RAILWAY AGE COMMENTARY: Mica/Shuster bill: Reagan-Gingrich-Bush rehash?

By William C. Vantuono, Editor

It seems as though every few years, somebody in the White House or Congress tries to kill or dismantle Amtrak. In the 1980s it was Ronald Reagan and White House Budget Director David Stockman. In the 1990s it was the Newt Gingrich-led Republican Revolution, which prompted Amtrak itself (under the leadership of the late, beleaguered George Warrington) to attempt a “Glide Path to Self Sufficiency.” In the past decade, it was George W. Bush and Transportation Secretary Norman Mineta pushing an ill-conceived privatization plan. In each case, the attempted destruct sequence fizzled out.

On June 15, we were introduced to the latest “Let’s Pull Amtrak Apart, Pulverize All the Pieces In a Blender, Dump It Out, and Get People Who Have No Idea What They’re Doing or Talking About Attempt to Mold Something Back Together” bill. This is the “Competition for Intercity Passenger Rail in America Act,” concocted by Rep. John L. Mica (R-Fla.), Chairman of the House Transportation and Infrastructure Committee, and Rep. Bill Shuster (R-Pa.), Chairman of the Railroads, Pipelines, and Hazardous Materials Subcommittee. This bill, according to the second-coming-of-Christ press release heralding its introduction, is “a dramatic new direction that focuses on bringing competition to high-speed and intercity passenger rail service across the country [that] incorporates competitive bidding and private sector involvement to bring high-speed rail to the Northeast Corridor and improve intercity passenger rail service nationwide.”

Wow. I’m impressed.

Not.

What’s the point of all this private-sector mumbo-jumbo? This complex, 44-page bill that Congressional staffers are being paid with your and my tax dollars to spend countless hours writing? This piece of proposed legislation that will most likely be tossed in the circular file and forgotten until, a few years from now, somebody resurrects, swallows, and regurgitates in another form? Well, there really isn’t any point.

Why dismantle Amtrak? Why create something extremely complex out of something that, though certainly not ideal, is straightforward and has worked pretty well for 40 years? Something that was created for basically one purpose—to relieve our freight railroads from their obligation to operate important yet unprofitable passenger services? Why are some folks hell-bent on pushing this stuff? “Because they can,” says our Managing Editor, Doug Bowen. “That’s not very profound, but it’s a big part of it.”

Oh man, have the cowpies—excuse me, political rhetoric—hit the fan! Some of the language is comical. Some of it is a confusing cacophony. Some of it is shrill. Most of it is useless, because if history is any indication, such legislative schemes are not going to do anything except misinform and confuse the public, needlessly worry Amtrak’s hard-working employees and distract them from doing their jobs, and force Amtrak’s management to spend countless hours defending the railroad, instead of running it. It’s like swatting at mosquitoes. You know they’re there and you know they can’t kill you, but nevertheless you’ve got to keeping expending energy that could be used doing other, more useful things than swatting at them because a) they’re an annoyance and b) they’re never really going to go away.

You want rhetoric? Here it is, folks (with my observations, in parentheses, added):

From Mica: “After 40 years of costly and wasteful Soviet-style operations (he’s been using this description for years) under Amtrak, this proposal encourages private sector competition, investment, and operations in U.S. passenger rail service. Competition in high-speed and intercity passenger rail will cut taxpayer subsidies (no, it won’t), improve service (maybe), and bring our nation into the 21st century of passenger rail transportation. Our plan will create jobs (don’t they all?) by finally bringing real high-speed rail (define that, please) to the one region of the country where it makes the most sense—the Northeast Corridor (you mean it won’t work anywhere else—even in your home state of Florida, where you were royally ticked off at your fellow Republican, Gov. Rick Scott, who deep-sixed a viable HSR project so the USDOT could give the money to the Soviets?)—and do so in a dramatically shorter time than Amtrak’s 30-year plan, at a fraction of their (grammatical error, should be “its”) proposed $117 billion cost (I don’t think so). Amtrak has repeatedly bungled development and operations in the Northeast Corridor (excuse me, but isn’t Amtrak’s market share between New York and Washington close to 70%, and between New York and Boston close to 50%?), and their (“its”) new long-term, expensive plan to try to improve the corridor is simply unacceptable (didn’t you ask them for a plan?). The nation cannot afford to continue throwing money away on this highly subsidized, ineffective disaster (see market-share observation).

