Letter to the Joint Select Committee on Deficit Reduction

Text of the Association’s letter to the Joint Select Committee on Deficit Reduction – October 13, 2011

Our Association belongs to the OneRail Coalition, a group of public and private sector rail stakeholders. This Coalition’s letter to you stated, in part, “it is also important to make public investments in America’s passenger rail infrastructure and operations. These investments will produce benefits for America’s people and economy – for example, even with limited investment, Amtrak is on pace to set an all‐time ridership record this year, and commuter railroads and rail transit agencies will provide more than 4.5 billion passenger trips this year.”

William Lind, of The American Conservative’s Center for Public Transportation, quoted Adam Smith to reinforce the importance and appropriateness of public investment in transportation [our emphasis]:

According to the system of natural liberty, the sovereign has only three duties to attend to . . . First, the duty of protecting the society from violence and invasion . . . secondly, the duty of protecting, as far as possible, every member of society from the injustice or oppression of every other member of it . . . and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit would never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.

Adam Smith goes on to discuss transportation infrastructure at some length. In his day, that meant roads, canals, and bridges. The US clearly has embraced this concept when it comes to roads. Indeed, highway users pay far below the costs they occasion. Gasoline taxes at this point cover only a small portion of system costs. Tolls tied to use of specific highways usually are set far below what free market private enterprise would charge.

The key purposes for intercity passenger rail investment are:

1. To support economic development by providing new transportation capacity needed for a growing population and to provide good jobs for the men and women who create that capacity;
   
2. To strengthen the international competitiveness of the U.S.;
   
3. To enhance national security by reducing our reliance on imported energy; and
   
4. To enhance quality of life in the U.S. by giving travelers a meaningful choice that lets them avoid congestion on other forms of transportation and use the method of travel with the most benign overall environmental impact.

The U.S. population is expected to grow by 127 million or 41% by 2050. Migration will be heavily to America’s cities. If the nation attempts to handle the resulting increase in transportation demand by continuing to concentrate investment in new transportation capacity almost exclusively on highways and aviation, the country will grind to a halt, literally. That is even before considering the extent to which the long-term run-up in oil costs impacts our aviation and automobile systems. Moreover, the increasingly global business community will show a growing bias towards nations which recognize the importance of rail development.

To the extent that U.S. public policy already allows it, citizens already are showing their interest in change. In the fiscal year just concluded, Amtrak ridership exceeded 30 million for the first year in its history. In Washington and many other urban areas, property values are strongest in the near suburbs where transit choices are the most plentiful and weakest in the “exurbs” where long auto trips are unavoidable. For several years, demand for “smart growth” housing that is transit- and pedestrian friendly has far outstripped supply.

Note that “to be profitable” is not on the list of key purposes. Yet Amtrak, after over 40 years of operation, is still labeled a failure by critics because it is not “profitable.” Amtrak and high speed rail must be well-managed and efficient, but “profitable” is not a reasonable objective, at least in the near future. Operational losses should not blind the nation to the fact that rail is the most cost effective way to provide the additional capacity required by a growing population and economy at affordable cost. As the OneRail Coalition put it, “Rail is safe, productive, efficient, environmentally sustainable, and promotes energy independence. This investment will spur both near-term and long-term economic recovery and is crucial to ensuring America’s economic prosperity. And with historically low interest rates, close to one million unemployed construction workers, and a competitive bidding market, investing now will allow us to extract the maximum value from our finite resources.”