'Nightly News' Doesn't Mention that Amtrak Infrastructure Spending May Just be 'Good Money After Bad'

While U.S. banks and automakers may be benefiting from taxpayer bailouts, they certainly haven’t escaped criticism of everything from their executive compensation and their business practices to the ethics of their leadership. Not so with another failed business model. National passenger rail service provider Amtrak continues to get a free pass.

An “NBC Nightly News” segment on April 11 examined the $8 billion destined for Amtrak that was included in the stimulus bill recently signed into law by President Obama.  Correspondent Tom Costello’s conclusion? It’s not nearly enough.

“At Washington's Union Station, the morning rush for the express trip up the Northeast corridor: two hours and 45 minutes from D.C. to New York,” Costello said. “Another three and a half to Boston.” The high-speed trip on Amtrak’s Acela train, Costello said, is “a hit with passengers and President Obama’s working model of a new transportation system that makes high speed trains a national priority. The ultimate goal, as many as 11 high-speed corridors on both coasts, the Midwest and Deep South – using $8 billion of economic stimulus money as a down payment and billions more later.”

According to Costello, the American version of high-speed rail pales in comparison to that in Europe and Japan, since the tracks weren’t designed for high-speed trains.

“High-speed trains are already common in Europe and Japan, where bullet trains do speed along at 200 miles per hour and more,” Costello said. “But this is the country's only high-speed rail line. The Acela train travels from D.C. through Philly, through New York and up to Boston. It can hit 150 miles per hour but, because of track limitations, it really averages just 84.”

Joseph Boardman, the president and CEO of the beleaguered rail carrier, explained that to achieve Acela’s maximum potential, a $5-billion investment is needed just between Washington, D.C. and New York City.

“In order for us to go 150 miles an hour, to use the capabilities of Acela, we need investment right now of about $5 billion between Washington and New York,” Boardman said.

But it doesn’t stop there. According to Costello, the $8 billion in the stimulus is just the tip of the iceberg.  Many more billions will be needed to achieve the Obama administration’s high-speed rail goals.

“Five billion just to upgrade the Acela route,” Costello said. “In California, a planned high speed line from San Francisco to L.A. is projected to cost $45 billion, which means the $8 billion in the stimulus package not yet allocated may not go very far.”

Costello omitted one detail from his report – Amtrak loses a lot of  money. As reported by Reuters, Senate Republicans claim Amtrak has received over $21 billion in federal tax dollars to cover operating and capital costs since 1971. However, Amtrak loses more than $700 million annually. There’s no indication that Amtrak will do an better with billions more, or even that it’s high-speed rail priorities are in order.

Proponents point to the New York to Washington corridor as a place to put stimulus money into Amtrak, even though as Bloomberg reported on March 3 that ridership decreased 13 percent for February.

“We need to focus that money on the number one line in this country, New York to Washington, where we can best prove the success of high-speed rail,” Joseph Vranich, a railroad consultant, said.

Vranich has been consistent on his push for the focus on the northeastern Amtrak corridor. Back in 2005 Vranich condemned Amtrak’s mismanagement of federal funding, focusing on non-profitable lines instead of the Boston-New York-Washington corridor in an article for National Review.

 “The real cost for a high speed network, hundreds of billions of dollars for trains and tracks,” Costello said. “The question for Congress – whether a national high-speed rail network is worth the investment.” Given the facts about Amtrak that Costello didn’t report, the probable answer is no.