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Amtrack disastrous for passenger rail service
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- Amtrak’s quick creation to relieve railroads of their uneconomic passenger train burden was to have unintended, but enduring, political consequences that constrained passenger rail innovation.
- Keeping freight trains operational in the Northeast and Midwest was essential to core economic activities such as automobile manufacturing and electric power generation.
- Instead of partnering with private enterprise, government entered the rail- road business directly and decisively.
- The resulting public enterprise put the US government directly in the business of running a major freight railroad that served large parts of the Northeast and Midwest.
- During this same time period, America’s intercity passenger trains also became wards of the state, but their guardianship has extended through more than 40 years of publicly subsidized oper- ation.
- Amtrak was created by the Rail Passenger Service Act of 1970
- In this Congressional micromanagement, both supporters and skeptics proved capable of blocking the opposing coalition’s preferred fiscal instrument setting
Amtrack disastrous for passenger rail serviceUncertainty, political agendas, and lack of direction doomed Amtrack from beginning; such examples have stifled other passenger train developmentPerl 2012 (Anthony, Political Science Department & Urban Studies Program, Simon Fraser University, Vancouver, BC, Canada Assessing the recent reformulation of United States passenger rail policy Journal of Transport Geography 22 (2012) 271–281 www.elsevier.com/locate/jtrangeo) 3. A lengthy sidetrack: how the rail industry’s restructuring routed rail passenger policy into a protracted stalemate 3.1. An industry in crisis Over the course of the four decades between 1971 and 2009, the United States passenger rail subsystem has changed less than it did during the policy experiments and demonstration projects under- taken during the 4 years between 1965 and 1969. The reason for the sudden burst of innovation followed by a prolonged period of stagnation was the creation of a quasi-public enterprise, Amtrak. Amtrak both reflected and suffered from a quick policy fix for a transport problem that could not wait any longer for government’s attention. In a clear example of the garbage can model’s arbitrary fusion of a policy problem and a solution that were more suited for one another by virtue of temporal proximity than substantive compatibility, Amtrak’s quick creation to relieve railroads of their uneconomic passenger train burden was to have unintended, but enduring, political consequences that constrained passenger rail innovation. The partnership that had enabled the Metroliner’s commercial success was derailed by an industrial crisis that vaulted the rail- road industry’s survival well ahead of passenger train development among government’s policy priorities. After the Penn Central Transportation Company’s bankruptcy in 1970, which represented the largest corporate failure in American history at that time, gov- ernment was compelled to act. Keeping freight trains operational in the Northeast and Midwest was essential to core economic activities such as automobile manufacturing and electric power generation. Resolving the freight railroad crisis required govern- ment to grapple with a series of policy problems that had been ne- glected precisely because of their acute political challenges. The passenger train problem became a sideshow in this larger policy making struggle. The policy that ensued was driven by a political calculus of blame avoidance (Weaver, 1986), because the adjustment costs of restructuring bankrupt railroads would be immediate and pain- ful to concentrated groups (e.g., railroad workers, communities that lost rail access) while the benefits were widespread (e.g., reduction in future subsidies) and would not be seen for a decade. The approach taken to reverse railroads’ competitive decline took a different approach from the administrative capacity building put forward by High Speed Ground Transportation Act of 1965. Instead of partnering with private enterprise, government entered the rail- road business directly and decisively. Government’s industrial interventions between 1971 and the 1980s and their salutary effect on US freight railroading are de- tailed by Saunders (2003). Breaking with several established para- digms, the federal government embraced economic deregulation of the rail industry, it invested heavily in public enterprise, it facili- tated abandoning uneconomic rail infrastructure, and it embraced measures to downsize the railroad workforce. In 1976, the Consol- idated Railroad Corporation (Conrail) took ownership of the bank- rupt Penn Central along with the wreckage of six smaller insolvent Northeast and Midwest railroads. The resulting public enterprise put the US government directly in the business of running a major freight railroad that served large parts of the Northeast and Midwest. 