Amtrak presentation


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This is the powerpoint presentation used for the oral report based upon my "Amtrak Funding Debate" paper.

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  • Before the implementation of the capital plan Amtrak just fixed things when they broke, which was more costly and inefficient.
  • Amtrak presentation

    1. 1. The Amtrak Funding Debate: Why Amtrak Should Continue to Receive Federal Subsidies Adam R. Schott
    2. 2. Issue <ul><li>In February 2005, President George W. Bush announced that his Fiscal Year 2006 Budget for the United States would include no funding for Amtrak. </li></ul>
    3. 3. Background <ul><li>Official name: National Railroad Passenger Corporation </li></ul><ul><li>Created by Congress in 1970 </li></ul><ul><li>Purpose: “to take over the money-losing passenger service previously operated by freight railroad companies” </li></ul><ul><li>Has received over $30 billion in subsidies over its life </li></ul><ul><ul><li>Air & Highway subsidies were $1.89 trillion </li></ul></ul>
    4. 4. Amtrak Subsidies 1972-2004
    5. 5. Business – Government Relationship <ul><li>No intercity passenger rail system in the world operates without some form or government subsidization </li></ul><ul><li>European passenger rail systems receive much more government support </li></ul><ul><ul><li>British Rail System - $14.5 billion </li></ul></ul><ul><li>Congress created Amtrak to ensure that there would be an intercity passenger railroad, yet it does not commit the necessary resources to allow it to succeed </li></ul>
    6. 6. Rationale for funding withdrawal <ul><li>When Amtrak was created it was expected to rapidly become a for-profit, self-sustaining entity </li></ul><ul><li>Amtrak has not made significant progress towards financial independence and stability and has not kept up with the times </li></ul><ul><li>Amtrak “cannot even support the existing service, much less expand in the way that it needs to” </li></ul><ul><li>Amtrak is “dying, and everyone knows it” </li></ul>
    7. 7. Amtrak’s Response <ul><li>Amtrak has made significant progress in recent years </li></ul><ul><li>Sending Amtrak into bankruptcy will have the exact opposite effect that President Bush and Secretary of Transportation Mineta desire </li></ul><ul><ul><li>“ Needed reforms will likely result in higher front-end restructuring costs. (‘Route elimination, fro instance, will often incur substantially greater labor-related costs in the early years than would route continuation; but such costs can be carefully phased and managed.) And for passenger rail to have any chance of succeeding under Amtrak’s auspices or in others’ hands, legislative action is essential to remove constraints that will otherwise permanently undercut its performance in an increasingly competitive environment” (2005 Report to Congress) </li></ul></ul>
    8. 8. Progress at Amtrak <ul><li>Under the new leadership of David Gunn, Amtrak is finally headed towards greater financial independence and profitability </li></ul><ul><li>Since he took over in May 2002, Gunn has made the following changes </li></ul><ul><ul><li>The development of accounting and financial reporting systems </li></ul></ul><ul><ul><li>A reduction in personnel by almost 5,000 </li></ul></ul><ul><ul><li>Termination of the mail and express operation </li></ul></ul><ul><ul><ul><li>Removed a number of road locomotives and switch engines from service, thus lowering maintenance costs </li></ul></ul></ul><ul><ul><li>Elimination or truncation of three long-distance routes </li></ul></ul>
    9. 9. Progress (continued) <ul><ul><li>No new borrowings, and the scheduled repayment of the $100 million D.O.T. loan over a five year period begun in 2004 </li></ul></ul><ul><ul><li>Increased ridership from 22.5 million in 2000 to 25.1 million in 2004 </li></ul></ul><ul><ul><li>Containment of the cash operating requirement at or below $570 million </li></ul></ul><ul><ul><li>The development of a detailed and prioritized five-year capital plan focused on restoring the Northeast Corridor to necessary levels of reliability and safety, and on restoration of an aging fleet of rolling stock used throughout the system </li></ul></ul>
