Amtrak's answer to competition (Part II)

(Revised July 6, 2012)

After months of wrangling, Congress recently passed a law reauthorizing spending on the nation’s roads and public transit systems. Like a Chrismas tree, it had something for everyone. Missing when Senate and House conferees reconciled their versions of this law were three provisions in the U.S. Senate bill that should be labeled “written for Amtrak.” They were simply bizarre, not to mention outrageous. I’ll describe them.

Section 35601 required that all public agencies, private companies and states that operate passenger services be licensed by the Surface Transportation Board — except Amtrak and also the freight railroads, whose political arm, the Association of American Railroads, lobbied an exemption. What a lovely barrier to entry this is to those companies which compete with Amtrak to run commuter rail services for public agencies. In case you haven’t heard, Amtrak has a lousy track record keeping contracts it has to run commuter trains. This would surely have helped it get some of them back, by throwing red signals in the face of private commuter train operators, who routinely underbid and outperform Amtrak.

Amtrak spokesman Steve Kulm disagrees with my conclusion. He says the Senate language exempted only tourist, historical, or excursion passenger rail operators or “other rail carrier that has already obtained construction or operating authority from the Board,” and that Amtrak is not one of these. However, experts I consulted contend that Amtrak has always been exempt from STB regulation except for a handful of specific purposes. They say the portion quoted by Kulm applies only to the requirement that STB set up and enforce licensing. In other words, Amtrak would have a seat at the table as the STB devised the licensing. But they claim Amtrak would continue to be exempt from the actual licensing requirements. Was this sloppy drafting, or an attempt to quietly exclude Amtrak through extraordinarily clever drafting? It beats me.

Section 35207 was a doozy. Let’s say a state chooses a company other than Amtrak to operate a state-supported passenger service, as is its right. Let’s also say that the federal government has invested money in the infrastructure of that route — for instance, the more than $11 billion awarded for so-called high-speed rail programs. Section 35207 would make the non-Amtrak train operator pay the government a fee that reflects the benefit of that federal funding. For example, if the $1.3 billion being spent between Chicago and St. Louis were to result in a 50 percent jump in ridership and revenues, the government could conceivably claim half of the revenues as its own. Amtrak is exempted, of course. But if you accept the logic of this provision, which I do not, then Amtrak should be just as liable. But if it were, this provision would never have appeared in the first place.

Amtrak’s Kulm maintains that this provision comes from a bill that Senator Dick Durbin (D-Ill.) introduced last year when Republicans sought to privatize the Northeast Corridor. That’s fine, but an organization of secretaries of transportation for 34 states, called States for Passenger Rail Coalition, never read the language as applying only to the NEC and stated that enactment would “lock states into a sole-source relationship for the operation of passenger corridors.” We will have to agree to disagree.

Section 35105 would have pooled all the passenger cars henceforth built for state-supported intercity trains into a new entity that Amtrak would largely control. As it stands, cars that California buys for trains in its state are under California’s sole control. As applies to cars built under the Next Generation design that Congress mandated be devised, this would no longer be the case. Next Generation cars that California buys could end up in North Carolina, just as cars North Carolina finances could end up in Michigan.  

Says Kulm of this section: “This is not something that came from Amtrak, and we wouldn’t have gotten control over the equipment at issue even if it had been enacted.” It is true that states as well as Amtrak would have controlled this pool, but it’s my contention that Amtrak would have been the 800-pound bear in the room. Here’s what Paula Hammond, secretary of transportation for Washington state, said: “To have the federal government force states to place their equipment in a pool and give an outside entity the authority as to where those assets are deployed is not a proven concept, nor is it one with which other modes of transportation must comply. . . Additionally, such a provision . . . would like violate state law.”

None of these noxious provisions were contained in the highway bill passed by the U.S. House of Representatives. One House staffer told me it’s as if the two pieces of legislation “were written on different planets.” Nor does anyone profess to know which senator or senators slipped these provisions into the bill, because there have been no hearings or public discussions on any of them.

Well, in the end these were all moot points. Representative John Mica (R-Fla.) flatly refused to agree to any reconciliation of the Senate and House bills that included these three provisions, and out they finally went. Congress has a sad history of making important public policy by slipping stuff like this into bills after hearings are held and with no discussion or even identification of which congressmen or senators are doing the bidding of unknown parties. This time it didn’t work. I for one am glad of that. — Fred W. Frailey