Amtrak defends operating losses as funding fight gets rolling

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Rep. John Mica (R-Fla.), who is a frequent critic of Amtrak, dismissed the company’s recent increases in ridership.

“Some of the subsidies per passenger ticket have come down a bit, we’re still $45.45,” Mica said. “For last year, every single passenger ticket was underwritten.”

The hearing came a day after President Obama requested that Congress approve $40 billion in funding intended to develop new high-speed railways in the U.S. Since it was created in 1971, Amtrak has received approximately $1 billion annually from Congress to subsidize unprofitable long-distance routes where passengers are more likely to opt for flying or driving.

In 2014, Amtrak is requesting $373 million for its operations and $2.27 billion for capital expenses.

Lawmakers are expected to take up a major rewrite of the bill that currently contains the authorization for Amtrak’s funding, Passenger Rail Investment and Improvement Act (PRIIA). The current version of the legislation is scheduled to expire this year, and lawmakers in both chambers have identified its renewal as a top priority for 2013.

Federal Railroad Administrator (FRA) Joseph Szabo told lawmakers Thursday that it was not realistic to expect Amtrak to turn a profit on its long-distance routes, though he said they were necessary to ensure rural areas had access to transportation.

“We should not suffer any illusions that we're going to make a profit on long distance services,” Szabo said.

Amtrak categorizes its routes as Northeast Corridor (NEC), where the company owns the tracks its trains run on, state-supported routes where service is paid for mostly by state and local governments, and long-distance routes, which are heavily subsidized by Congress.

Amtrak CEO Boardman told lawmakers Thursday that the routes could not be easily separated from each other because Amtrak was a “network operation.”

“One of my big worries and concerns here is that what the concept may be in reauthorization is that we can split out the northeast corridor … and then operate or not operate the rest of the country,” Boardman said. “We bring over half a million people a year into the northeast corridor from the long-distance trains. That’s 1,300 and some odd people a day.” 

FRA Administrator Szabo added that despite the losses on Amtrak's long-distance routes, there was a “pent-up demand” for rail service in the U.S.

"Amtrak has set ridership records in nine of the last 10 years," Szabo said, asking lawmakers to grant rail funding “parity” with other forms of transportation like roads and mass transit.

Democrats on the panel were sympathetic to Amtrak’s argument that it was worth it to sustain losses on long-distance routes to increase coverage of rail service in the U.S.

“I live in an urban area and I'll die there,” Rep. Elijah Cummings (D-Md.) said. “But I'll fight like hell for somebody in rural South Dakota or wherever to have access to transportation."

Republicans argued that rural communities could be better served by private rail companies.

“I intend to move forward with trying to open up all passenger rail service currently operated by Amtrak to private competition,” Mica said. “[There’s] nothing more healthy than private competition.”

Democrats said they prefer instead of the president’s wishes for increased federal funding for rail programs were granted. Since he took office in 2009, Obama has pushed for the development of a nationwide network of railways that would be comparable to the interstate highway system.

“We did have an election, and the president won,” Rep. Corrine Brown (D-Fla.) said. “Some of his proposals should go through."

The current PRIIA legislation is set to expire in September.