Romney wants to fully privatize company
By Josh Lederman
Associated Press
WASHINGTON (AP) — Warning to Amtrak from Mitt Romney and Republicans: You’re on your own.
The platform Republicans adopted at their convention included a call for full privatization and an end to subsidies for the nation’s passenger rail operator, which gobbled up almost $1.5 billion in federal funds last year.
“It is long past time for the federal government to get out of the way and allow private ventures to provide passenger service,” the platform said, arguing that taxpayers dole out almost $50 for every Amtrak ticket.
Long a political cudgel in the halls of Congress, Amtrak is among a number of transportation functions Republicans say should be turned over to the private sector — including airport security, also on the chopping block in the GOP platform. At its core, the debate juxtaposes differing visions about what role government should play in ensuring public access to services — even if they’re losing money hand over fist.
For President Barack Obama, Amtrak symbolizes a communal investment in the American infrastructure that enables and catalyzes economic growth. For Romney, who built a career mending the balance sheets of unprofitable companies, dropping Amtrak fits neatly into his message of doing away with spending that government can’t afford.
On Monday, Amtrak announced it had set monthly ridership records in each of the past 11 months, with expectations of a 12th in September.
Even with a record 30 million passengers boarding its trains last year, Amtrak operated at a net loss of more than $450 million. The government pitched in $562 million to keep Amtrak in the black. And that’s just on the operations side, where Amtrak says it covers about 85 percent of its own costs through ticket fares and fees. When it comes to capital costs, like keeping train tracks up, the government foots almost the entire bill, costing taxpayers about $650 million in 2011.
Leading the Republican charge that the U.S. can’t bear the continued hemorrhaging is Rep. John Mica, R-Fla., who chairs the House Transportation Committee. Mica says he’ll hold a hearing a month on Amtrak.
While recognizing the need for a central entity to coordinate routes nationwide, Mica said the government has no place handling Amtrak’s day-to-day operations. But he acknowledged that some less profitable routes can’t get by without some subsidies.
“I’m for the privatization, and if we can end them, we can,” Mica told The Associated Press.
Despite chiding from tea party activists and libertarians, Amtrak enjoys broad support from most Democrats, making it unlikely its federal subsidies will disappear any time soon.
Democrats didn’t mention Amtrak in their platform, but spoke generally about rail’s importance and the need for increased investments in U.S. infrastructure. With more people than ever riding trains, government should be expanding intercity travel, not dismantling it, said Rep. Nick Rahall, D-W.Va., the top Democrat on Mica’s committee.
Proponents of continued subsidies say opponents are missing the point: It’s in the public interest to keep tens of millions of cars off already congested highways and from polluting the environment.
Inevitably, comparisons to Europe and Asia emerge, with skeptics questioning why for-profit rail travel can succeed overseas. But while other nations have privatized some routes, few operate systems that are free of subsidies. Japan and England repeatedly have had to bail out train systems in dire straits.
A recent report to Congress from Amtrak’s inspector general said the company was making progress on many fronts. One suggestion investigators said Amtrak had failed to take up: adding more special trains to help reduce its reliance on federal subsidies.
