On March 27th, 1996, then Amtrak President Tom Downs addressed the National Press Club in Washington, D.C. The speech, which was carried on C-Span and National Public Radio, articulates his vision for the future of Amtrak. Following is the transcript of his remarks:
Thank you for this opportunity to talk with you about trains, transportation and the economic future they promise.
When I came to Amtrak two and one-half years ago, it was for me a culmination of many aspects of my past transportation experience - the opportunity to manage the national rail passenger system, the opportunity to elevate the importance of passenger trains on the country's transportation agenda, and the challenge to usher in an age of new technology that would introduce the trains of the future to a new generation of train riders.
Too often, people still view us as an investment in nostalgia, as if we were restoring steam locomotives to run excursion trains for fall foliage, when in reality, while we all love this business, we know the mot critical part of our future is high-tech capital investment that creates a new mode of transportation -- High-speed rail passenger service in America.
That is how I viewed my mandate. When I arrived, however, I found an organization that was, in many ways, on the ropes: costs were up, revenues were down, ridership was flat, the system needed capital improvement, Congress was impatient, and there was growing consensus that maybe we should just close the place down. A company dedicated to taking people from one place to another was itself stuck in the mud, mired in a dilemma about both its mission and its finances without much discussion about Amtrak's ultimate destination.
That was the challenge facing Amtrak in 1993. I knew that we had miles to go before it could become the passenger rail system of America's hopes. But even the experts did not recognize the depth of the crisis. While they took for granted that there would always be trains, it is no exaggeration to say that as recently as two years ago there was a very real possibility that Amtrak would fold -- that we would sell off the equipment, take our losses, and leave the passenger rail business to the few local commuter carriers operating in the corridors of our biggest cities. In other words, that there would no longer be a national network of passenger rail.
It is also fair to say that internally and externally people were doubting whether or not there was actually any future for passenger rail service.
It became apparent that we had to take some drastic actions. In 1993 we started down the road of recovery, knowing that it would be a long and sometimes tortured adventure -- but that it was a trip we had to take. And in some ways, those of us who participated in the Antrak turn-around actually relished the fight -- because we knew it could be done and what the rewards would be. We believed that for Amtrak, as Robert Louis Stevenson said, it would be "a better thing to travel hopefully than to arrive."
Amtrak has been travelling hopefully for two years now, and I am happy to be able to tell you that after restructuring and belt-tightening -- including reducing service by 16 percent -- Amtrak is back, on solid footing, and ready to herald in a new and exciting era of American travel, both long-distance trains and high-speed, for the next century. The timing could not be better. The country is ready for expanded passenger rail service, and Amtrak is poised to meet the need.
The Amtrak of today already provides a vital transportation link for millions of Americans. We currently serve more than 500 communities and provide about 55 million trips each year somewhere in America. Although many of you may think of Amtrak as the train for the Northeast Corridor, we have a nationwide rail system sprawling, from east to west, north to south, linking cities, reaching rural areas, serving commuters and vacationers alike. If we were an airline we would be the third largest carrier in the United States. We serve the heartland of America -- places like Meridian, Mississippi and Havre, Montana and that is where our strength is. In many of those communities there is often no air service and only minimal bus service.
What's more, passenger rail offers the entire nation -- not just its riders -- a cornucopia of benefits over highway and air travel: much greater energy efficiency, less air pollution and dependence on oil, less congestion on our highways and at our airports, and we use less land. It is, in other words, and invaluable and essential part of the transportation network that serves all Americans -- and one, I argue, that we cannot afford to lose.
That is why the American public has a stake in the future of Amtrak, and it is why there needs to be a continued capital investment in passenger rail on the part of the federal government. Currently, Congress provides less than 20 percent of our operating costs. By comparison, in 1981, 52 percent of our operating budget came from Congress. That decrease in federal dollars in no accident. Amtrak is on a glide path that has steadily decreased federal operating subsidies annually with the goal of being subsidy-free by the year 2002.