3.2. Government initiative in freight rail restructuring This new line of business consumed billions in government sub- sidies for operations and renewal of physical plant. Severance pay- ments were made to redundant workers, and funds were given to short line freight carriers and to state and local governments that assumed responsibility for commuter train operations. While pub- lic ownership of bankrupt freight railroads and operating subsidies were introduced as stopgap measures, the enduring policy legacy of this period was created by Public Law 96-448, better known as the Staggers Rail Act of 1980. The Staggers Act introduced a major retrenchment of government’s administrative capacity – through deregulating railroad rates and services that had become ossified under America’s oldest regulatory bureaucracy, the Inter- state Commerce Commission. The administrative talents applied to freight railroad regenera- tion grew considerably once previous policy constraints had been removed. Keeler (1983,p. 99) characterized the Staggers Act as ‘‘. . . the most dramatic change in federal policy towards the rail- roads since the Interstate Commerce Act of 1887 – in some ways an even more dramatic change than that law, because while the 1887 act codified principles already existing in common law. . . the Staggers Act completely reversed earlier policies. Assessing the effect of this new policy, Winston and colleagues (1990, p. 65) concluded that the deregulatory regime ‘‘. . . forced the rail and motor carrier industries to become more innovative and effi- cient’’ yielding an annual rail industry profit increase of $2.8 billion in 1988 dollars. And Wilson (1997) estimates that productivity in the US freight rail sector grew by 40% during the 1980s, compared to arrangements under the pre-existing regulatory regime. Government’s combined intervention of massive public invest- ment in freight rail restructuring and sweeping deregulation of freight rates and services enabled the economic wreckage of bank- rupt Northeast and Midwest railroads to be resurrected. By 1983, Conrail began to turn a profit. And in 1999, after years of consistent profitability, Conrail was split up and sold to two private rail cor- porations, CSX and the Norfolk Southern. During a span of less than a quarter century, a major component of the US freight rail net- work had been nationalized, overhauled both organizationally and technically, and then profitably conveyed back into the private sector. 3.3. Creating public enterprise to fix the railroad industry’s passenger train deficit During this same time period, America’s intercity passenger trains also became wards of the state, but their guardianship has extended through more than 40 years of publicly subsidized oper- ation. In examining the policy change that ushered America’s pas- senger trains into many decades of uneconomic public enterprise, political expediency can be seen to have bought a quick fix at the expense of creating capacity for the kind of transformation that drove Conrail’s turnaround, as well as the reinvention of passenger trains in Asia and Europe (Dunn and Perl, 1994). Amtrak was created by the Rail Passenger Service Act of 1970. It came into existence 5 years ahead of Conrail, yet never achieved the economic renaissance accomplished by its freight counterpart in government’s rail portfolio. Instead, this quasi-public enterprise has struggled to preserve America’s passenger trains in much the same economic position as they existed at its inception. Before the Northeast railroad bankruptcies, there had been growing de- bate, but little action, on the policy problem posed by uneconomic passenger trains. Sabatier and Jenkins-Smith’s (1993) concept of an Advocacy Coalition Framework (ACF) helps to clarify how political conflict prevented Amtrak from gaining a mandate for policy inno- vation, with policy deliberations instead degenerating into a per- petual skirmish over the corporation’s legitimacy. In the ACF, core beliefs unite political factions that struggle to advance or undermine policy options depending on how these re- late to their beliefs. In passenger train policy, the ACF perspective reveals a policy subsystem divided between supporters of govern- ment intervention and skeptics of public initiative in rail transpor- tation. These core beliefs oriented rail passenger supporters and skeptics to draw opposite conclusions about this mode’s problems, and thus endorse incompatible policy options to address the future. Passenger rail supporters such as Senator Pell, rail labor unions, local governments that valued train access, and others saw nothing inherently incurable in the passenger train’s economic decline. A combination of new technology and better organization, embodied by the bullet trains of Japan and validated as being transferable to the US by the Metroliner project, could put passenger trains back on track. Conversely, passenger train skeptics, which included fis- cal conservatives, advocates of aviation and the automotive–indus- trial complex, and many freight railroad industry leaders, saw passenger trains suffering from the terminal stage of technological obsolescence. American economic and spatial development was seen to require the higher speeds of aircraft over bullet trains, and the flexibility that only automobiles could offer in accessing sprawling suburban development. As predicted by the ACF, supporters and skeptics could never agree about how to address the mounting passenger train deficits incurred by America’s railroads. When bankruptcy of the Northeast carriers provided an exogenous shock that was sufficient to precip- itate federal intervention, the only thing that all sides could agree upon was the urgency of relieving freight railroads from the crip- pling passenger rail burden. But unlike the specter of freight rail cessation undermining heavily reliant sectors of the US economy (e.g., auto manufacturing, chemical production, and electricity gen- eration) there was no perceived corresponding misfortune that an end to intercity (as opposed to commuter) passenger trains would visit on the American economy. As a result, there was no political exigency that could reshape the balance of power in policy deliberations and thus enable either the supporters or the skeptics to introduce their preferred beliefs as the guiding principles to shape Amtrak’s enabling legislation. Instead, Amtrak’s legislative mandate was constructed on an un- founded assumption – that a new partnership between govern- ment and the railroad industry could quickly undo the