A REVIEW OF AMTRAK OPERATIONS, PART III: EXAMINING 41 YEARS OF TAXPAYER SUBSIDIES (112–107) HEARING BEFORE THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE HOUSE OF REPRESENTATIVES ONE HUNDRED TWELFTH CONGRESS SECOND SESSION SEPTEMBER 20, 2012 Printed for the use of the Committee on Transportation and Infrastructure ( Available online at: http://www.gpo.gov/fdsys/browse/ committee.action?chamber=house&committee=transportation U.S. GOVERNMENT PRINTING OFFICE 76–148 PDF WASHINGTON : 2013 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Aug 31 2005 13:41 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 P:\HEARINGS\112\FULL\9-20-1~1\76148.TXT JEAN COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE JOHN L. MICA, Florida, Chairman DON YOUNG, Alaska NICK J. RAHALL II, West Virginia THOMAS E. PETRI, Wisconsin PETER A. DEFAZIO, Oregon HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois JOHN J. DUNCAN, JR., Tennessee ELEANOR HOLMES NORTON, District of FRANK A. LOBIONDO, New Jersey Columbia GARY G. MILLER, California JERROLD NADLER, New York TIMOTHY V. JOHNSON, Illinois CORRINE BROWN, Florida SAM GRAVES, Missouri BOB FILNER, California BILL SHUSTER, Pennsylvania EDDIE BERNICE JOHNSON, Texas SHELLEY MOORE CAPITO, West Virginia ELIJAH E. CUMMINGS, Maryland JEAN SCHMIDT, Ohio LEONARD L. BOSWELL, Iowa CANDICE S. MILLER, Michigan TIM HOLDEN, Pennsylvania DUNCAN HUNTER, California RICK LARSEN, Washington ANDY HARRIS, Maryland MICHAEL E. CAPUANO, Massachusetts ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas TIMOTHY H. BISHOP, New York JAIME HERRERA BEUTLER, Washington MICHAEL H. MICHAUD, Maine RANDY HULTGREN, Illinois RUSS CARNAHAN, Missouri LOU BARLETTA, Pennsylvania GRACE F. NAPOLITANO, California CHIP CRAVAACK, Minnesota DANIEL LIPINSKI, Illinois BLAKE FARENTHOLD, Texas MAZIE K. HIRONO, Hawaii LARRY BUCSHON, Indiana JASON ALTMIRE, Pennsylvania BILLY LONG, Missouri TIMOTHY J. WALZ, Minnesota BOB GIBBS, Ohio HEATH SHULER, North Carolina PATRICK MEEHAN, Pennsylvania STEVE COHEN, Tennessee RICHARD L. HANNA, New York LAURA RICHARDSON, California JEFFREY M. LANDRY, Louisiana ALBIO SIRES, New Jersey STEVE SOUTHERLAND II, Florida DONNA F. EDWARDS, Maryland JEFF DENHAM, California JAMES LANKFORD, Oklahoma REID J. RIBBLE, Wisconsin CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, Tennessee VACANCY (II) VerDate Aug 31 2005 13:41 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 P:\HEARINGS\112\FULL\9-20-1~1\76148.TXT JEAN CONTENTS Page Summary of Subject Matter .................................................................................... iv TESTIMONY Joseph H. Boardman, President and Chief Executive Officer, Amtrak .............. 28 Ted Alves, Inspector General, Amtrak Office of Inspector General 28 Peter J. Pantuso, President and Chief Executive Officer, American Bus Asso- ciation .................................................................................................................... 28 Randal O’Toole, Senior Fellow, Cato Institute ...................................................... 28 Ross B. Capon, President and Chief Executive Officer, National Association of Railroad Passengers ......................................................................................... 28 PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS Hon. Peter A. DeFazio, of Oregon .......................................................................... 51 Hon. Eddie Bernice Johnson, of Texas ................................................................... 54 PREPARED STATEMENTS SUBMITTED BY WITNESSES Joseph H. Boardman ............................................................................................... 56 Ted Alves .................................................................................................................. 70 Peter J. Pantuso ...................................................................................................... 81 ‘‘Federal Subsidies for Passenger Transportation, 1960–2009,’’ Robert Damuth, Economist and Principal Consultant, Nathan Associates Inc., March 2, 2011 ................................................................................................ 88 ‘‘Economic Impact of the Motorcoach Tour and Travel Industry,’’ Amer- ican Bus Association Foundation ................................................................. 118 ‘‘Motorcoach Census 2011,’’ prepared for the American Bus Association Foundation by John Dunham & Associates, June 18, 2012 ...................... 119 Randal O’Toole ......................................................................................................... 134 Ross B. Capon .......................................................................................................... 