• Mr. Steven J. Muehler

Steve Muehler's Plan to Stop Federal Payments to Amtrak

Updated: Apr 23

The National Railroad Passenger Corporation, now known as Amtrak, was created by the Federal Government to take over bankrupt private passenger rail companies. It began service on May 4, 1971. In fiscal year 2014, it received an operating grant of approximately $340 Million USD and a capital and debt service grant of about $1.05 Billion USD. Amtrak has received over $66 Billion USD (in 2014 dollars) in taxpayer-funded Federal Grants since its inception. Amtrak is not a Federal Agency, employing a corporate structure, and has a board appointed by the United States President; the Federal Government owns nearly all of Amtrak’s stock.

Amtrak is characterized by an unsustainable financial situation and management that often appears more focused on lobbying Congress for more money rather than improving its performance and service for customers. Amtrak has a monopoly on passenger rail service, too, which stifles reform efforts. Labor costs, driven by the generous wages and benefits required by union labor agreements, constitute half of Amtrak’s operating costs; this is an area ripe for reform.

Amtrak trains are also notoriously behind schedule, evidenced by Amtrak’s poor on-time performance rates. For example, the June 2014 Monthly Performance Report showed an on-time performance score of 69.7 percent, which was 6.2 percentage points less than a year prior, when just over three-fourths of trips were on time. In July 2014, Amtrak’s score was 67.2 percent, 7.6 percentage points worse than in July 2013.

Under my Administration, we will eliminate Amtrak’s operating subsidies immediately, while phasing out its capital subsidies over five years, to give Amtrak’s management time to modify business plans, work more closely with the private sector, reduce labor costs, change its marketing, and eliminate any money-losing lines.

Simultaneously, we will require the Secretary of Transportation to set up a task force to work with Amtrak’s management to lay out a future for Amtrak, including but not limited to selling routes and equipment to the private sector, transferring Amtrak ownership to its employees, asking States to assume ownership and responsibility over routes, and discontinuing routes that are unprofitable and that a State does not want to fund.

During this phase-out, my Administration will repeal Amtrak’s monopoly on passenger rail service, allowing private companies to enter the market and provide passenger rail service where they see a viable commercial market.

This plan saves an estimated $12.6 BILLION USD over 10 years.

Steve Muehler is the Founder & Managing Member of the Private Placement Markets:

About Mr. Steve Muehler, Founder & Senior Managing Member:

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© 2017 by Mr. Steven J. Muehler