passenger train’s economic decline and yield a self-sustaining operation. The Rail Passenger Service Act of 1970 offered all private rail- roads the option of immediate exit from the passenger operations that they had unsuccessfully sought to abandon through regula- tory proceedings before the Interstate Commerce Commission. In return for literally buying into a new mixed enterprise, private rail- roads would be rid of further liability for passenger operating def- icits. Once freight railroad partners made their initial investment in Amtrak, based on a percentage of their passenger train losses in 1969, the federal government kicked in a $40 million grant to cover start-up costs and provided a $100 million loan guarantee to take care of contingencies. This capitalization was supposed to sustain Amtrak through its rapid reinvention of the passenger train business, which would yield profits to repay both the railroads and the govern- ment for their initial investment. The fatal flaw that rendered Amtrak’s founding strategy no better than a ponzi scheme was that the corporation was given no clear mandate about whether it was supposed to grow or shrink the passenger train business to attain profitability. Amtrak then received inconsistent guid- ance from government when attempting to pursue either strategy. America’s private railroads quickly concluded that they could make more money from carrying freight than what they would re- ceive from any successful partnership with Amtrak. To many skep- tics, Amtrak’s greatest value would be generated by its capability to successfully manage the blame for euthanizing uneconomic pas- senger trains. Abandoning routes, closing stations, and laying off redundant workers had proven difficult enough policy outputs for private industry to pursue through regulatory proceedings be- fore the Interstate Commerce Commission. Such downsizing threa- tened to become virtually impossible if Congress was to play a growing role in the subsystem. Creating Amtrak as a ‘‘for profit’’ corporation at arm’s length from government offered at least the potential for political insulation that could facilitate ‘‘rational’’ decisions. Despite the obvious ambiguity in Amtrak’s legislative formula- tion, neither supporters nor skeptics were motivated to press for clarity. If a rail passenger renaissance would require ongoing sub- sidies and a much more active role for government, as supporters expected, then downplaying government’s future involvement ap- peared strategic. Skeptics also found it prudent to remain circum- spect regarding their intended meaning of Amtrak’s ‘‘for profit’’ status and how this would orient the corporation’s business model toward an orderly winding down of this transport mode. Weaver (1985, p. 87) captured the resulting ambiguity that accompanied Amtrak’s creation when he noted that ‘‘Innovation in policy instruments served as a substitute for innovation in policy’’ at the corporation’s founding. But once Amtrak began operating, the policy instruments that had been deployed by the federal govern- ment to initiate passenger rail restructuring required making choices that quickly became politicized. Whatever decisions that Amtrak made, from the routes and frequencies it operated, to the fares it charged, to the level of on-board services, supporters and skeptics could be counted upon to lobby Congress for their preferred approach. Amtrak has subsequently developed into one of the world’s most politicized railroad organizations. The US Congress has regu- larly intervened to dictate how routes and services should be man- aged (Wilner, 1994). In this Congressional micromanagement, both supporters and skeptics proved capable of blocking the opposing coalition’s preferred fiscal instrument setting (e.g., either abolish- ing, or vastly expanding, federal subsidies). But neither side could deny their opponents an influence over the policy instruments that kept Amtrak operating in a precarious limbo between preservation of the status quo, and insolvency and shut-down. In the ensuing impasse, neither the rail passenger renaissance that supporters aspired to, nor the winding down of most passen- ger train operations favoured by skeptics, came to pass. Instead, prolonged trench warfare in Congress over Amtrak’s budget dis- placed deliberation over broader policy options that might have moved America’s passenger railroading beyond its state of limbo (Perl and Dunn, 1997). These perennial struggles to abandon or preserve parts of the Amtrak system crowded out most opportuni- ties to consider more fundamental changes to rail passenger policy, such as investing in purpose built high-speed rail infrastructure. Since the 1980s, freight carriers have been the locus of innova- tion in America’s railroad industry (Martin, 1992; Loving, 2006). From enhancing productivity to lowering fuel consumption and emissions, US freight railroads have demonstrated impressive re- sults. This successful trajectory was reminiscent of the claims that supporters had made about what Amtrak’s new approach to run- ning passenger trains could produce but did not. Another casualty of the rail passenger policy stalemate has been the American industry that used to produce passenger train tech- nology. Of the three industrial partners in the Metroliner project, two have gone out of business (the Budd Company and Westing- house) and one (General Electric) has not produced another high- speed electric passenger train since 1969. Instead, the relatively small amount of new passenger train equipment that has been operated by Amtrak has been designed and manufactured by Cana- dian and European manufacturers and assembled from kits sent to US locations that were established to satisfy ‘‘Buy America’’ requirements in federal funding. 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