New Departures - Rethinking Passenger Rail Policy in the 21st Century by Anthony Perl 2002

Main Points:

With the maturation of the two dominant forms of American transportation, the airplane and automobile, the country is in a transportation crisis. Gridlock on our highways and in our urban areas, security issues and flight delays at our airports, and the end of cheap oil require that our nation bring balance to transportation by restoring its railroad network. In the 1950s, Americans were told that trains lacked the speed and flexibility of planes and cars, respectively. The railroad industry had been the dominant form of transportation for the previous 100 years and had taken its position in the marketplace for granted. This attitude only served as a catalyst for public policy to become affected by the false perception that trains were technologically obsolete. Consequently, substantial opportunities went unrealized for the development of passenger rail in America.

The author examines the policy stalemate constraining passenger rail opportunities since the 1950s. In 1958, the Eisenhower administration signed into law the Transportation Act, which came after pleas from money-losing railroad companies to be allowed to cut service. The Transportation Act shifted rail oversight responsibility from state regulatory boards to the newly fashioned federal Interstate Commerce Commission (ICC). Where previously the states had exercised their preservationist sympathies and had more control over their own jurisdictions, now the power was concentrated at the federal level of government. It did not help that Howard Hosmer, the ICC head, released a damning report that derailed the future of 20th-century train service by streamlining the process of discontinuing unprofitable routes. Indeed, from 1958 to 1971, a stunning 75% of 1939 passenger train mileage was cut from service. Before this, a significant share of freight rail traffic had been lost, removing a portion of revenue support that could have helped to bolster the railroad industry when passenger loads dropped off.

The coup de grâce was the 1971 Nixon administration’s answer to the rail conundrum, Amtrak, which cemented into place the dysfunctionality of American passenger rail public policy. Rather than including the states in a federal partnership to stimulate and privatize rail, the administration put on its denial-blinders by creating a quasi-public passenger rail company that would center any future blame for the possible demise of the industry on Amtrak leadership. Because Amtrak was set up with the mandate to operate as a “for-profit” organization, it was excluded from tax revenue trust funds that massively support automobile and aviation infrastructures, both of which are privately operated. This institutional isolationism foreclosed on policy options and benefits for Amtrak and contributed to the cycle of “policy creating politics”, especially in economic regulation, which has the effect of redistributing societal resources.

During the second half of the twentieth century, while the U.S.A. squandered its previously mighty passenger train network, other countries succeeded in expanding upon their rail networks by adding profitable high-speed rail (HSR) to their systems. The author cites France, Germany, and Japan, all developed nations with no disparity in automobile and airline dependency from America, which would otherwise excuse the U.S. for not keeping up with the times. These countries raised the bar by introducing profitable HSR amid very different political and policy dynamics across diverse geographic, economic, and social settings. Meanwhile, the states of Ohio, Texas, and Florida each tried and failed to develop their own intrastate HSR systems.

Though the specific causes for breakdown varied, each state shared the common deficiency of not producing a carrier – an actual railroad company – that would operate the HSR. The proponents and backers of HSR in those states were all working against heavy opposition, as were the people behind the new Denver International Airport, a recent example of a high-profile infrastructure project with an exceptionally remote location and an enormous price tag. Despite the negative elements of opinion, however, the new airport succeeded in becoming reality, largely because the main carriers, especially the airports primary tenant – United Airlines, were front-and-center in the battle to build the new airport.

The author writes that “all or nothing” change in contemporary rail policy has never happened and is not likely to in the future. But precipitous change can happen if serious effort is made to identify, evaluate, and especially, implement workable policy alternatives. Regional or state policy leadership could then create the opportunity for an entirely new carrier to enter inter-city passenger train service. This would then diffuse to other jurisdictions and go on to become embodied in national transportation policy. This snowball effect would start with the federal government’s facilitation of Amtrak’s privatization and subsequent franchising by enticing the private sector. This entailed the establishment of a commission charged with the organizational work of planning and administration, and would coordinate financial and legal aid.

This model of national railroad renewal is what the author calls “network franchising”. It represents a 180-degree difference from existing policy in that the country’s rail system would function and thrive under private ownership, yet, because of its public benefit, would operate on a publicly owned, operated, and financed infrastructure. This is exactly how the other two major modes of cars and planes operate today. A world-class passenger and freight rail system would bring about much-needed balance to America’s transportation matrix and, with essential policy adjustment, improve train offerings to passengers, taxpayers, and business partners.

II. Important and Interesting Points:

a) Political expediency and deception of the American public were at the heart of the Nixon administration’s creation of Amtrak in 1971. Rather than face a potentially long and contentious fight on Capitol Hill, the administration short-changed the long-term viability of the nation’s historically well-established passenger rail industry. Amtrak was meant to deny proponents of more radical approaches in the House the chance to control the policy agenda. Like a drug, it was used as a “policy block”; also like a drug, it was not a real remedy to the problem but only a pain reliever.

b) By forcing the states to cede their jurisdictional control of their share of the national rail network, and precluding their participation with the federal government in the administration of the train system, the national government effectively trumped the Constitution’s clause of states' reserved powers.

c) The passenger railroad industry can become the needed balance to America’s transportation matrix through the implementation of workable policy alternatives. Namely, the federal government can privatize the industry and affect profitability and strength through enticements that allow business innovation. This could occur at the regional or state level and diffuse to other jurisdictions and eventually become embodied in national transportation policy.

III. Objectivity of New Departures:

The author’s objectivity comes from his background as a political science professor in the examination of what is essentially a political subject. His book uses the “compare and contrast” style of writing that is conducive to understanding different public policy arenas and, by extension, the American political environment. Through research and a careful distillation of the successes and failures of contemporary rail innovations in France, Germany, and Japan, he further objectifies the American rail policy experience.

IV. Professional qualifications of the author:

Mr. Perl is a political science professor at the University of Calgary. He co-authored The Politics of Improving Urban Air Quality and has written extensively on environmental and transportation policies.