“It is time for a new direction (which way? Sideways?). Around the world, other nations and the private sector have successfully competed to develop high-speed and passenger rail service (not without a steady, reliable stream of hundreds of billions in government funding). There is no reason we cannot do the same in our most densely populated and congested region (see previous observation). By giving the private sector the opportunity (not without huge government investment first) to bring its resources and expertise to the table, we can lower costs, increase efficiency, and improve high-speed and intercity passenger rail service across the country.”

“The Mica/Shuster proposal will also give states greater control and authority over their intercity passenger rail services (did you ask them if they want it?) currently operated by Amtrak. Ridership on state-supported routes has increased significantly over the last 15 years (didn’t you just say they’re “operated by Amtrak?”), and incentivizing (is that a word? I’d better look it up) private sector competition for rail services on these routes will ensure [that] states and taxpayers get the best possible deal (guess they’ll have to pay more) and the best possible service (please elaborate on what and how). The initiative will also open up other Amtrak long-distance money-losing (this implies they should be profitable—wrong!) routes to competition (did you ask the freight railroads if they want this? They really don’t), allowing the private sector the opportunity to bid on any intercity route and potentially improve service.

From Shuster: “It is time to deregulate America’s passenger rail system, and give intercity passenger rail the same opportunity for success that the freight rail and commercial truck industry have benefited from (there is little or no basis for comparison here—apples vs. oranges). We must look for more effective and innovative approaches to providing modern and efficient passenger rail service by focusing on projects that make sense, leveraging private sector investment, increasing competition, and opening the door to public-private partnerships (wouldn’t it be easier and simpler to provide Amtrak with a regular, stable source of capital, like an extra penny on the federal gas tax? Oh, I’m SO sorry I suggested the dreaded T Word!).

“Both around the world and right here in the United States we have seen that competition works. When Virgin Rail began operating the West Coast Line in Britain, the company doubled the corridor’s ridership in six years and turned a profit (after massive government investment in the right-of-way, but Richard Branson will love you anyway). Here at home, in an open bid process, Veolia won over Amtrak for Florida’s Tri-Rail South commuter line at $97 million to Amtrak’s $162 million (that’s an oversimplification). Success and cost savings like this can happen here if we end the Amtrak monopoly on intercity passenger rail and open it to competition (again, did you ask the freight railroads about this?). (Drumroll, maestro!) Done right, what in the past has been a liability can become an asset, generating jobs, economic development, and value for hardworking taxpayers (trumpet fanfare, please!).”

So, what exactly are our good Congressmen proposing?

First is “Northeast Corridor Competition.” “Unfortunately, Amtrak’s Acela currently averages only 83 mph between Washington and New York, and just 65 mph between New York and Boston (that’s mainly because the trains make stops at major cities, and most passengers don’t ride the entire route, but in any case, the issue is not speed, it’s trip time).The Mica/Shuster initiative will end the Amtrak monopoly (actually, most NEC trains are commuter trains operated by transit agencies). It separates the NEC from Amtrak, spinning it off as a separate business unit (this has been tried before); transfers the title for the NEC to USDOT, including all assets, property, and trains; USDOT enters into 99-year lease with a Northeast Corridor Executive Committee; Executive Committee manages NEC infrastructure and operations (this all sounds way too complicated).

Next, we “bring private sector expertise and financing to the table.” The legislation “requires a competitive bidding process for development of high-speed rail on the NEC; allows private sector to recommend best PPP framework; and establishes performance standards for competitive bidding process.” The end result? “Real high-speed rail on NEC—less than 2 hours between WDC and NYC (nice objective); double total intercity rail traffic on NEC (you’ll need to double the amount of main line tracks to do that, and where are you going to put them?)’; highest level of private sector participation and financing (not without big government dollars); lowest level of federal funding (sorry fellas, but someone is smoking something); full implementation in 10 years or less (you want it when?).

