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UNDERSTANDING THE COST DRIVERS OF 

PASSENGER RAIL 

(113–17) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

RAILROADS, PIPELINES, AND 

HAZARDOUS MATERIALS 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

MAY 21, 2013 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

TREY RADEL, Florida 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

VACANCY 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

JEFF DENHAM, California, Chairman 

JOHN J. DUNCAN, JR., Tennessee 

JOHN L. MICA, Florida 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

LOU BARLETTA, Pennsylvania 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York, Vice Chair 

DANIEL WEBSTER, Florida 

THOMAS MASSIE, Kentucky 

ROGER WILLIAMS, Texas 

TREY RADEL, Florida 

SCOTT PERRY, Pennsylvania 

BILL SHUSTER, Pennsylvania (Ex Officio) 

CORRINE BROWN, Florida 

DANIEL LIPINSKI, Illinois 

JERROLD NADLER, New York 

ELIJAH E. CUMMINGS, Maryland 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

TIMOTHY J. WALZ, Minnesota 

ALBIO SIRES, New Jersey 

ELIZABETH H. ESTY, Connecticut 

PETER A. DEFAZIO, Oregon 

MICHAEL E. CAPUANO, Massachusetts 

STEVE COHEN, Tennessee 

DINA TITUS, Nevada 

NICK J. RAHALL, II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

Robert Puentes, Senior Fellow and Director of the Metropolitan Policy Program, Brookings Institution ................................................................................ 4 

Hon. Joseph H. Boardman, President and Chief Executive Officer, Amtrak ..... 4 

David B. Kutrosky, Managing Director, Capitol Corridor Joint Powers Authority .......................................................................................................................... 4

Ross B. Capon, President and Chief Executive Officer, National Association 

of Railroad Passengers ......................................................................................... 4 

PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE 

RECORD SUBMITTED BY WITNESSES 

Robert Puentes: 

Prepared statement .......................................................................................... 30 

Answers to questions from the following Representatives: 

Hon. Jeff Denham, of California ..............................................................43–44 

Hon. Corrine Brown, of Florida ................................................................43–44 

Hon. Joseph H. Boardman: 

Prepared statement .......................................................................................... 46 

Answers to questions from the following Representatives: 

Hon. Jeff Denham, of California .............................................................. 58 

Hon. John L. Mica, of Florida .................................................................. 59 

Hon. Michael H. Michaud, of Maine ........................................................ 61 

Hon. Corrine Brown, of Florida ................................................................ 62 

David B. Kutrosky: 

Prepared statement .......................................................................................... 66 

Answers to questions from the following Representatives: 

Hon. Jeff Denham, of California .............................................................. 74 

Hon. Michael H. Michaud, of Maine ........................................................ 74 

Hon. Corrine Brown, of Florida ................................................................ 75 

Ross B. Capon: 

Prepared statement .......................................................................................... 78 

Answers to questions from the following Representatives: 

Hon. Jeff Denham, of California .............................................................. 88 

Hon. Corrine Brown, of Florida ................................................................ 92 

Supplementary information ...................................................................... 95 

SUBMISSION FOR THE RECORD 

Hon. Richard L. Hanna, a Representative in Congress from the State of 

New York, submission of chart that lists long-distance transportation costs 

per passenger and auto train losses ................................................................... 25 

ADDITION TO THE RECORD 

Hon. Michael H. Michaud, a Representative in Congress from the State 

of Maine, submission of letter and supporting documents from Patricia 

Quinn, Chair, States for Passenger Rail Coalition, regarding the Passenger 

Rail Investment and Improvement Act, Section 209, April 25, 2013 .............. 105 

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Insert offset folio 4 here 81149.004
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(1) 

UNDERSTANDING THE COST DRIVERS OF 

PASSENGER RAIL 

TUESDAY, MAY 21, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON RAILROADS, PIPELINES, AND

HAZARDOUS MATERIALS, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 1:17 p.m., in Room 

2167, Rayburn House Office Building, Hon. Jeff Denham (Chairman of the subcommittee) presiding. 

Mr. DENHAM. The subcommittee will come to order. First let me 

welcome our distinguished witnesses and thank them for their testimony today. Some frequent attendees. 

This hearing is another step towards the committee’s bipartisan 

efforts to complete a Rail Reauthorization bill this year. 

One of the key goals of the current Passenger Rail Investment 

and Improvement Act was to seek cost efficiencies and savings in 

Amtrak’s operations. Since the enactment of PRIIA in 2008, Amtrak has achieved notable improvements in its financial condition. 

On the Northeast Corridor, Amtrak earns a substantial ‘‘above 

the rail’’ operating profit, and with the introduction of the Acela, 

Amtrak has captured 75 percent of the Washington to New York 

rail to air market. Amtrak has also seen significant ridership increases on its State-supported routes, which connect metropolitan 

areas less than 750 miles apart. In many ways, these are the 

routes where rail makes sense—connecting densely populated areas 

where rail trip times are competitive with air and automobile options. 

PRIIA included an important change to this part of Amtrak’s 

business by requiring the States to contribute more to maintain 

services. We look forward to hearing how that process is going with 

our witnesses today. 

The one area that PRIIA, and indeed multiple rail bills, have not 

seen success is improving the financial performance of the long-distance routes. Year after year these routes lose money. In 2012, they 

lost a combined $600 million. We simply cannot afford to continue 

these levels of subsidized losses year after year. 

PRIIA requires Amtrak to develop and post on its Web site performance improvement plans for its long-distance passenger routes 

and implement those plans for its worst performing routes. This all 

was supposed to be done by 2012. However, as we all know, long 

distance has been losing more and more since PRIIA became law. 

2 

To illustrate, since PRIIA became law the NEC has increased its 

profits by 143 percent, State-supported routes have reduced their 

losses by 24 percent, while long-distance routes have increased 

their losses by 11 percent. It is clear that FRA and Amtrak did not 

follow PRIIA’s intent to reduce long-distance costs, so it is up to us 

on this committee to find better solutions. 

Finally, Amtrak’s labor force is by far the largest component of 

the company’s overall cost, and Amtrak is currently negotiating collective bargaining agreements through 2015. It is important for 

this committee to understand how Amtrak management and personnel decisions affect the full cost of rail service and if any efficiencies can be found to reduce the overall cost for providing passenger rail service across the country. 

