The Public Purpose
Number 49 - 25 June 2002

Juvenile Logic:
Senators Torticelli and Schumer on Amtrak

Yesterday, Senator Robert Torticelli of New Jersey and Senator Charles Schumer of New York suggested that Amtrak subsidies were justified by the fact that the federal government subsidizes highways and the air system. It doesn't, and the Senators are either disingenuous or exhibiting a childish misunderstanding of the facts. There is an important semantic difference between a subsidy and a user fee. A subsidy occurs when people who do not use a service pay for it. User fees are charged to people who use a service, and in the case of federal gasoline taxes, most of the money is used to pay for intercity highways. In fact, in addition to paying for the nation's roads, highway users pay a nearly 20 percent premium on their gasoline taxes to subsidize mass transit, which carries barely one percent of the nation' travel Similarly, the air system is paid for by user fees, not taxes.

Yes, there was a special financial aid program for airlines to compensate for 9-11 service interruption losses, just as there was special assistance for the 9-11 damaged New York subway and just as flood relief is provided to flood victims. Had Amtrak been victimized by 9-11, it would be entitled to disaster aid. The damage that has been suffered by Amtrak has been self imposed, by five years of mismanagement and derelict board oversight.

The bottom line is this: If you don't use the nation's air system you don't pay. If you don't use the nation's highways you don't pay. But if you don't use Amtrak, you pay.

In fact, it would take $1 trillion annually to provide the same level of subsidy per mile to auto users as Amtrak receives. That is more than one-half of the federal budget. It would take $110 billion to subsidize air users at the same rate as Amtrak passengers. Compare this to the less than $50 billion that the nation spends every years, mind you out of user fees, on the nation's highways and air system. The nation deserves a higher standard of discourse.

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