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Bush to seek Amtrak subsidy cuts

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  • Bush to seek Amtrak subsidy cuts

    WASHINGTON - The Bush administration will for the first time propose eliminating operating subsidies for Amtrak as part of a push to cut budget deficits, people close to the budget process said yesterday.

    The President's fiscal 2006 budget, which he will send to Congress on Monday, will allocate no subsidy for the national passenger railroad to run its trains. But it will offer $360 million for maintenance on the flagship Northeast Corridor between Washington and Boston - which Amtrak owns - and for commuter services, the sources said.

    The proposal must be approved by Congress.

    Last year, the administration proposed $900 million in subsidies, but Congress increased that to $1.2 billion after Amtrak said the lower figure would force it to shut down.

    An Amtrak spokesman would not comment yesterday.

    Senior administration officials declined to discuss the budget figures but described the decision as part of Bush's broader push to restrain spending and eliminate what they see as wasteful programs.

    One senior official said: "Amtrak should be treated like any other form of transportation and funded like any other form of transportation. The other forms don't get operating subsidies."

    The administration has long hoped to wean Amtrak from federal subsidies, criticizing the condition of its infrastructure and service. It wants to open its rail lines up to competition.

    Amtrak employs 22,000 people and runs 265 trains a day, excluding commuter service, in 46 states. It has never made money in its 34-year history.

    To get its subsidy in recent years, Amtrak has had to agree to much closer Transportation Department oversight of its books and its operations.
    .

    This is the first thing that I have found that I can support GWB on. I'm totally behind him on this.

    I have used Amtrak for 3 years to commute to work. They have abysmal customer service, decrepit passenger cars, and poor track maintenance. They have not turned a profit in their entire 34-year existence. They cry for millions of dollars each year.

    Best thing to do is to open up the nation's rail lines to competition. Amtrak is a money pit. When my home state of PA voted to give Amtrak $70 million in subsidies, I complained loudly to my state reps. They laughed at the idea that competition would change things for the better, citing that previous attempts here and abroad have failed. I hope Bush can make this happen.

  • #2
    That's insane. How can you have railway compeition anyway?
    I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
    - Justice Brett Kavanaugh

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    • #3
      The British should know something about that
      Que l’Univers n’est qu’un défaut dans la pureté de Non-être.

      - Paul Valery

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      • #4
        Originally posted by Kidicious
        That's insane. How can you have railway compeition anyway?
        That's very simple. The tracks remain property of the State, and the State maintains or expands the infrastructure. Private train companies thus are only responsible of exploiting the rail network, not building it. Transport companies thus own trains, like road companies own busses.

        What's more difficult is to make a successful privatisation of railways. The Brits have utterly failed. The Germans have been truly stupid (they attempted to privatize the Deutsche Bahn, but in the attempt opf turining the public company in a profitable, sellable one, they lost so many customers because of the disaster in quality/proce, that Deutsche Bahn loses as much money as before, but now sucks). It seems the Swedes have some private rail transportation, and my little experience with Swedish trains is very good.

        Edit: For urban and commuting transportation, it is generally agreed that the city / State grants an exploitation licence to a company for some time (the company has the monopoly for some years). If the company satisfies the demands of the city / State, the licence is renewed. In Bordeaux, where I lived, the whole public transportation of the city is managed by Connex (which has such operations across all of Europe). Connex keeps low prices and experiences fewer strikes than if the management had been public, because of their harsh methods. They also recieve subsidies, so that the price for the consumer can still be low. Although the working conditions are worse than in public companies, Connex had helped to make Bordeaux' transportation considerably better in recent years.
        "I have been reading up on the universe and have come to the conclusion that the universe is a good thing." -- Dissident
        "I never had the need to have a boner." -- Dissident
        "I have never cut off my penis when I was upset over a girl." -- Dis

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        • #5
          swedish railways
          "Ceterum censeo Ben esse expellendum."