Again, I want to thank the witnesses for being here today. We 

are open to all suggestions, and look forward to hearing from your 

testimony today. 

I would now like to recognize the ranking member, Corinne 

Brown from Florida, for 5 minutes to make any opening statement 

she may have. 

Ms. BROWN. Well, thank you, Mr. Chairman, for holding this 

hearing. As the committee prepares for reauthorization of the Passenger Rail Investment and Improvement Act, I think it is important that we take time to better understand Amtrak and how it operates. 

As our Nation’s transportation infrastructure falls further and 

further into disrepair, we are focused on terminating our country’s 

national rail system while cutting off the only public transportation 

system available to many Americans. 

Without Amtrak’s long-distance service, 23 States and 223 communities—that is about 4.7 million people, including some in my 

home State of Florida—would have no access to intercity passenger 

rail, many of which are not served by air or bus service as we 

speak. As some Members advocate for dismantling long-distance 

rail service, I think it is critical that we put Amtrak service and 

the subsidies it receives into perspective. 

Amtrak, like many companies, has room for improvement. But it 

has made great progress in improving its business model and service. For example, Amtrak has: 

Increased ridership in 9 of the last 10 years; 

Reduced its requests for Federal operating subsidies; 

Reduced its debt to less than 1.7 in 2012; increased its revenue 

by 42 percent, from $1.9 billion to $2.7 billion in 2012, including 

an operating profit in the Northeast Corridor of $288 million; 

Increased its shares in the travel market in the Northeast Corridor by 77 percent, Washington, DC, and New York by 54 percent, 

and between New York City and Boston; 

Improved—this is really interesting—its credit rating in the last 

2 years to the equivalent of A-plus, the highest rating by Moody’s 

in the history of the company—that is an A; 

Received clear audit opinions in each of the past 10 years; 

Began procurement of new cars and locomotives, which are being 

built—built—in America by American workers in New York, California, Georgia, and Ohio. I wish it was Florida. 

3 

The Federal Government subsidizes all forms of transportation. 

Let me just say this again. The Federal Government subsidizes all 

forms of transportation. But our Transportation and Infrastructure 

Committee only wants to focus and criticize Amtrak. 

If not for the strong support of the Federal Government, the airline industry would not be making a profit. Repeat: Airports and 

air control towers are subsidized. TSA service—subsidized. Essential air service—subsidized. And airlines are paying for part of the 

Reserve Air Fleet. Moreover, all Federal travel must be on U.S. airlines, and airlines are protected from all foreign competition, while 

Amtrak bears subsidized foreign competition regularly. Even the Highway Trust Fund has been subsidized by $54 billion 

in general revenue over the last several years, and no new funding 

sources have been identified as we begin to look at reauthorization. 

I will make additional comments during my questioning period. 

But I think every American taxpayer should be concerned about 

the fact that we spent $60 billion in reconstructing Iraq alone. It 

is just inconceivable that we do not want to invest our tax dollars, 

American tax dollars, into making sure that we can move our people, goods, and services so we can be competitive with the rest of 

the world. 

With that, Mr. Chairman, I yield back the balance of my time. 

Mr. DENHAM. Thank you. I now recognize the previous full committee chairman, Mr. Mica, for a brief opening statement. 

Mr. MICA. Thank you so much. 

Ms. BROWN. Mr. Chairman? Mr. Chairman, I object. 

Mr. MICA. Thank you. 

Mr. DENHAM. Mr. Mica. 

Mr. MICA. Thank you so much. Mr. Chairman—— 

Ms. BROWN. Mr. Chairman? Are we operating on different rules? 

My understanding of Rule 6 of this committee is that unless you 

have the concurrence of the ranking member, no Member can 

speak unless prior approval, based on Rule 6. Has something 

changed? Why is the Transportation Committee—— 

Mr. MICA. To the point, Mr. Chairman, it has been the custom 

afforded in this committee that always extended to the previous 

chairman when the previous chairman attended a hearing, whether 

it was Mr. Oberstar or Mr. Young, we always extended the courtesy to that former chair to have, if they wished, the courtesy of 

allowing them a statement. 

Ms. BROWN. On the point, Mr. Chairman, this rule was adopted 

in this Congress as a request of the chairman, Mr. Shuster. There 

was lengthy discussions between Chairman Shuster and Ranking 

Member Rahall and the staff. 

At no time did anyone indicate that this committee would act 

any different from the rest of the subcommittees. At my understanding, and maybe you had better call in one of your attorneys, 

unless I concur, it cannot happen. 

Mr. DENHAM. Thank you, Ms. Brown. I do not think we will be 

going to court over this issue. But point well taken. We will address Mr. Mica during the full committee statements. 

Ms. BROWN. Thank you, Mr. Chairman. 

Mr. DENHAM. I would like to again thank our witnesses for being 

here today. First on our panel, Mr. Robert Puentes, senior fellow 

4 

at the Brookings Institution; the Honorable Joseph Boardman, 

president and CEO of Amtrak; David Kutrosky, managing director 

of the Capital Corridor; and Ross Capon, president and chief executive officer of the National Association of Railroad Passengers. 

I ask unanimous consent that our witnesses’ full statements be 

included in the record. Without objection, so ordered. 

Since your written testimony has been made part of the record, 

the subcommittee would request your oral testimony limited to 5 

minutes. Mr. Puentes, you may proceed. 

TESTIMONY OF ROBERT PUENTES, SENIOR FELLOW AND DIRECTOR OF THE METROPOLITAN POLICY PROGRAM, 

BROOKINGS INSTITUTION; HON. JOSEPH H. BOARDMAN, 

PRESIDENT AND CHIEF EXECUTIVE OFFICER, AMTRAK; 

DAVID B. KUTROSKY, MANAGING DIRECTOR, CAPITOL CORRIDOR JOINT POWERS AUTHORITY; AND ROSS B. CAPON, 

PRESIDENT AND CHIEF EXECUTIVE OFFICER, NATIONAL ASSOCIATION OF RAILROAD PASSENGERS 

Mr. PUENTES. Thank you very much. Good afternoon, Chairman 

Denham, Ranking Member Brown, and members of the committee. 

I appreciate the invitation to appear before you this afternoon. 

The purpose of my testimony is to discuss Amtrak’s financial and 

operational performance. I am going to underscore the new and 

emerging partnerships that are emerging between the Federal Government, Amtrak, and the States, and describe an approach for 

sharing operating costs for the long-distance routes. 

