For Immediate Release April 29, 2011

Contact:  Leslie K. Paige 202-467-5334 Luke Gelber 202-467-5318

CAGW Issues Spending Cut of the Week: Amtrak

Today, Citizens Against Government Waste (CAGW) issued its weekly spending cut alert aimed at the National Railroad Passenger Corporation, better known as Amtrak. The company, whose preferred stock is owned exclusively by the federal government, has never made a profit, despite receiving $37 billion in subsidies since its inception in 1971. In 2008, Amtrak lost money on 41 of its 44 routes, equal to $.11 per passenger mile. Sunday, May 1, 2011 marks the 40th anniversary of Amtrak’s reign as the most wasteful government scheme on two rails.

“Amtrak is one of the worst boondoggles in history,” said CAGW President Tom Schatz. “A cursory glance at its operations reveals a staggering level of inefficiency and mismanagement. Even the worst-performing routes – such as the ‘California Zephyr,’ which whisks passengers from Chicago to San Francisco in a blistering 51 hours at a loss to Amtrak of $168.48 per passenger; and the ‘Sunset Limited,’ with service (to use the term loosely) from New Orleans to Los Angeles in 48 hours at a loss of $462 per passenger, have not been shut down.

“Despite its ample subsidies, Amtrak has utterly failed in its mission to provide a service for which consumers are willing to pay. Amtrak carries about 28 million passengers annually, but that figure amounts to less than one percent of the country’s total intercity passenger miles traveled each year. Airplanes, buses, and cars represent dramatically cheaper, faster, and more flexible inter-city travel options.

“Right now, booking just a month in advance, it is possible to buy a round-trip plane ticket from New Orleans to Los Angeles and back for less than Amtrak loses per passenger on a one-way trip between those same locations. Bungling of this magnitude would be laughable if someone other than taxpayers were on the hook for it all. When Amtrak is gone, its sole contribution may have been to prove beyond all doubt that, as the Grace Commission noted in 1984, ‘The government’s business is not to be in business.’”

Eliminating Amtrak’s federal funding, which has been among the spending cuts advocated by CAGW in its Prime Cuts database since 1994, would save taxpayers $2.8 billion in one year and $14 billion over five years. Prime Cuts is a compendium of 763 waste-cutting recommendations that would save taxpayers $350 billion in the first year and $2.2 trillion over five years.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.