GOP Proposal to Privatize the Northeast Corridor Meets Resistance

House Republicans, led by Transportation Committee leaders John Mica (R-FL) and Bill Schuster (R-PA), have a plan to take the Northeast Corridor out of Amtrak’s control and privatize it. They’ve long called Amtrak a “Soviet-style operation” that loses money.

Mica said that ridership of the NEC hasn’t changed since 1977, the year after Amtrak took over the corridor: a record he calls “one of the most dismal on earth.” [PDF] Amtrak advocates contend that chronic underfunding has starved the system, creating a situation that would make world-class service impossible. They also point to record ridership system-wide in seven of the past eight years, mostly due to the increase in state-supported service. (Representatives from Amtrak would have spoken on behalf of the railroad but were not invited to testify.)

The Mica/Shuster plan would separate the Northeast Corridor from Amtrak and transfer it to USDOT initially, then spin it off as a separate business unit. A competitive bidding process would determine who takes over the title. That entity would have to establish high-speed service from Washington to New York that takes under two hours (doing it in 15 years, not 30, as Amtrak proposed) while reducing or eliminating federal subsidies. They plan to include this proposal as part of the surface transportation reauthorization bill.

Mica and Schuster stress that organized labor would keep all its protections and that the plan would boost employment, but unions are having none of it. Edward Wytkind, president of the AFL-CIO’s Transportation Trades Department, said Amtrak’s 30-year plan for high-speed rail includes all the private sector participation it needs. “There is no high-speed passenger rail system in the world that operates without significant government assistance,” he said. “Private sector companies simply cannot make a profit without federal support.”

He said private entities taking over the most profitable part of Amtrak’s system would “let the rest of the system wither” and he simply didn’t see what the country would be getting in return for this valuable transportation asset.

Wytkind reminded members of Congress that when Amtrak took over the NEC in 1976, it was because the private company that had been running it had gone bankrupt and no one else wanted it.