143 SUBMISSIONS FOR THE RECORD Slides referenced during the hearing by Hon. John L. Mica, a Representative in Congress from the State of Florida and Chairman, Committee on Trans- portation and Infrastructure............................................................... 3, 5, 7, 9, 11, 13 Joseph H. Boardman, President and Chief Executive Officer, Amtrak: Responses to questions from Hon. Bill Shuster, a Representative in Congress from the State of Pennsylvania ....................................... 62 Responses to questions from Hon. Corrine Brown, a Representative in Congress from the State of Florida .................................................. 64 Response to question from Committee on Transportation and Infra- structure, Minority ................................................................................ 69 Ted Alves, Inspector General, Amtrak Office of Inspector General, responses to questions from Hon. Corrine Brown .............................................................. 78 Peter J. Pantuso, President and Chief Executive Officer, American Bus Asso- ciation, responses to questions from Hon. Corrine Brown ................................ 130 Ross B. Capon, President and Chief Executive Officer, National Association of Railroad Passengers, responses to questions from Hon. Corrine Brown .... 151 (III) VerDate Aug 31 2005 13:41 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 P:\HEARINGS\112\FULL\9-20-1~1\76148.TXT JEAN iv It.@!. )fauSt nHltprtlitntatfUtli ~ommitttc on ~ram~portation anb lInfrastrutturc Job» ,1.. JIlico \!ruitllspington, Ill! 20515 j1ich Jf. l\aboU, 3HI Q;;bairman ll\anting JIlember JamesW.Co"nI1,ChiefofStaff September 17, 2012 Jnmes H. Zoia, ~rnocmt Cl1ieicfStaff MEMORANDUM TO: Members, Committee on Transportatioll.and Infrastructure FROM: Staff; Committee on Transportation and Infrastructure SUBJECT: Oversight Hearing on "A Review of Amtrak Operations, Part III: Examining 41 Years of Taxpayer Subsidies" PURPOSE 111 The Committee on Transportation and Infrastmcture will meet on Thursday, September 20 , 2012, at 9:30 a.m. to receive testimony reviewing Amtrak's 41 years oftaxpayer subsidies. SpecificaJly, the healing will investigate the monetary losses associated with Amtrak's operations; explore and compare Amtrak's level of federal subsidy with the subsidies provided to other modes of passenger transportation; and examine management deficiencies identified by the Amtrak Office of Inspector General in reviewing Amtrak's food and beverage operations and significant overtime expenses. BACKGROUND The Rail Passenger Service Act of 1970 (P.L. 91-518) created the National Raih'oad Passenger Corporation (Amtrak) and charged it with the responsibility for pro,iding intercity passenger rail transportation on a basic route system designated by the Department of Transportation, Before Amtrak's creation, freight rail companies were required by federal law to operate passenger rail services. Amtrak was designed to serve long-distance passenger travel needs and is operated as a for-profit company, rather than a public authority.' , See 49 U,S.c. §§24301, 24302, VerDate Aug 31 2005 13:41 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00004 Fmt 6602 Sfmt 6602 P:\HEARINGS\112\FULL\9-20-1~1\76148.TXT JEAN Insert offset folio 1 here 76148.001 v 41 Years a/Taxpayer Subsidy Ftmding for Amtrak's capital and operating expenses comes from operational revenues and appropriated funds. Amtrak's operations have never resulted in a net profit with most of its routes losing money. The system as a whole only accounts for 0.1 percent of America's passenger !rave\.2 Over the past 41 years, Amtrak has received nearly $40 billion dollars taxpayer subsidies. The following chart illustrates Amtrak's taxpayer funding since its creation: * .$1.3 billion in capital funds appropriatedfor Amtrak in the American Recovery and ReinvestmentAct 0/2009. Source - Federall?ailroad Administration The average per passenger subsidy for Amtrak in 2011 was more than $49, as derived by dividing the total number of passengers by the total amount of federal appropriations. Over the past five years, Amtrak has averaged an annual taxpayer subsidy of more than $1.432 billion, which equates to an average subsidy of nearly $51 dollars per passenger. 2 Randal O'Toole, Gridlock: Whv We're Stuck in Traffic and Wha/to Do About II (Washington: Cato Institute. 2009), p. 9J. VerDate Aug 31 2005 13:41 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00005 Fmt 6602 Sfmt 6602 P:\HEARINGS\112\FULL\9-20-1~1\76148.TXT JEAN Insert offset folio 2 here 76148.002 vi Even without considering the almost $1 billion per year in capital grants to Amtrak,