train service more viable, the plan would include major deregulation: New passenger rail providers would be exempt from the chains that have bound Amtrak, including the Railway Labor Act (which, among other costly mandates, requires up to six years of severance pay for laid-off workers), the Federal Employers' Liability Act, the Railroad Retirement Act, and the Railroad Unemployment Insurance Act. The rationale? Competing passenger modes--bus and airline--aren't subject to those costly regulations.

I have only two quarrels with this otherwise splendid book. First, based on my research and reading, I am not nearly as optimistic as Vranich about the potential commercial viability of post-Amtrak high-speed rail service. His discussions of the now-abandoned Texas TGV project and the Florida Overland Express (FOX) project now under development accept the promoters' far too optimistic assumptions regarding ridership and costs. A recent analysis of FOX by transportation consultant Wendell Cox points out that, now that Southwest Airlines is providing considerable service in Florida, air fares in the Miami-Tampa and Miami-Orlando markets are 15 percent below what FOX plans to charge, and FOX would deliver slower service for most travelers. More generally, Vranich ignores a recent Federal Railroad Association feasibility study that concluded that the average high-speed rail corridor could cover only 29 percent of its costs from commercial revenue.

Secondly, when it comes to putting together his otherwise excellent post-Amtrak plan, Vranich appears to defer to the conventional wisdom he's previously debunked, to the effect that since airlines and cars get federal subsidies, so should trains. Hence he proposes that post-Amtrak rail be eligible for subsidies via a new federal trust fund making passenger-rail block grants to the states. Yet much of the book has already shown how destructive subsidies have been for Amtrak.

Despite these flaws, this book is tremendously important as Amtrak fights for its continued existence this fall. A major battle will take place over several serious proposals to give Amtrak an entitlement to one-half cent of the federal gasoline tax. As Vranich readily agrees, giving Amtrak such life support would doom any real chance of killing off the terminal patient.

Should you care? After all, in a $1.7 trillion federal budget, what's a billion a year in Amtrak subsidies? Vranich answers that one by quoting journalist Robert Samuelson: "The symbolic importance of ending these unjustified programs overshadows their size. If they enjoy immortality, then the political process is captive to past commitments, no matter how dubious." With Vranich's help, perhaps we can end this dubious commitment.