As you know, it is an opportune time for this hearing, given the 

expiration of the Passenger Rail Investment and Improvement Act 

this September. Among other things, that law laid out a bold new 

vision for passenger rail that emphasized better performance, both 

financial and operational, and set the framework for a new kind of 

commitment for Amtrak’s State partners. 

States now share operating costs for most short-distance rail corridors which stretch 750 miles from end to end. Today these routes 

are Amtrak’s high performers, carrying about 85 percent of travelers, the vast of which between our Nation’s largest 100 largest 

metropolitan areas, the engines of our national economy. 

Spurred on by Federal action and recognizing the value that passenger rail provides in supporting these major metros, States have 

stepped up and identified their own solutions to support Amtrak 

both within and beyond their borders. 

For example, New York State recently assigned $44 million in its 

current budget to support its obligation for the Empire Corridor. 

Virginia’s new transportation package includes over $50 million in 

dedicated revenue for capital and operating costs. 

Pennsylvania recently agreed to contribute $4 million per year to 

support the Pennsylvanian, keeping service uninterrupted in the 

western part of that State. Vermont is budgeting an additional $3 

million for its share of the Vermonter, and California’s revised 

budget proposal now includes an additional $19 million to cover the 

operating requirements for the Pacific Surfliner. 

Other States like Michigan support passenger rail through nondedicated allocation of revenue from their transportation fund, or 

in the case of Wisconsin and Missouri, its general fund. Oregon 

5 

uses a dedicated portion of revenue from their personal license 

plate fees to support its service; and Washington State taps motor 

vehicle sales taxes and car rental fees. 

My point here is that a new 21st-century federalism model is 

emerging that challenges our States and metropolitan areas to develop deep and innovative approaches to solve the Nation’s most 

pressing transportation problems. 

However, we think more needs to be done. Ensuring an efficient 

and effective passenger rail network in a constrained fiscal environment will require building on the Federal/State partnership initiated by PRIIA and applying it broadly across the transportation 

network. In this way it should be a top priority to expand the requirement for State operating support to include the long-distance 

routes. 

The 15 long-distance routes carry a small share of national ridership, 15 percent, and largely responsible for the ongoing operating 

deficit. They do, however, provide extensive service to isolated rural 

areas and support national connectivity. 

The goal of expanding the requirement for State support should 

not be to eliminate the routes or to simply offload responsibility 

from the Federal Government to the States, but to strengthen the 

partnership, to build off the innovation, and reaffirm the commitment of States to long-distance routes over time. 

State and Federal stakeholders have undertaken a rigorous and 

complicated exercise to establish standard pricing policies and cost 

methodology for short-distance routes in accordance with Federal 

law. It is reasonable to apply the lessons from this exercise to longdistance routes as well through careful and collaborative work with 

State leaders and the freight rail companies. 

Of course, I recognize that the long-distance routes are much 

more complex for several reasons, including their length and the 

fact that they operate in more than one State. Therefore, a negotiated approach should recognize that long-distance routes do not 

provide the same service to all States along their route, nor do they 

serve the same function as short-distance routes. 

For example, the Lakeshore Limited between Boston and Chicago only travels through Ohio during low ridership overnight 

hours, but it serves other States during typical travel times. 

Now, in exchange for greater responsibility from Washington, 

States should have added flexibility to design and allocate what are 

likely to be shrinking levels of resources. As you know, current 

Federal law allows States to use Congestion Mitigation and Air 

Quality program dollars for rail operations, but it is limited to only 

3 years. 

As AASHTO and others have encouraged, that cap should be removed. Doing so does not change the distribution of funds, nor does 

it mandate the use of CMAQ funds for passenger rail. It simply 

gives States and groups of States the flexibility envisioned in Federal law, and empowers them to devise their own solutions. 

Mr. Chairman, I firmly believe that scrutiny should be applied 

evenly to the entire transportation network and not just to Amtrak 

alone. Much attention is given to the fact that other nonprivate 

transportation passenger modes are not profitable, nor do they concern themselves with being so. 

6 

Yet while Amtrak has done a lot to remake itself in recent years, 

States need to continue to reaffirm their commitment for the model 

to be sustainable. The upcoming reauthorization and the finalization of the National Rail Plan, coupled with increased attention on 

the role of passenger rail in States, make this the right time to 

focus on the future of Amtrak despite these fiscally constrained 

times. 

Thank you again for the invitation to appear before you this 

afternoon. 

Mr. DENHAM. Thank you, Mr. Puentes. 

Mr. Boardman, you may proceed. 

Mr. BOARDMAN. Mr. Chairman, Ms. Brown, and Members, over 

the last 10 years our ridership has been rising consistently, particularly on our national system, which is also known as the longdistance trains. We are, on average, as full at peak as our Acela 

trains on the Northeast Corridor. This has helped us raise revenues, which have improved our recovery to nearly 88 percent. 

The operation of the national system is a core Federal responsibility since 1971, and if we are going to offer train service, a Federal-funded national system is the best way to keep costs low, provide the customer choices that build ridership, and develop economies of scale. 

I spent the last week and a half riding the Zephyr to and from 

the west coast to celebrate both the National Train Day and the 

unveiling of the 70 new Siemens locomotives built in California. I 

think the Zephyr is a good case study in some of the challenges 

along the long-distance trains. 

Each train can carry and accommodate 365 passengers at a time. 

The average number of passengers carried per trip in 2012 was 

512. And while the peak load is lower, we come close to filing each 

seat twice during the course of the 2,438-mile trip. 

We can have up to six separate trains labeled the California 

Zephyr out on the road simultaneously. And we have six different 

crew bases because of the mandated Hours of Service Act, and we 

have got onboard staff that stays with the train for the whole trip, 

providing customer service. So it takes 254 crewmembers to maintain a daily schedule for the Zephyr. 

We have invested approximately $54 million in stations and facilities on the Zephyr route since 2006. That pales, though, in comparison to the $6.5 billion investment being made in Denver that 

will include commuter rail, bus rapid transit, light rail service with 

major investment from the FTA, an investment that would likely 

have happened if Congress had not required a national system to 

be preserved. 

