AMTRAK POLICY QUESTION
Background:
On September 11,
2001; two
airplanes were hijacked and crashed into the twin towers in New York
City. As a
result, all airports were shut down for 4 days to restructure and
evaluate
security measures. Stranded travelers, especially in the northeastern
U.S.,
relied heavily on railways during this period.
A related issue is
sky-rocketing energy prices. As crude oil prices exceed $60/barrel,
highway
transportation is quickly becoming tremendously more expensive with
gasoline
prices topping $3/gallon in some places.
Fuel prices are also raising the cost of air travel, and pushing
several
of the largest airlines closer to bankruptcy.
In October, 1970,
in an
attempt to revive passenger rail service, congress passed the Rail
Passenger
Service Act. That Act created Amtrak, a private company which, on May
1, 1971
began managing a nation-wide rail system dedicated to passenger service.
AMTRAK has not been
able to completely
cover its own costs through ticket prices, let alone make a profit,
since its
creation and has relied heavily on government subsidy to continue to
operate. They offer passenger service
between major US
cities. In comparison to air travel, AMTRAK is more expensive and a
trip takes
much more time.
This fall, the
issue of the AMTRAK
subsidy is likely to come up in Congress again.
There is an on-going debate about whether the US should keep
paying this
great cost of a rail network, or whether it should be restructured or
privatized somehow.
Your
Client:
You have been
invited to
submit an analysis to the members of the Senate Committee on Commerce,
Science,
and Transportation as a private consulting team from the Brookings
Institution,
a policy think tank. Your mission, should you choose to accept it, is
to provide
your client with an independent analysis of options for restructuring
AMTRAK to
be presented to Congress during budget debates.
Your respected opinion as a policy analyst will be referenced in
debating whether a national rail network is a benefit to our nation.
The
Question:
Is it in the public
interest
that AMTRAK continue to be subsidized by the federal government? Do the
benefits of the program justify the cost? Is a national train network a
viable
option as a complement to US air travel? Should the government continue
to
`float' AMTRAK in order to provide an alternative to air travel? Should
airline
subsidies be diverted to a train network, or train subsidies to the
airlines?
In other words, what balance should the US have between modes of
travel, and
what role does the government play in deciding that balance?
Additional
information to get started: