It’s A Helluva Way To Run A Government

Long ago, before Washington decided it did everything so well it should start running a passenger railroad, American slang included a phrase used to express dismay about mismanagement of organizations. The phrase is “Helluva way to run a railroad.” Speaking of Amtrak …

Congress is speaking of it because conservatives are in a Margaret Thatcher mood. It was said she could not see an institution without swatting it with her handbag. Republicans, who praise governmental minimalism, can hardly close their year of glory without asking why the government is in the railroad business.

In a sense it has been for more than a century. The word “cordial” hardly suggests the intimacy between government - federal and state - and railroads in the 19th century, when 10 percent of the public domain was given in land grants to the transcontinental railroads. The Union Pacific was given one-tenth of Nebraska - 4,845,997 acres.

Amtrak began, as did so much that makes today’s conservatives cross, under Richard Nixon, during whose administration there occurred the largest peacetime expansion of government power in American history (wage and price controls) and the creation of the Environmental Protection Agency, the Occupational Safety and Health Administration, forced busing and racial set-asides. He failed to get Congress to enact a new entitlement, a guaranteed annual income, and to embark on what is now called “industrial policy” by funding development of a supersonic transport aircraft.

“All through grade school,” said Nixon, “my ambition was to become a railroad engineer.” Would that he had.

In March 1970, the largest operator of passenger trains, Penn Central, on the verge of bankruptcy, sought permission to end passenger service west of Harrisburg and Buffalo. For that, government deserved a portion of blame, the Interstate Commerce Commission having resisted rate increases commensurate with wage increases unions were winning. In a textbook example of how bad government begets more government, Amtrak was born.

It began operations in 1971, ostensibly as a two-year experiment. It has lost money since 1971, partly because it has been a mini-welfare state appended to the welfare state: It has been forbidden to contract out union jobs, and laid-off workers have been entitled to six years of severance pay. So, having helped make private railroads anemic (jet aircraft, better highways and inept railroad management contributed mightily to the anemia), the government piled on Amtrak its mandates that would keep it running in the red.

Helluva way to run a railroad? What do you expect from something created in defiance of market forces and regarded by its creators, the political class, as several varieties of pork, including an entitlement for small communities that want the government to guarantee continuing rail service for which there is weak demand?

Recently a full-page magazine ad by Amtrak bore this message at the bottom of the page: “No federal funds were used to pay for this message.” What mendacity. Money is fungible, so taxpayers paid for as large a portion of the cost of that ad as they pay of the overall costs of Amtrak - about 20 percent. And Amtrak’s ads are not producing congestion down at the old railroad depot. Amtrak carries less than 1 percent of the people who travel between cities, and half of its passengers are in the Northeast corridor. Most passengers are middle class, many of them business travelers. Almost all have air or long-haul bus transportation alternatives.

Defenders of the subsidies say, as defenders of subsidies do, that we are all benefiting so much that the subsidies “pay for themselves.” Their argument is that because of passenger trains, highways are less congested, air is less polluted, we are delaying the evil day when federal money will have to help build another airport for Boston, and so on.

There is some truth in all these arguments, and a lot in this one: Government even more heavily subsidizes air and road passengers. United Airlines is not expected to build airports and Greyhound is not responsible for maintaining the highways.

However, Congress is poised to shrink Amtrak subsidies from more than $700 million next year to zero by 2002 at the latest, when Amtrak is scheduled to be privatized. Its roadbed needs work, especially in the Northeast, and its rolling stock is old (the average car is 23 years old), so even with more reasonable work rules and more latitude to rationalize routes, privatization may not be possible. But trying to get the government out of railroading is not optional if the conservatives’ determination to rationalize government is real.