We cannot ignore the economic development that is being supported in every city, village, or town that Amtrak operates in the 

35 stations on this route. Even Salt Lake City—5 years ago, Utah 

started the FrontRunner Commuter Rail, and is investing in a comprehensive network of public transit options for their residents, 

again with major Federal investment from the FTA. Amtrak ridership at Salt Lake City has grown over 50 percent in the last 5 

years, and that is in the middle of the night. 

Seventeen of the thirty-five stations on the Zephyr route provide 

mass transit connectivity to the communities we serve. Forty-three 

7 

percent of the riders who come into Chicago connect with another 

Amtrak train. And while I was in California, I was at Sacramento 

for the National Train Day. Sacramento, our seventh busiest station on the Amtrak national system with over a million riders, is 

making major investments for connectivity that will soon drive ridership, mobility, and economic development even higher. 

Amtrak’s labor cost is not unique to the service industry. Some 

service industries can consume 70 percent of their operating expenses on labor cost. It is our largest single cost. Labor is the primary cost driver for most American businesses today. According to 

KPMG, labor is typically 30 percent of total manufacturing cost in 

developing markets, and it is 55 percent of the manufacturing expenses in New York, and one of the reasons that offshoring has occurred with manufacturing. 

The numbers are correct in the above table, which came from the 

memo that the committee put out. They are correct, but they are 

not complete. The total, if added, would be $3,184,000,000, and 

would show labor at 63 percent of the cost. Instead, the number 

from the financial audit that Amtrak has is $4,035,000,000. Amtrak spent 50 percent on labor in fiscal year 2012. It is a number 

that is comparable to mfg. 

Long-distance trains are a core public service provided by the 

United States for national connectivity and mobility, and it is clear 

they are doing more than that. These trains cross State lines in 

interstate commerce, clearly a Federal responsibility. 

Amtrak has a clear Federal mandate to run these services. Between 1971 and 1997, we were required to operate a DOT-designated basic system that included long-distance routes. Today the 

Rail Passenger Services Act, as amended by PRIIA, requires us to 

operate a national passenger rail system that includes long-distance routes. That legislation included a ‘‘sense of Congress’’ statement asserting that, ‘‘Long-distance passenger rail is a vital and 

necessary part of our national transportation system and economy.’’ 

Should Congress again decide in the next reauthorization to continue a national system, Amtrak is dedicated to ensuring that longdistance trains are sustained and that they are run as efficiently 

and effectively as possible. 

Thank you. 

Mr. DENHAM. Thank you, Mr. Boardman. 

Mr. Kutrosky? 

Mr. KUTROSKY. Thank you, Chair Denham and Ranking Member 

Brown and committee members. I am here to provide insight on 

the tools that States can use to manage their State-supported services. 

On the Capitol Corridor, for which I am the managing director, 

it is the third-busiest corridor in the Amtrak system, connecting 

Sacramento, San Francisco Bay area, and San Jose/Silicon Valley. 

Throughout its inception, the State of California has provided 100 

percent of the operating support for these trains. 

Over the last 3 years, we have noticed the main cost drivers for 

the service include fuel, which is rising at about 6 percent per year; 

direct route costs, approximately 2 percent a year; and shared 

costs, approximately 2.3 percent a year. 

8 

Over the last 15 years, the Capitol Corridor Joint Powers Authority has been working with its local Amtrak team to control operating expenses while maximizing revenues, yet making sure we 

employ those amenities which will improve the customer’s experience. 

With fuel as a cost driver, what we do with Amtrak as they purchase the fuel is to develop conservative cost estimates to make 

sure that fuel spikes do not negatively impact our budget. And we 

also opt into the fuel hedging program. And while hedging does not 

guarantee a reduction in costs, it does help provide a moderating 

factor. It levels out the potential for large spikes in fuel prices. 

One of the other areas that we use to control operating costs is 

to optimize the service performance. We recently did that in August 2012, and we were able to drop our operating expense by $21⁄2

million, approximately 4 percent of our operating budget. 

So as you can see, the ability to control operating costs while 

maintaining a solid, consistent performance and keeping the passengers happy, requires that strong relationship between the manager and the operator of these State-supported trains. 

I would like to transition to PRIIA Section 209 policy, where 

States now begin to have a better idea and better way of understanding and controlling their operating costs. Section 209 provides 

a policy for which States will now be able to engage with Amtrak 

on the allocation of operating costs and equipment capital costs 

with a policy that is fair, equitable, and transparent. 

States have been working cooperatively with Amtrak over the 

last 2 years, and we have seen significant progress in the policy. 

We have developed a menu of 15 items from which States can select those services for Amtrak to provide these services, and also 

help develop cost-effective budgets. 

Most recently, on April 18, the States received their fiscal year 

2014 projections, and we have been working with the 27 routes. We 

pulled them all together and made one worksheet so that we can 

do a comparison. We met with Amtrak yesterday in an all-day 

meeting. It was a very productive meeting, where we are lining up 

those costs to make sure they adhere to the Section 209 policy. And 

we will be continuing to meet with Amtrak over the next 2 months. 

Just to give you an example of what we are seeing as States, in 

fiscal year 2013 the estimated contribution by States for these 

State-supported routes is $193 million. That number increases to 

$317 million in fiscal year 2014. That is an increase of $119 million, or 60-percent increase, a lump sum payment. 

Now, having said that, the States have been working with their 

legislative houses and Governors’ offices to increase their share of 

support for these services. And now, as I said, we are doing this 

side-by-side comparison with Amtrak. We are making sure that 

these forecasts can line up with the policy, and also that these 

States can absorb these costs in their fiscal year 2014 budgets. 

So upon closer evaluation, we are starting to see that the States 

and Amtrak will have to form a stronger, more transparent bonding together to make sure that these costs are transparent, equitable, and fair. We have a menu of items from which States to select Amtrak for those particular services in that menu. 

9 

We are all driven to make sure the service performance and ridership and revenue meet the goals of each State budget. And one 

of the things we were working as well besides costs is also revenues. So we want to make sure that we maximize revenues as best 

as possible. 

So in closing, the Section 209 policy allows State intercity passenger rail agencies to acquire the tools to understand and control 

those cost drivers in their State-supported services. These tools can 

help States make business-based decisions in the delivery of their 

intercity passenger rail services that meet the needs of the traveling public while also ensuring these services are cost-effective 

and efficient. 

Thank you for the opportunity to present my testimony. 