Of course, the legislation does “protect the public interest. The five -member NEC Executive Committee represents federal and state interests, and all current commuter and freight operations on NEC are protected (how reassuring!).” But the really cool thing is we’ll have “NEC high-speed rail in one-third of the time as Amtrak’s proposal, with firm deadlines (care to wager on that claim?). Within 20 months of enactment (why 20?), the NEC will transition from Amtrak monopoly (enough already!) to a PPP.” Now, of course we’re going to “create and protect jobs—new jobs for rail construction and operations, and new jobs associated with development around rail stations.” But let’s not forget all the experienced Amtrak workers who will get pink slips. Not to worry, folks, because there will be “a hiring preference to any displaced Amtrak employees (the unions will have a field day with that one!)”

Moving on to the state-supported intercity trains: “Most state-supported routes run on track owned by freight railroads. The Mica/Shuster proposal encourages private companies to compete on these state-supported intercity routes (again, did you check with the owners? They’re not obligated to do anything. It is their track, after all!). The Mica/Shuster initiative promotes competition by encouraging states to initiate a competitive procurement process for a menu of services (translation: indigestion for freight railroads); incentivizes (indeed it is a word. I looked it up!) competition by redirecting funds from Amtrak to state DOTs (don’t they pay for these trains to begin with?); establishes an expert panel for recommending competitive best practices (oh brother!); allows states to keep money saved through competitive bid process (what would they otherwise do? Give it to someone else?); saves federal taxpayer dollars by requiring a new allocation process in 2020 to reflect cost savings achieved through competition (don’t worry, someone will find another use for it); and protects freight railroad interests [because it] involves host freight railroads through market-driven access negotiations (please clarify, but in any case, you ain’t got a choice, because it ain’t your damn track!).”

Let’s not forget the long distance trains: “This initiative will finally allow for competition to Amtrak’s least successful lines (by whose measure? Yours?) in an effort to reduce federal subsidies (finally, a little honesty!) and improve service. Amtrak’s long-distance routes are subsidized at an incredible $117.84 per passenger on average (well, at least that’s less than what the Defense Department pays for a screwdriver. Isn’t that around $600?). Amtrak’s failing long-distance routes (failing? Try to book a sleeper a week in advance on some trains) need to be opened to competition (freight railroads, are you listening?) to reduce the burden on taxpayers (let’s see, $117.84 divided by 300 million Americans means I’m paying . . . well, my calculator can’t even display a number that small) and improve service for the traveling public (how?). The Mica/Shuster initiative promotes competition by allowing private sector operators to compete with Amtrak to operate long-distance routes (freight railroads, pay attention!); requires winning bids to be selected based upon the lowest possible level of federal support (translation: Uncle Sam doesn’t want to pay one penny); allows private sector operators to make a profit, incentivizing improved service and ridership growth (this won’t happen unless fares are raised to ridiculous levels, in which case the trains will become affordable only to wealthy railfans); mandates that operating subsidies for contracted long-distance services be lower than Amtrak subsidies (who’s gonna bid under those conditions? Not I!); and involves host freight railroads through market-driven access negotiations (see previous paragraph).”

Of course, Amtrak now has to go into pest-control mode. President and CEO Joe Boardman issued the following statement:

“Any plan for transforming the NEC must make transportation the centerpiece of the effort. The NEC is not just a piece of real estate—it is a major transportation artery and a vital component of the regional economy carrying more than 250,000 intercity and commuter passengers every day. The Mica/Shuster proposal takes Amtrak apart only to put something in its place that looks quite similar. I hope to have a serious and constructive discussion about how rail operations in the Northeast should be managed (don’t get your hopes up, Joe. We’re not dealing with railroaders), but it appears this bill will be rushed through committee next week.

