The debate over Amtrak subsidies and the Department of Transportation's proposed route reductions is only the latest illustration of an often-repeated phenomenon in the four-year history of the congressional budget process. Everyone favors cuts in wasteful federal spending - until specific programs come under fire.
A dispassionate analysis of the Amtrak restructuring proposal cannot fail to support the secretary of transportation's conclusion: "We can no longer afford to provide a disproportionately large and continually increasing amount of federal funds for operating subsidies for a passenger transportation system that is used by less than one-half of one percent of the intercity traveling public."
The DOT plan to eliminate some of Amtrak's unprofitable routes is a sound one. It was requested by Congress in 1978 after years of frustrating attempts to improve Amtrak's operations and control the level of federal subsidy. Without sound criteria for choosing the routes to be operated, congressional efforts to balance the federal budget will be seriously impaired.
Unable to live within its annual funding levels, Amtrak has consistently required supplemental funding. Operating subsidies were originally authorized at $40 million in FY 1971. For FY 1979, about $600 million will be required. Adding federal capital assistance, total federal subsidies for the year will approximate $800 million including the supplemental appropriation just agreed to. Continued support at ever increasing levels simply cannot be justified.
One fact has been blurred in the debate over the route reductions. They would not result in reduced federal support for Amtrak. At best, the FY 1980 subsidy would be held roughly at the FY 1979 level. However, if the DOT plan is not implemented, operating subsidies will grow by about $200 million in FY 1980, and by $1.4 billion to $1.7 billion over the next five years.
Under the plan, Amtrak's least economic, least popular routes would be eliminated. Where rail service can be a reasonable and appropriate transportation alternative, routes would be preserved and service would be improved. Thurs, scarce federal resources would be focused on viable routes, rather than being wasted on those the secretary of transportation describes as "hopeless."
Amtrak's revenue contribution to operating costs has been falling since 1973. On the average, Amtrak now collects about $1 of revenue for each $3 of operating expenses incurred.
That average is the good news. The least economic routes, which the DOT plan would eliminate, show ratios as low as $1 to $5.
The Amtrak legislation reported by the Senate Commerce Committee is designed to improve the ratio of revenue to operating expenses. Assuming that the major elements of the DOT plan will be implemented, the bill sets a goal improving the ratio to the level of $1 to $2.
It is also relevant to consider Amtrak's overall cost levels. In FY 1978, the average cost of Amtrak service was 25.5 cents per passenger mile. That represented a loss of 16.5 cents per passenger mile.In other words, the taxpayer subsidized Amtrak service to the tune of 16.5 cents for each mile traveled by each passenger.
Again, that is a systemwide average. The least economic routes currently require subsidies of up to 40 cents per passenger mile.
Perhaps worst of all, the lightly used, high-cost routes waste energy as well. It is a popular myth that Amtrak is an energy saver. A recent study by the Congressional Budget Office shows that passenger trains outside the Northeast Corridor actually waste energy, and are less energy-efficient than the average automobile.
In most cases, substantial improvements in ridership would not help. Establishment of firm criteria regarding ridership is the only approach that can turn Amtrak into an energy saver.
Alternative intercity transportation is cheaper and more efficient. In 1978, the airlines made a handsome profit while charging fares that averaged 8.5 cents per passenger mile. Intercity bus lines make money by charging about 6 cents per passenger mile (and do so despite heavily subsidized competition from Amtrak).
These competing carriers receive an average of less than one-tenth of a cent per passenger mile by way of federal subsidy.
But the willingness of the bus lines to compete with heavily subsidized trains is steadily evaporating. Continued extravagant support for Amtrak may well encourage the bus lines to demand similar subsidies. The effects on the federal budget could be enormous.
The Congress has just approved budget targets that assume restraint in the Amtrak deficit. We must stay within those targets if we hope to balance the budget, promote energy conservation, and establish a more rational national system of intercity transportation. If the Congress accepts the DOT approach, these important interests will be advanced.