Mr. DENHAM. Thank you. 

Mr. Capon? 

Mr. CAPON. Thank you, Mr. Chairman. 

Broadly speaking, the major drivers of net costs of Amtrak service are Northeast Corridor capital costs and long-distance train operations. The Northeast Corridor requires considerable capital just 

to maintain its current condition. 

Our two major concerns about the Northeast Corridor are: Because it is at or near capacity, fares continually rise, and the proportion of the population that can afford to ride falls; and public 

discourse has overemphasized the difference between capital and 

operating costs. 

The latter point has caused many people to believe that the 

Northeast Corridor is profitable in a private sector sense. The reality, of course, is that without Federal capital support, the Northeast Corridor’s downward drift would become a death spiral. And 

without the rest of the system, a sizable chunk of the fully allocated costs of the long-distance trains would not go away, but 

would be reassigned to the Northeast Corridor. 

Amtrak’s individual routes are part of an interactive and interdependent system. The impact of eliminating any route or group of 

routes involves assumptions about what would happen to revenues 

from passengers connecting with surviving trains, and distinguishing between costs that would be eliminated and those that 

would be shifted to surviving trains. Fully allocated cost figures 

vastly overstate what could be saved by eliminating any one service. 

The long-distance trains are heavily used by people who get on 

and off at intermediate points, and accounted in fiscal year 2012 

for 43 percent of all Amtrak intercity passenger-miles, and provided the only Amtrak service in 23 States. 

Our view is that we should be increasing the service, lengthening 

trains; filing gaps in the national network; making track, signal, 

and station improvements, many of which are going forward, and 

procuring high-performance modern equipment. 

Amtrak’s network is so skeletal that attempts to eliminate individual routes would seriously weaken the system’s credibility, and 

also likely lead to wasting a lot of energy, Amtrak staff time, Capitol Hill staff time, and a lot of others. There is scant evidence that 

elimination of routes in the past has resulted in meaningful improvements to Amtrak’s bottom line. 

10 

The report that Rob Puentes authored well outlines how growth 

on Amtrak has outstripped the population growth, the real GDP, 

and growth in use of other modes of travel. At the same time, airline and intercity bus services have been reducing their service to 

small markets to focus on larger markets. 

A study released this month by MIT found that in the past 6 

years, there was a 14-percent decline in yearly scheduled domestic 

flights from the U.S. air transportation system, with small hub and 

medium hub airports disproportionately affected. 

There has been some discussion about shifting cost of the longdistance trains to the States. PRIIA, the 2008 law, reaffirmed the 

long-distance trains as a logical Federal responsibility. These trains 

could not survive a mandate that they get State support. 

For a route to survive, every State along it would have to agree 

to fund the service and agree on schedules, service amenities, and 

cost allocations. That means funding service in the middle of the 

night in most of Nebraska because of the crucial marketing importance of hitting Chicago, Denver, and Bay Area markets at attractive hours. 

Any single State not cooperating could torpedo an entire route, 

and any route dropped from the system would shift some costs to 

surviving routes. And the revenue impact on surviving routes 

would mainly be negative due to loss of connecting revenue. 

Our members are bemused by the intense focus inside the beltway on subsidies to passenger trains in contrast with highways 

and aviation. Starting in 2008, $53 billion in general funds have 

been transferred to the Highway Trust Fund. That is about three 

times what the Federal Government has spent on Amtrak operating grants over 42 years. 

What is worse, once this money is transferred to the Highway 

Trust Fund, it takes on the same restrictions as if it had been paid 

by highway users. In general, railroads need not apply. This is but 

one example of transportation policy out of touch with demand 

trends, and one reason why we frequently hear that the public is 

ahead of the politicians. For aviation and highways, subsidies are 

scattered over many different balance sheets, less concentrated, 

and less obvious than Amtrak’s. 

We support the budget requests of the administration and Amtrak, and would point out that Amtrak does reduce costs in other 

areas by removing passengers from highways, encouraging denser 

development around many of its stations, adding to the 

attractiveness and cost-effectiveness of transit systems by serving 

passengers making connections and by sharing facilities, and running electric locomotives on the Northeast Corridor and fuel-efficient diesels elsewhere. 

Thank you very much for your time. 

Mr. DENHAM. Mr. Puentes, your report states that top priority of 

this upcoming reauthorization should be to expand the Federal and 

State cost-share partnership to Amtrak’s long-distance routes to 

improve their financial performance. 

Can you explain what is the justification for why you believe 

that? 

Mr. PUENTES. Thank you, Mr. Chairman. To clarify, it is not just 

to improve their financial performance, although we think that 

11 

that is certainly a big piece of this. The analysis that we conducted 

looking at the short-distance routes, we included the State revenue 

sources that were coming in as revenue for these routes in our calculation. We found much more positive balances on the operating 

side when you include these there. So there is a financial piece to 

it, as you mentioned. 

But in a lot of the work that we are doing, not just for Amtrak 

but across transportation and other areas in general, when the 

States have a role to play in this, when the States have skin in the 

game, and when they participate with the Federal entities for 

things like Amtrak service, we are seeing much better-run service. 

We are seeing new innovations, new ideas. And we are seeing better integration of passenger rail within the existing network that 

they are operating. 

Mr. Boardman and others talked already today about some of the 

interesting things that are happening in I guess it was the California Zephyr, in Colorado, and in Salt Lake City. We are seeing 

in North Carolina and Maine and a bunch of other places a very 

different type of service that is much more attuned to the unique 

traditions and the cultures and just the preferences of these individual States. 

So a big piece of it, as you mentioned, is about the financial performance. But we think that having the States be committed to 

having these services, putting skin in the game, not just results in 

better financial balances but also results in better service overall. 

Mr. DENHAM. Thank you. 

Mr. Kutrosky, while we are talking about Section 209, Amtrak 

recently released its projections for fiscal year 2014 and under 209, 

which is significantly higher than amounts that were estimated 

using 2011 and 2012 data. 

How confident are you in their estimates? And have they provided you backup that you need to plan your business in the estimates? 

Mr. KUTROSKY. Chair Denham, that was exactly what we were 

talking about in yesterday’s meeting. So we are starting to get that 

information provided to us. We are finding one of the larger increases is the equipment capital charge; it was based on a formula 

that has changed, and that has caused an increase in the equipment capital charge. 