At the same time, we are building a new company -- the new Amtrak -- that is customer-driven, competitive and ready to meet America's travel needs in the next century. A crucial aspect of our future will be the introduction of highspeed rail, the first ever for the United States. Earlier this month, we announced that Amtrak has contracted with a private consortium, led by Bombardier, Inc., to build a fleet of 18 high-speed electric-powered trainsets that will be able to carry millions of rail customers between Washington and Boston at speeds of up to 150 mph. These new trainsets, which will be in service starting in 1999, will be revolutionize transportation on the East Coast, and serve as a model for similar high-speed travel throughout the country. The model also includes the private sector providing $611 million of the $720 million cost of this investment. That is the private sector's way of betting on our future with its checkbook.
These developments come at a time when the economics of public transportation in general indicate that passenger rail will eventually meet an expanding share of the nation's transportation needs. The mobility of all Americans -- the right and opportunity to travel -- is in jeopardy on the road and in the air. The fact is, we cannot afford to build more highway capacity. The last stretch of interstate, 13 miles built outside down-town Los Angeles, cost nearly $800 million dollars per mile to build. And to what end? Our current transportation policy encourages the most fuel inefficient modes of transportation. Americans have lost sight of the fact that we have a finite supply of energy. And, while it is relatively inexpensive now, it will inevitably become more expensive. Meanwhile, car sales have dropped steadily in the past ten years, and indication that more people are opting for the convenience of public transportation where it's available.
Similarly, we will not see another major airport built in a generation. The Denver airport, crippled by billions in cost overruns, will likely be the last air facility the federal government makes for a long time. They are simply too expensive. They drive the cost of an airline ticket so high that it becomes prohibitive for average Americans.
As plane travel becomes less accessible and automobile travel more difficult, train travel is becoming the mode of choice -- whether for business or pleasure. Passengers on our trains are finding a new product. We are completely modernizing our fleet to provide train travel that caters to the needs of vacationing families and passengers who want to see America in comfort and ease. Our new high-speed rail trains offer an escape from road congestion and the frustrations of air travel, while providing comfort, leisure and a faster total trip.
Trains are back, but to complete the transition to train travel we need the capital investment that will allow us to bring Amtrak into the future. It is crucial. It is critical to our survival. Without capitalization it is safe to predict that once again passenger rail will face another near death experience in the nest several years.
Some critics might argue that if rail travel is so invaluable, it shouldn't need financial support from the federal government. It should stand on its own as a private corporation, goes the argument, like General Motors, and American Airlines and other transportation entities.
That argument is wrong for two basic reasons:
First, every transportation mode receives support from federal and state government. And they should, because the nation's transportation needs are a concern to everyone, not just those who\ho utilize public transportation. Congress invest billions annually to ensure the nation's mobility -- through construction and maintenance of highways, the air traffic control system, airport financing, and even the dredging of harbors. If we are to be a full partner in the American transportation system, providing the choices Americans expect, we have to be treated like other modes of transportation and have access to dependable capital.
The second reason for federal investment is that we need to make up for years of disinvestment and under-capitalization that almost destroyed passenger rail 25 years ago. Allow me a little divergence about the history of trains in America.
There was a time in our history when trains were the dominant way to get from place to place. By 1890, for example, more than 90 percent of all transportation -- people and freight -- rode the railroad. Back then, Americans took an estimated 2 billion trips a year on the rails, including riders on those new-fangled urban inventions, the trolley car.
You may also know that at the time governments -- federal, state and local -- subsidized train travel amply, including massive land grants. But beginning at the turn of the century, with the introduction of the automobile, transportation policy in the United States changed dramatically. By 1930, more than half of all American families had a car. to oblige them, Congress created what has become our great network of federal and state highways and roads -- the most expansive in the world.
