NCPA - National Center for Policy Analysis

Amtrack Spending

December 31, 1996

Already receiving $1 billion a year in federal subsidies for operating costs, Amtrak now wants a trust fund established to cover capital needs. A new study from the Cato Institute rejects the passenger rail service company's plea.

  • Established 25 years ago, Amtrak was supposed to become solvent five years later -- but did not.
  • Amtrak has so far cost taxpayers $13 billion in federal monies.
  • Taxpayers subsidize each rider by an average of about $100 -- or about 40 percent of the total per passenger cost.
  • The round trip subsidy for a passenger going from New York to Los Angeles runs $1,275 -- more than three times a typical discount airfare.

Only 0.4 percent of Americans traveling between cities use Amtrak.

Cato's economists figure some of Amtrak's busier routes could be profitable if they were freed of red tape. (One rule requires that laid-off Amtrak workers get six years severance pay.) Routes which could be money-makers include Boston-Washington, Santa Barbara-Los Angeles-San Diego and Chicago-Seattle.

Many economists contend that the best solution is to privatize the system and get Amtrak out of taxpayers' wallets.

Source: Perspective, "Taken for a Ride," Investor's Business Daily, December 31, 1996.


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