“We should have our eyes open to the possibility of innovations that can improve the NEC and Amtrak provides the region the best opportunity to achieve the needed improvements. The NEC is a success under Amtrak stewardship (I agree) and many components of our next-generation high-speed rail vision plan are already moving forward. We’re going to have to take a careful look at the proposal because we don’t want to run the risk of adopting something that won’t work (it won’t, take my word for it), that compromises safety (that’s exactly what happened in Britain), or that simply costs more than we can afford (you mean, ‘{what the federal government feels like paying for,” right?). We have a basic duty to the public to ensure that we’re looking after its interests, and the last thing the Northeast needs is a plan that’s poorly thought through (like this one) and that doesn’t take key issues (please expand on this) into account.”

Well put, Joe Boardman.

So now, let the games begin! The rhetoric from the other side of the aisle is pretty lively, like this fiery comeback from Rep. Nick Rahall (D-W.Va.), Ranking Member on Mica’s T&I Committee:

“Republicans on the T&I Committee unveiled a controversial partisan proposal to privatize Amtrak that will destroy American jobs, imperil passenger rail service nationwide, and increase costs for the federal government, states, commuter rail agencies, freight railroads, small businesses, and American taxpayers. Taking a play out of President Bush’s book, Republicans are dusting off a chronically unpopular proposal that will cripple Main Street by auctioning off Amtrak’s assets to Wall Street (yes, those evil people that sent the American economy into the toilet!). Instead of abolishing Amtrak, Republicans should abandon this ill-conceived ideological assault on passenger rail service—just as we did when President Bush first proposed it—and work with Democrats to build true high-speed and intercity passenger rail in America.”

Now them’s fightin’ words!

But wait, even some of Amtrak’s friends have their facts scrambled. Rahall went on to say, “With record ridership today, Amtrak currently turns a profit in the Northeast Corridor (that’s only taking “above the rail” costs into account. Factor in fully allocated costs and every train loses money, not that it really matters). Because of its national scope, Amtrak is able to invest this profit (profit?) to offset less profitable long distance lines (less profitable? Am I missing something here?).

““This plan is a death knell for passenger rail service from coast to coast. Privatizing this profitable (there’s the P Word again) corridor will not merely affect train service in that region; it will have a devastating domino effect from coast to coast, leaving trains stuck at the station across the nation (nice rhyme!). The Auto Train, Capitol Limited, California Zephyr, Cardinal, Coast Starlight, Empire Builder, Palmetto and Silver Service, Texas Eagle, and so many other vital lifelines will no longer serve as engines of economic growth but will be mere relics of a bygone era (nice juxtaposition of two overused clichés).”

Two years ago, the USDOT invited proposals from private companies to develop high-speed rail service in America. Despite not one single proposal being submitted by the private sector for developing high-speed rail in the Northeast Corridor, Republicans are plowing full steam ahead to abolish Amtrak, hand over the conductor’s cap to the USDOT, and auction off Amtrak’s assets to the highest bidder on Wall Street (and we all know Wall Street is just so evil!).

“At a time when Washington should be reining in spending, Republicans are peddling a partisan plan (nice alliteration, Noble Nick!) that puts the American taxpayer on the hook while they desperately seek fantasy funding from an invisible investor (more alliteration. He’s on a roll now! My hat’s off to whoever wrote this). In order to create jobs and remain competitive in the global economy, we ought to be looking at ways to help Amtrak achieve the goal of high-speed rail; not looking at ways to dismantle it. We should be united in cheering on its success; not trying to kick it in the caboose (sorry, cabooses went away many years ago) by selling off its assets to private companies.”

I’ll conclude this piece with a lively statement from Rep. Corrine Brown (D-Fla.), Democratic Ranking Member of the Subcommittee on Railroads: “While (my fellow Floridian) Congressman Mica refuses to focus on critical infrastructure issues, he is bent on destroying Amtrak. We have no surface reauthorization bill and next week will be forced to delay the Federal Aviation Administration bill for the 20th time At the very time that we should be working together to solve the problems plaguing this nation’s transportation infrastructure, Chairman Mica is introducing divisive legislation that is dead on arrival in the Senate.”

She’s probably spot-on with the DOA.