That is the most obvious one that we have seen so far. But we 

need to get into further details there and find exactly what you are 

asking. 

Mr. DENHAM. In your 15 years of experience with Section 209 

State-supported routes, what policies would you change? What is 

working well? And what are some of the cost drivers that make it 

a challenge for you to control your business? 

Mr. KUTROSKY. Sure. Exactly. Thank you. I would say the cost 

drivers, as I mentioned, are fuel and direct costs; and the shared 

costs, most importantly is fuel. As we have all seen when we go to 

go fill up at the gas pump, that seems to be—or I know that is for 

us. I’m not sure about the other States, but that seems to be the 

largest driver. 

So hedging helps, and developing an optimized service plan that 

reduces fuel as best as possible. As far as the labor costs, as Mr. 

12 

Boardman, President Boardman brought up, those are matters of 

their national agreements. 

But I will say one of the areas that we are looking at, and this 

has been part of the Section 209, is the menu of services. So some 

States can opt to another provider. For example, on the Capitol 

Corridor, our call center goes to the local transit agency. Those operators who answer the phones are cross-trained so they can handle not only transit-type questions but also questions on the Capitol Corridor. 

On the Downeaster, they outsource their food and beverage service to a catering company. And in North Carolina, their State-supported Piedmont route, they have a third party maintain their 

equipment, which is owned by the State of North Carolina. 

So those are just some examples of what is available to help control costs. We still have a very strong partnership on the Capitol 

Corridor with Amtrak. They provide a safe, reliable product for our 

passengers, and our passengers have some of the higher customer 

satisfaction scores thanks to those crews. 

Mr. DENHAM. Thank you. 

And Mr. Capon, every time we have one of these hearings, a fact 

always gets thrown out about subsidies for aviation and buses and 

highway bills and everything else. 

Would you want to take the same subsidy as aviation? Would 

that be an equitable solution? 

Mr. CAPON. Well, I think the goal should be to have an efficient 

system that serves the public. So I think that the financial performance of the long-distance trains and the State-supported transactions are roughly similar if you are just comparing costs and passenger revenues and take out the State payments. For example, the Essential Air Service program is a $200 million-a-year program, but the nature of the service is very different 

from a train. Essentially, you serve a particular airport in rural 

Montana. Say they may have a flight from St. Paul or wherever. 

You can decide that that particular airport does not need service 

and take out that flight, and it does not have a dramatic effect on 

the rest of the system; whereas if you decide that, say, Grand Junction or Denver is not going to be served on the California Zephyr, 

you essentially have to take out the entire route because the California Zephyr would not be viable without the ability to serve Denver. 

So I would say—— 

Mr. DENHAM. I will come back to that because I am out of time. 

Mr. CAPON. Yes. 

Mr. DENHAM. But I just wanted to make the point that aviation 

per-passenger receives a subsidy of about $4.28, mass transit about 

95 cents per passenger, Amtrak $46.33 per passenger. So there is 

definitely a big discrepancy. 

But that is one of the issues that we are going to try to get to 

in this whole PRIIA reauthorization, is how much subsidy is fair 

for the American taxpayer? How much should we be subsidizing 

every ticket? And are there more efficient ways to run this? 

Mr. CAPON. Right. Thank you. 

Mr. DENHAM. But I will come back to that. I am out of time. 

I now yield 5 minutes to the ranking member, Corinne Brown. 

13 

Ms. BROWN. Mr. Boardman, first of all I want to thank you for 

your leadership. You know, I serve in the people’s House, and it is 

just very interesting that the people—I don’t know what they think 

about cost-shifting because basically, the States, they are out of 

money, and it is whether or not we think it is important to invest 

in a comprehensive system. 

I want to thank you for participating in Train Day. I also have 

supported Train Day. But the point is, you mentioned Salt Lake 

City, Utah. You know, they have money that came from Florida. 

And they developed the system, and the routes are developed, and 

they are moving their people, goods, and services. Money that was 

slated for Florida went to Salt Lake City. I rode the train. It goes 

all up in the mountains, moving the students. And everywhere they 

built a station, it was economic development. 

So as we move forward—and I am so sorry that the House—really, it used to be the leader in coming up a bill that was comprehensive, and the Senate would kind of just take our work. Now we 

have just got to take the Senate’s work because we are not able to 

do our work. 

Can you talk about the importance of having an integrated, comprehensive system? And when you talk about California—I have 

got to say it—I recently was out there. I am on VA, and I went 

there, and we have 400 units that were built with Federal Government money that are standing idle because the State of California 

doesn’t have money for operation. 

So we are looking at an economic system that we need to kick 

start. But it has to be a partnership between the State, local, and 

Federal Government. And I do not know. It is all the same taxpayers’ dollars whether it is coming from the Federal Government 

or whether it is local government. It is not foreign sources. 

Would you respond to that? 

Mr. BOARDMAN. Yes, I will. And I think you have hit an absolute 

point, the need for connectivity and network. I think that Brookings identifies that as well. They have a different idea on how that 

might really work. And my expectation is that the committee really 

does want to see that happen, have that connectivity and that network. 

I was hoping that what you would say is that you would provide 

the assistance, Mr. Chairman, that is provided to aviation in the 

50,000 employees of DOT that provide the air traffic control system, which I do not know if it is included in that subsidy number 

that you really talked about. But with DOT being a 60,000-person 

agency and 50,000 of the people being at FAA, that is a pretty significant subsidy, I guess you would call it. 

Mr. DENHAM. Mr. Boardman, I would just add that it is included 

in that number. 

Mr. BOARDMAN. Good. Then we have a lot of passengers that it 

is being applied to. 

The idea, though, that you could have a railroad system that operated around this country without having it being connected together of course does not make sense to anybody. It absolutely 

would be dangling pieces all over the country, and it really would 

not work. 

14 

When Denver had the opportunity to grow its service, the only 

reason that you really had a station there was because Amtrak had 

been coming in and out of that location. And there was a lot of 

stress at that period of time about whether you would maintain a 

connection further to the west, to the Front Range, because they 

wanted to build a new sports arena. 

And Amtrak and FRA at that time really were able to work together with the transit system out there to make a new system 

really work. And that is where that $61⁄2 billion investment really 

came from. 

Ms. BROWN. One last thing. You know the Sunset Limited. I 

want that reinstated. But I have talked to the mayors in all of 

those cities, from New Orleans to Orlando, and there is energy 

there. But of course, it was not profit-making. 

