December 4, 2012
On the same day that Mayor Michael Bloomberg met with Congressional leaders on Capitol Hill requesting billions in federal aid to rebuild New York, Congressman John L. Mica conducted a committee oversight hearing on Amtrak’s ongoing structural reorganization.
Mica regularly chides Amtrak as a “Soviet-style” intercity passenger rail service that mismanages and wastes taxpayers’ money. But Democratic committee members reminded Mica that the government has spent more on the oil and energy companies in one year than the life of the program of Amtrak.
The purpose of the meeting was to gauge how Amtrak is proceeding with its five-year strategic plan to transform it into more of a business and less as a government entity.
Mica, who will be stepping down as chairman of the House Transportation and Infrastructure Committee in January, has been a notable critic of Amtrak’s operations. He, along with incoming chair Rep. Bill Shuster, called for legislation last year to privatize Amtrak’s most profitable route, the Northeast Corridor.
But he said on Wednesday, November 28 that he was approaching the hearing with a very open mind.
“Amtrak’s strategic plan is very important. It requires a transformative approach, not just rearranging chairs on the deck of the Titanic. We want to make sure there’s positive progress.”
But Democratic Congressman Elijah Cummings believed the hearing was unnecessary because the hearing has been one of seven just on Amtrak in the 112th Congress.
“In this fiscal year , Amtrak achieved the highest ridership levels in history. That’s major news. Major. While we must conduct a thorough oversight over Amtrak’s federal funding, appropriate oversight doesn’t require micromanagement of all facets of the organization,” said Cummings.
Mica took exception to the criticism.
“I don’t consider my role as micromanaging when the GAO [General Accountability Office] has said that Amtrak needs a strategic plan. The very least they can do is have a business plan, especially an entity that receives taxpayers dollars,” said Mica.
Mica has been advocating as chairman for reducing subsidies to Amtrak, but he also proclaimed his commitment to passenger rail.
“There’s no one who is a stronger supporter of passenger rail service in the United States than this guy right here. It’s cost effective. It’s a winner for the environment and energy. I’m a fiscal conservative. It can move more people for less.”
“But we have to do it with the least amount of subsidy, and God for forbid there’s a profit in some of these operations,” Mica said.
Joseph Boardman, Amtrak’s CEO, testified at the hearing, along with Amtrak’s Inspector General Theodore Alves and the United Transportation Union’s national legislative director, James Stem.
Boardman said that since Amtrak released its five-year strategic plan in November 2011, the company has been moving forward with the recommendations outlined in the plan to improve efficiency and accountability. Cummings buttressed Boardman’s claim by arguing Amtrak needs time to implement its five-year plan.
“We have to give Boardman and his leadership team the space they need to fully implement their plans rather than require them to return to the Hill every few weeks,” Cummings said.
However, Mica pointed to one example of waste in Amtrak’s operations. Amtrak’s food commissary and delivery used to be overseen by the marketing department, which poorly coordinated the different functions, before they were consolidated under another department.
“Again, I’m not micromanaging, but you were losing $79 million with a captive audience three years ago, and those losses increased to $84.5 million this year.”
Then he quipped, “Yesterday [on the Acela train from New York] I didn’t order any food or drink, so I saved the taxpayers money.”
Mica and other fiscal conservatives prefer Amtrak to increase revenue and rely less on government subsidies to cover operating and capital expenses. But outgoing Democratic committee member Laura Richardson noted that the U.S.’s transportation investments have been weighted to autos and planes.
“Since 1958 our country has invested $1.4 trillion on the highway network, $538 billion for aviation, $266 billion for mass transit and $41 billion for Amtrak since its inception in 1971.”
“Clearly, this is an imbalance that shouldn’t continue,” said Richardson.
Mr. Boardman was asked by Republican committee member Larry Bucshon whether passenger rail service in the U.S. can be profitable.
“No, not without a policy decision by Congress, which is lacking,” said Boardman.
He explained to the committee that there needs to be a decision just as there are daily decisions to invest in the highway and aviation networks.
“About 50,000 out of 60,000 DOT employees are focused on supporting and maintaining our aviation system. Congress has a lot to decide on what it expects in passenger rail across the county.”
UTU’s Mr. Stem, whose union members are supporting Amtrak’s reorganization efforts, said that the investment disparity noted by Ms. Richardson highlights the challenges Amtrak faces.
“The growth of the Northeast Corridor is an indication that we need other transportation options. Even the chairman admitted that moving people by rail is the most cost effective. But the network Amtrak runs trains on dates back to the 1850s. The stations in Baltimore and Philadelphia are serviced by tunnels built in the 1880s. Amtrak not only has to revitalize its operational plan, but its network too, which it has projected to be $151 billion.”