The pattern of rail neglect continued on through the 1960's and it was so severe that passenger rail -- then largely a private enterprise -- had a near-death experience. The freight railroads lost over $1.4 billion in the last year they operated passenger trains. Amtrak, in fact, was created precisely because private industry had all but abandoned rail passenger service -- finding it more lucrative to move freight than people and finding the cost of simple upkeep was prohibitive. By the late sixties, private passenger rail service was collectively bankrupt.
In 1970, a concerned Congress, with the support of then President Nixon, stepped in and established Amtrak. The corporation was created to preserve a network of passenger rail by consolidation rail passenger service nationwide. Nixon said at the time that it was "in the national interest to be enabling -- indeed encouraging -- our people to choose a train."
From its early days until the present, there was always the expectation that federal support for the railroad would be temporary -- that Amtrak's goal was to be able to stand on its own financially. But in the meantime Congress would keep the trains rolling. In other words, government operating subsidies would serve as the linchpin between the demise of privatized passenger rail in the 1960's and the privately-run customer-focused trains of the 1990's.
Although it did not happen as soon as some might have wanted, Amtrak has never lost sight of that goal in its 25 years in operation. Now, that goal is within our grasp. I think it is safe to say that healthy economics are starting to come our way. And our dedication to cost and quality internally is part of a framework for successful high-speed rail service. It is also inconceivable that this country would abandon rail passenger service at what I think is the dawn of a renaissance in rail passenger service that has been experienced by almost every major industrial country in the world. Germany, France, Japan, even South Korea are all making billions of dollars worth of investment to rail passenger service. They are not doing it for nostalgia; they're doing it because it is an essential investment in their national transportation systems for economic utility. We haven't got there yet. We still don't recognize it. But we must.
We are on a glide path, however. We will eliminate the need for operating subsidies over the next five years -- without massive disruptions in service.
To make our plan work, we -- like other enterprises -- need some help from Congress. But unlike some others, we are not asking anyone to increase taxes to help us. For the past year, we have tried to convince Congress that Amtrak's long-term viability depends on capital investment. This is an existing tax; it is not a new one. It is part of the Transportation Trust Fund in as account that has about a $9 billion balance. To that end,m our allies in the House and Senate have proposed taking one-half cent of the federal gasoline tax to support capital improvements for Amtrak. That capital account would insure our future, free us from operating subsidies, and guarantee a set of choice in transportation for another generation of Americans
The first thing we need is the ability of states to make choices about how they spend federal transportation dollars. Right now, governors can spend surface transportation dollars with some degree of flexibility. They can spend it for transit. They can spend it for highway safety. They can spend it for bike trails. They can spend it for historic preservation. But they cannot spend a dime of it for Amtrak use. It is one of the few prohibitions about flexibility that exists in federal law.
The second element necessary for Amtrak's survival is consistent with the effort of many today to shift back authority to states. It is a proposal we call state flexibility. We believe governors should have the option, should they choose to do so, to spend federal transportation dollars as they see fit, including on Amtrak. Already, Amtrak has negotiated agreements with eight governors -- four Democratic, four Republican -- to create partnerships for continued rail service in their communities with regular state funds. We hope to do more. The flexibility provision would help us develop more of those relationships.
These are exciting times at Amtrak -- not simply because of the coming of high-speed rail, but because after many hard months of work we are confident that Amtrak is ready to assume a much greater and more expansive role in the national transportation system. We are equal to the challenge, evermindful of the need to ensure that as we grow and change, we keep our commitment to quality and that our safety record and customer service are ever improving.
I invite you to ride along with us some time -- to see what we mean when we say it's a new Amtrak and a new mode of transportation. With the experience, you may come to appreciate that passenger rail is not simply the legacy of a glorious past, nor only an affordable and safe way to travel the country today. We stand ready to carry America into the 21st century and beyond -- confident that passenger rail -- and Amtrak -- are equal to the challenge of meeting the demands and needs of our diverse and mobile nation.
Come aboard -- all aboard on Amtrak.