So a lot of the system is not profit-making. When I think about 

New Orleans and Katrina, I think we need to think out of the box. 

We need a system in place that when we have natural disasters or 

we are being attacked, we can move people out of harm’s way. 

We have got to think out of the box. I mean, we have got to figure out how we can make sure that we are moving—we used to be 

the leaders in rail, and now we are the caboose, and we do not use 

cabooses any more. 

Thank you again. 

Mr. BOARDMAN. You are welcome. 

Ms. BROWN. I yield back the balance of my time. 

Mr. DENHAM. Thank you. 

Mr. Mica? 

Mr. MICA. Thank you, Mr. Chairman. First off, some comments 

and then one or two questions, since I did not have an opportunity 

to make them at the beginning. 

You have heard a fairly rosy picture painted by some of the current operators and advocates of Amtrak. And let me just take parts 

of this apart here. 

First, the Northeast Corridor—and no one is a bigger fan of coming up with out-of-the-box thinking. In fact, if we privatized the 

Northeast Corridor, opened it to competition—we will just say 

opened it to private competition—Amtrak would be put out of business in a nanosecond because it is still a Soviet-style train operation, and as long as you have that, people will not be thinking out 

of the box till. We truly open competition, that is going to take 

place. 

And then the—I call it ‘‘Fantasyland finances’’ of Amtrak. I will 

tell you the Northeast Corridor is making money, and only in that 

Fantasyland financing do you not even amortize over some period 

of time some of the capital costs because we have been pouring billions into the Northeast Corridor, which is the only stretch of track 

that they really own of any consequence. 

First, the Northeast Corridor lack of progress will continue. It 

does not make money no matter how you cook the books. 

Let’s go next quickly to—I worked hard on PRIIA. We passed it, 

Mr. Oberstar and I, the first reauthorization in 11 years. We came 

up with performance improvement plans for each of these long-distance money-losing propositions. And we wanted to improve the 

service. 

15 

Mr. Capon and others, are you aware that we are actually losing 

ground from last year? And I had the staff produce this. Mr. 

Boardman highlighted the Zephyr. We have gone from the loss per 

passenger of $165.80 to $182 in a year, from 2011 to 2012. The Southwest Chief, the Chicago to Los Angeles, $177 was the loss. It is now $183.40. And then the whopper of all the losers, 

which is the Sunset Limited, and I pointed out a year ago that 

again—the loss was $375 a ticket, per passenger. 

And we looked online, and you could order a limousine from anywhere in New Orleans to the airport, buy the ticket, and go in a 

few hours to Los Angeles, and then deliver someone to the Los Angeles area, and it would cost less than it costs for Amtrak to operate. We would actually save money. And the loss with the Sunset 

Limited has increased from $375.10 to $400. This is a great concern because we have tried to do better. 

So the losses continue. They are pooh-poohed. It is over a half 

a billion dollars, as the chairman of the committee has pointed out. 

And again, $46 and some cents for every ticket. It’s so off the 

charts. 

I might remind folks—and when we pass these out, we also have 

the bus routes which can get you there faster and at lower cost in 

almost every instance. So there is plenty of service, and you can 

stem some of the loss and bleeding, and people can get where they 

want to. 

By the way, too, the surface carriers—the Greyhounds, the 

Megabus, all the dozens of surface carriers—are the largest carriers in the United States, more than aviation, far more than 31 

million, which is almost a joke in rail terms in world rail passenger 

service. But they all make money. They pay taxes. And they are 

not subsidized. I know that is shocking to folks. 

So Amtrak again comes forward with losses. Anything they touch 

seems to turn to—I will not say it here because it is a public audience, but look at Auto Train losses to Florida. They have grown in 

a year from $108.90 to $122.60. So we are going south rather than 

making progress forward. 

My final question, Mr. Boardman: How much are the losses—I 

asked you last time; you were going to provide the committee—on 

food service to Amtrak, which were in the $80-plus million? I do 

not have that for 2012. Could you inform the committee today? 

Mr. BOARDMAN. Mr. Mica, our food and beverage revenue is 

about 6 percent of our total revenue, and our costs are typically 

about 5 percent of that. 

Mr. MICA. What was your loss? It was $84 million, $83 million? 

Mr. BOARDMAN. I am looking here right this minute. The total 

revenue is 132. Our net loss was $72 million. 

Mr. MICA. $72 million. Thank you. 

Mr. DENHAM. Thank you. 

Ms. Esty. 

Ms. ESTY. Thank you, Mr. Chairman. 

Last Friday as I was heading home and looking at the committee’s schedule for this week, I was thinking about this hearing, and 

then I got news about a trail derailment in my State. Worst and 

with children who ride that line all the time, we were all just incredibly grateful that no one was killed. 

16 

You know, it appears now that an eastbound Metro North train 

on the New Haven line derailed, struck a westbound train causing 

it to derail, over 70 people injured, several critical, and many are 

crediting our relatively new railcars, which we have been investing 

in, for saving lives in that accident, and while the NTSB is continuing to investigate the accident, it is worth noting that the 

NTSB reports that the eastbound engineer noted a broken rail just 

the time of the incident. 

We are continuing to rebuild the affected track, and it is my understanding at the time of the derailment there were only two 

operational tracks on the Northeast Corridor at that location, and 

with the other two lines out of service for major update work. 

This work eliminated critical capacity, and on a Friday, the 

Northeast Corridor was closed. I will note also this is also on a 

graduation weekend. Considerable traffic, considerable disruption 

to hundreds of thousands of people, and I have heard from folks 

across Connecticut that the upgrade work on the line and on these 

additional operational tracks cannot be accelerated due in part to 

the fact that Connecticut does not receive funding for this portion 

of the Northeast Corridor from the funds appropriated to Amtrak 

for the corridor. 

Now, Mr. Puentes, the Brookings Institute in your proposal has 

been discussed with my folks at the DOT in Connecticut, and they 

have pointed out to me that in your plan to turn responsibility over 

to the States, you assume that States would be able to draw on the 

Highway Trust Fund. 

However, we are all very well aware that the Highway Trust 

Fund with its current obligations and funded by the current gas 

tax is not sustainable in its present state. 

Does the Brookings Institution support raising the gas tax while 

suggesting that the Trust Fund take on passenger rail infrastructure? 