    10. 10. National Outcry: The Government – Society Relationship <ul><li>The Bush Administration plans on reintroducing the Passenger Rail Reform Act </li></ul><ul><ul><li>Transfers funding from the federal government to the states </li></ul></ul><ul><ul><li>The federal government would help out state governments (up to 50%) but only to states that come up with their share. </li></ul></ul><ul><ul><li>Congress voted the original bill down in 2003 </li></ul></ul><ul><li>Congressmen from all over the nation are outraged at the Bush Administration’s plans </li></ul><ul><ul><li>Sen. Rick Durbin (IL): “The most basic inquiry would have told the Administration that the State of Illinois is not in a position to pick up the subsidy of Amtrak.” </li></ul></ul><ul><ul><li>Sen. Frank Lautenberg (NJ): “President Bush is willing to spend billions to send a couple of people to Mars, but not one dime for Amtrak’s 25 million annual travelers, who want better rail service to destinations on this planet” </li></ul></ul><ul><ul><li>Rep. Jim Oberstar (MN): “Never have I seen [a budget] so harsh or crass as this…It would cause widespread disruption and hardship.” </li></ul></ul>
    11. 11. Government – Society Relationship (cont’d) <ul><li>Senators Robert Byrd, Hillary Clinton, Edward Kennedy, and John F. Kennedy co-sponsored an amendment to the 2006 budget bill that would provide Amtrak with $1.4 billion to save it from bankruptcy. </li></ul><ul><ul><li>Failed 52-46 </li></ul></ul><ul><ul><li>Now up to the House of Representatives to restore the funding </li></ul></ul>
    12. 12. The Business – Society Relationship <ul><li>Amtrak provides a valuable service to many states and communities </li></ul><ul><ul><li>Provides jobs and tourist revenue </li></ul></ul><ul><ul><li>Allows citizens to travel from city-to-city for much less than and airline and in less time than a bus service. </li></ul></ul>
    13. 13. New York <ul><li>Senator Hillary Clinton: </li></ul><ul><ul><li>Amtrak is an essential component of our transportation network that provides irreplaceable capacity and mobility to New York and the nation </li></ul></ul><ul><ul><li>Slashing Amtrak’s federal funding would eliminate critical rail service to millions of New Yorkers and others who ride our rails. It would throw our commuter rail lines into chaos and would have catastrophic economic consequences for the state and the region. </li></ul></ul>
    14. 14. Massachusetts <ul><li>Residents depend on the high-speed Acella Express for travel to New York and Washington </li></ul><ul><li>“ Despite troubles with delays, millions of people use the services every year and would be forced to rely on increasingly crowded busses and air travel.” -- Casey Ross, The Boston Herald </li></ul>
    15. 15. California <ul><li>Losing Amtrak would undermine the economies of the stations that serve 9.3 million passengers a year </li></ul><ul><li>Amtrak’s growth is not just in the major cities but also on the long-distance trains that serve hundreds of cities and rural communities </li></ul>
    16. 16. Louisiana and Mississippi <ul><li>According to the Louisiana Association of Railroad passengers, Amtrak </li></ul><ul><ul><li>Employed 465 residents </li></ul></ul><ul><ul><ul><li>363 Louisiana </li></ul></ul></ul><ul><ul><ul><li>102 Mississippi </li></ul></ul></ul><ul><ul><li>Paid total of $18,804,934 to those employees </li></ul></ul><ul><ul><li>Spent $5 million for goods and services </li></ul></ul><ul><li>If Amtrak is forced into bankruptcy rail travel through these and other southern states will likely be eliminated </li></ul>
    17. 17. Arkansas <ul><li>Rep. Marion Berry: “Infrastructure is the lifeblood of rural America. We cannot expect to eliminate transportation options for growing areas of this country and expect their economies to continue to expand </li></ul>
    18. 18. Closing Remarks <ul><li>The job of the federal government is to “promote the general welfare” (U.S. Constitution, Preamble) </li></ul><ul><li>The job of private business is to make a make profits and increase shareholder wealth </li></ul><ul><li>This country needs a national intercity rail system </li></ul><ul><ul><li>Private business is not going to operate one because they are not profitable. </li></ul></ul><ul><ul><li>If the government withdraws its funding of Amtrak it will not be serving the best interests of its citizens and will jeopardize the welfare of many communities. </li></ul></ul>