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          • #6
            Do you realize how much fixed costs there are in running a railroad, even if the state owns the tracks. Airlines is one thing, even though competition there is limited, but trains is another thing. I don't see how companies would get enough customers to cover their fixed costs.
            I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
            - Justice Brett Kavanaugh

            Comment


            • #7
              Originally posted by Kidicious
              Do you realize how much fixed costs there are in running a railroad, even if the state owns the tracks. Airlines is one thing, even though competition there is limited, but trains is another thing. I don't see how companies would get enough customers to cover their fixed costs.
              In principal its the same as the US highway system.
              "Just puttin on the foil" - Jeff Hanson

              “In a democracy, I realize you don’t need to talk to the top leader to know how the country feels. When I go to a dictatorship, I only have to talk to one person and that’s the dictator, because he speaks for all the people.” - Jimmy Carter

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              • #8
                Originally posted by Kidicious
                Do you realize how much fixed costs there are in running a railroad, even if the state owns the tracks. Airlines is one thing, even though competition there is limited, but trains is another thing. I don't see how companies would get enough customers to cover their fixed costs.
                I don't know precisely what the railways industry in the US looks like. Considering that most long-distance travel is made by flight (because the US is far less densely populated than Europe), and considering that Yanks have an irrational love for their cars, it's true that trains are probably mostly empty in most of the country. Very few areas of the US can expect to have enough people interested in riding a train. That's mostly New England, where the population density allows it (although a case could be made for California, if trains were fast and cheap).

                In those areas where you have many people, it's really not that hard to make a profit out of the transportation business. If you keep to profitable lines at profitable times, your fixed costs won't be huge (a few trains - that's definitely cheaper than a flotilla of planes), and the money will roll in if you're good enough in comparison to the competition.
                "I have been reading up on the universe and have come to the conclusion that the universe is a good thing." -- Dissident
                "I never had the need to have a boner." -- Dissident
                "I have never cut off my penis when I was upset over a girl." -- Dis

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                • #9
                  Originally posted by Ogie Oglethorpe


                  In principal its the same as the US highway system.
                  How many private bus lines are there? Two? Three? I would say really Greyhound has monopoly power don't they, although they compete with Amtrak, but in that sense Amtrak altready has competition.
                  I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
                  - Justice Brett Kavanaugh

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                  • #10
                    If they can be smart about it (owning the tracks, and having Amtrak subsidies ONLY for cross country trains), this can be a very good idea. The problem is that the Bush Administration, even when it has good ideas, isn't smart about implimenting them.
                    “I give you a new commandment, that you love one another. Just as I have loved you, you also should love one another. By this everyone will know that you are my disciples, if you have love for one another.”
                    - John 13:34-35 (NRSV)

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                    • #11
                      Spiffor,

                      Yes the trains here are mostly empty, despite the low (subsidized) price. That's why I like riding on the train, but I don't travel much.
                      I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
                      - Justice Brett Kavanaugh

                      Comment


                      • #12
                        Me thinks the airline industry has something to do with this.
                        I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
                        - Justice Brett Kavanaugh

                        Comment


                        • #13
                          I'd like to remind to the proponents of privatization, however, that a privatization is not always good news.

                          Private rail companies will have to be profitable. Which means they can't have artificially low prices for their fare. It will deprive many to use trains. In turn, these people will switch to cars and worsen transportation on highways, which is bad news for everybody (negative externalities). Besides, some people will not be able to afford transportation at all, because they cannot invest in a car. By destroying their mobility, privatization also bars employers in neighbouring cities for having access to an enlarged pool of workers.

                          Besides, a company can very well be profitable with high prices and low quality. British rail companies show it every day (and yes, they are open to competition).

                          A successful privatization requires that the State demands the exploiting companies to care of the qulity of service so that the positive externalities continue to be fulfilled... Or it implies that there is still a public exploiting company out there to take the slack in the many areas where private companies can't satisfy. Such a private company is bound to live almost exclusively off subsidies, considering that all profitable ventures will have been vampirised by private actors.
                          "I have been reading up on the universe and have come to the conclusion that the universe is a good thing." -- Dissident
                          "I never had the need to have a boner." -- Dissident
                          "I have never cut off my penis when I was upset over a girl." -- Dis

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                          • #14
                            Originally posted by Kidicious
                            Me thinks the airline industry has something to do with this.
                            Why? Because you want to see a conspiracy where none exists? Airlines are already beating the tar out of Amtrak and it is unlikely that those who travel cross country on the trains will switch over to planes. Usually the cost to fly is the same or less than the cost to take the train. Most likely, they'll go with buses. If they wanted to fly, they'd be doing it already.
                            “I give you a new commandment, that you love one another. Just as I have loved you, you also should love one another. By this everyone will know that you are my disciples, if you have love for one another.”
                            - John 13:34-35 (NRSV)

                            Comment


                            • #15
                              Who said anything about conspiracy? Anyone who knows anything about business knows that lobbying is a normal and necessary aspect of it. And businesses like to get as much money as they can. They don't leave any stone unturned.
                              I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
                              - Justice Brett Kavanaugh

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