Three Reactions to the Amtrak and COVID-19 Hearing
September 10, 2020
While the state of play is fairly well-defined at this point, there were a few revelations that came out of yesterday’s hearing.
by Sean Jeans-Gail
Yesterday we got to see Rail Passengers own Jim Mathews testify before the House Transportation & Infrastructure Subcommittee on Rail at a hearing on Amtrak’s Response to COVID-19. Testifying alongside’s Amtrak President & CEO William Flynn, Mathews made a forceful case for the value of the National Network, and the $2 billion bomb 3x service would drop on 'flyover country.'
While the state of play is fairly well-defined at this point, there were a few interesting revelations that came out of yesterday’s hearing.
William Flynn is Not Richard Anderson
This was Amtrak President & CEO’s William Flynn’s first congressional hearing as head of the railroad. It’s clear he’ll set a different tone than his predecessor.
Former Amtrak President Richard Anderson wasn’t shy about telling people he knew the best way to run the railroad—even if it meant direct conflict with Members of Congress, up to and including insulting them to their face.
Mr. Flynn, on the other hand, gave off an air of calm competence throughout his testimony, and let the committee members know that he is paying attention to congressional directives. That includes recent legislative victories we’ve worked hard to secure regarding service on the National Network, where he made clear that he understands lawmakers intend for long distance trains to be part of Amtrak’s long-term future:
“One thing I want to make absolutely clear: these long distance frequency reductions are temporary. We are committed to continuing to operate our current long distance network and to improving the service we provide to our long distance passengers. However, we need two things from Congress to enable us to provide a viable long distance service when the COVID-19 pandemic is at last behind us. The first is increased funding for essential long distance capital investments, particularly equipment. Most of the passenger cars we operate on our long distance trains are already, or will soon be, more than 40 years old. These cars have reached the end of their useful lives and must be replaced if we are to maintain current long distance services.”
Of course, in recognizing the supremacy of congressional intent, he places the responsibility for preserving service in the face of sharp declines in ridership and revenue on Capitol Hill. Congress must step up and provide $5 billion in funding to avert catastrophic cuts to service on long distance routes, State-supported services, commuter agencies, and the NEC.
Many Members of Congress Still Don’t Understand How to Assess the True Value of a Transportation Network
During his testimony, Mathews unveiled new research showing that Amtrak’s existing group of daily long-distance trains (excluding the Auto Train) collectively produce some $4.7 billion in annual economic benefits which are widely distributed throughout America’s heartland. He also explained how cutting service to three times per week would cost the U.S. economy over $3 billion per year.
So it was very disappointing to hear a number of Republican committee members asking Amtrak how they planned to get to profitability. Not only does this ignore the folly of trying to evaluate an enterprise's financials during an unprecedented pandemic (just look at the struggles of and government bailouts to the airline industry)… Not only does this completely ignore Amtrak’s depreciation and capital costs—a flawed accounting which you can read about in detail in this Rail Passengers’ white paper… It betrays a misunderstanding of the plain reading of the governing statute.
Mathews made sure to correct the record in an exchange with Rep. André Carson (D-IN):
Rep. Carson: Can you elaborate on what happens to Midwestern cities when daily services are cut. Do you think Congress should mandate daily services?
Mathews: Yes sir, our position is that these services should be at a minimum daily. The reason for that is because of the multiplier effect that these services have in the communities. You know we’ve heard a lot this morning, an assertion, that Amtrak is required by Congress to make a profit—it is not. It is required to minimize subsidies and, when we have the conversation about profit, that ignores the benefits that the communities receive. We talked about that and the Midwest is a perfect example. When we looked at the effect on the long distance routes, 12 of the 15 long distance routes that would be affected by these cuts, those routes together contribute about $4.7-4.8B to the economy. That’s the profit. The profit is going to those communities that are served. And whether you are looking at places like St. Louis, or Indianapolis, or anywhere in the Midwest - these are places that see an outsized benefit in terms of tourism, in terms of visitor spending, in terms of taking vehicles off the road. All of those impacts are measurable and quantifiable. Amtrak itself used to talk about $7.4B of value to the economy that was created, and we think that number is actually a lowball. We think that's actually a little higher than that. When you cut the daily service down to 3x a week, you don't just cut 4 days’ worth of ridership. The ridership declines more than that because of the diminished utility and because of the diminished connections. Chicago is an enormous connection point, as you know, and that is going to be a particularly difficult situation for the Midwest because a lot of those connections will be difficult to make—those trips will simply not take place. $39M of revenue, of connecting revenue, flows through Chicago alone and a lot of these trips aren’t going to originate in Chicago and flow through the Midwest and those trips will not take place because the network does not have the utility in place to make those trips worthwhile. So those are people who will not be getting off in those smaller towns, will not be spending their money in those towns, will not be eating in the restaurants, and will not be supporting the local economy. That’s a big blow, its already a big blow, and it’s only going to get worse.
It's Up to Advocates to Establish a Sense of Urgency
When Chair Dan Lipinski (D-IL) asked what would happen to Amtrak if the railroad were given no additional funds beyond what it normally receives as part of the federal budget, Mr. Flynn said the railroad would be in a “very, very difficult position as a company.” Mr. Flynn went on to talk about the need to make “substantial reductions in all services, and perhaps the elimination of some LD services” to “stave off bankruptcy.” He provided no specifics about what those cuts would look like, and the committee carried on with the hearing.
It is abudantly clear that policymakers and the public have not internalized the threat to our national transportation network. Perhaps it’s Amtrak 50-year history of operating a railroad with insufficient funding. Or the fact that the House has already passed a bill that solves this problem, only to have the Senate drop the ball. Whatever the case, the U.S. is not ACTING as if our national transportation system—passenger trains, public transit, and air service—is currently speeding towards the edge of a cliff.
So it’s up to passengers to state the plain truth: if Congress doesn’t pass a relief package for Amtrak and transit, our nation’s passenger rail network is headed towards disaster. There will be routes that go away permanently and expansion projects that are set back decades, if not permanently.
It’s up to us! Please take part in our campaign to ask for:
- $5 billion for Amtrak, and protections for service and workers;
- At least $32 billion for public transit.
Future generations of America’s passengers are counting on us.
"We would not be in the position we’re in if it weren’t for the advocacy of so many of you, over a long period of time, who have believed in passenger rail, and believe that passenger rail should really be a part of America’s intermodal transportation system."
Secretary Ray LaHood, U.S. Department of Transportation
2011 Spring Council Meeting