Policy Study

Replacing Amtrak

A Blueprint for Sustainable Passenger Rail Service

Executive Summary

Amtrak is a failed national experiment. By its own admission, Amtrak is headed for bankruptcy unless Washington provides another multi-billion-dollar bail-out. Another federal rescue is unjustified considering that federal and state subsidies to Amtrak since its inception in 1971 are nearing $22.5 billion, an amount out of proportion to Amtrak’s usefulness in most of the nation.

The federal government does not run a national airline. It doesn’t operate a national bus company. There’s no justification for a national railroad passenger operation. America needs passenger trains in selected areas, but doesn’t need Amtrak’s antiquated route system, poor service, unreasonable operating deficits, and capital investment program with low rates of return. Amtrak’s failures result in part because it is a public monopoly-the very type of organization least able to innovate.

This study reveals an Amtrak credibility crisis in the way it reports ridership figures, glosses over dwindling market share, understates subsidies, issues misleading cost-recovery claims, offers doubtful promises regarding high-speed rail, lacks proper authority for the freight business it recently launched, and misrepresents privatization as its applies to Amtrak.

It’s time to liquidate Amtrak, privatize and regionalize parts of it, permit alternative operators to transform some long-distance trains into land-cruise trains, and stop service on hopeless routes.

In a post-Amtrak world, the United States can have passenger service closer to market needs, but we first must learn from the 40 nations that are privatizing and regionalizing rail services. Such railway transformations are described more fully in the Appendix to this study. Each of those countries, if it had to struggle with Amtrak, would phase it out of existence. This study offers a plan to create an Amtrak Transition Board to initiate the Amtrak liquidation process, and sets forth policy guidelines for post- Amtrak passenger rail service.