Mr. PUENTES. Thank you very much. 

So, first of all, we do not advocate just turning over the routes 

to the States. We have tried to go to great pains to make the point 

that we are really talking about a partnership that is not just a 

Federal operation, particularly for the long-distance routes in certain places, but we are so encouraged and so optimistic by these 

great examples of partnerships that we are seeing all across the 

country. And so that is the kind of thing that we are trying to see 

proliferate around the U.S. 

Now, that said, not being naive or ridiculous about it, we certainly know that the States are facing tremendous budgetary challenges all across the board, transportation being one of the key 

ones. A lot of that is because of challenges with the Federal Highway Trust Fund. We certainly know that, and we do not see that 

increasing, you know, anytime soon. 

But to your question, we do think that it is the flexibility that 

we should be providing, that the Federal Government should be 

providing to the States if there is going to be then this deal where 

the States are picking up more of the responsibility in this greater 

partnership. That to be coupled with additional flexibility, again, 

not just for Amtrak, not just transportation, but as we are starting 

to experiment with these new models for federalism, you know, 

17 

that has got to be kind of part of it. That has got to be this flexibility. 

Ms. ESTY. But no additional money, just greater flexibility in deploying the money from the highways that are falling apart in Connecticut to the rails that are falling apart? 

Mr. PUENTES. That is a big piece of it. We certainly think that 

additional money would be tremendous. I mean, we think the Federal gasoline tax has not be raised in 20-plus years. We all know 

that. We all know the current condition of the Federal Highway 

Trust Fund. A gasoline tax is long overdue in this country. I personally would support that. 

I think that there is a need to do that. I think that we have seen 

that we can spend that money much better, and we certainly know 

that the maintenance needs all across the transportation network 

are in terrible shape. So we certainly need to do that. 

That being said, I just do not see it happening any time soon. If 

there is not going to be additional money there needs to be flexibility. 

Ms. ESTY. I would agree with that. 

It is well documented the Northeast Corridor, like much of our 

infrastructure, has a huge backlog of capital needs. It is estimated 

under the Master Plan this is a backlog of $8 billion. Very quickly 

from each one of you, yes or no, do you believe that this backlog 

in the Northeast Corridor is a Federal responsibility on capital 

needs? 

Mr. BOARDMAN. Yes. 

Mr. CAPON. Yes. 

Mr. KUTROSKY. Yes. 

Mr. PUENTES. Partly. 

Ms. ESTY. Partly. All right. 

In closing, I would like to note that according to the Connecticut 

DOD—we like these answers—Connecticut has already spent $5 

billion of its own money on the New Haven line, but it is estimated 

that it is going to take another $4.6 billion on this line for a major 

part of the Northeast Corridor just to get to the general state of 

good repair and modernization. 

So as we look at these different models, partner States are going 

to have to rely on each other and deal with the Federal Government to travel on this most used line, and we do need to take into 

account these capital costs which are significant, and in light of 

super storm Sandy, where we had the New Haven rail line under 

water during that storm. So we cannot take into account just operating systems, but the capital costs. 

I want to thank the chairman for the hearing and yield back my 

time. 

Mr. DENHAM. Thank you. 

Mr. Hanna. 

Mr. HANNA. Thank you, Chairman. 

Mr. Capon, you mentioned that in some way this Congress or our 

policies are out of touch with demand. Yet in your own statement— 

and there is all kinds of demand for all kinds of things—but you 

say that key stations and overall fleets are near capacity. Fares are 

continually rising, and the proportion of population who can afford 

to ride Amtrak continually falls, yet demand goes up. 

18 

So I mean it could be possible, but how are both possible? What 

is wrong with letting supply and demand work when apparently 

ridership is relatively inflexible to the price? And as you say in 

your own statement, the demand is easily outstripping the supply 

and continues to go up. 

What is a case for continuing to subsidize ridership that has such 

inflexibility in its demand? 

Mr. CAPON. Well, the ridership, it is a strong market. A lot of 

people are turning away from highways and from aviation, and 

Amtrak is compelled to have the highest revenues that they can 

consistent with reasonable load factors because they are under 

pressure to keep their operating grant requirement low. 

When facilities are at capacity, I mean, the most obvious issue 

would be the two tracks under the Hudson River, one of which is 

out of service all weekend for maintenance. 

Mr. HANNA. But we are talking about two different types of demand here. I am talking about the apparent inflexibility of demand 

for the product, for the ride, wherever someone is going. 

I guess directly why do we keep fares low when that X/Y axis 

which one would use if it were a business, you would raise the 

price to a point where you saw ridership decline? 

What is the justification for having it that way? 

Mr. CAPON. Well, first of all, we have a taxpayer supported railroad that a lot of people cannot afford to ride on because the fares 

are so high. It provides—— 

Mr. HANNA. That is conjecture though. I mean, how do you know 

that? Do you have studies that can show that fares are so high that 

a lot of people just choose to go nowhere? 

Mr. CAPON. Well, a lot of people are riding BoltBus and Greyhound and crowding the highways, a higher rate of pollution than 

on the train. There is a lot of anecdotal evidence that—— 

Mr. HANNA. But that does not speak to your statement which 

says that they will not use the train; that on the margin, people 

would continue to decline to use the train if you raise the price. 

Clearly, that is not true because you say in your own statement 

ridership continues to go up regardless of the price, yet you object 

to the raising of the price. 

Mr. CAPON. Well, the biggest percentage growth in Amtrak has 

actually been outside the Northeast Corridor, partly because of the 

very aggressive fares that they are forcing—— 

Mr. HANNA. But they are still at capacity. 

Mr. CAPON. It is at capacity, but it is at a ridiculously constrained capacity. 

Mr. HANNA. Mr. Boardman? 

Mr. BOARDMAN. We have used the same method that the airlines 

do in terms of managing our prices, and especially on the Northeast Corridor, where we can price higher, and we try to price to an 

elasticity where we would have the maximum amount of revenue. 

Mr. HANNA. And you feel like you’re continually doing that, or 

is there something, as Mr. Capon said, there is some public service 

involved beyond that justifies the public paying for these subsidies? 

Mr. BOARDMAN. We are not seeing that. We do not see it that 

way as a provider of service. We are trying to maximize the 

amount of revenue we receive per ticket. 

19 

If you really looked at the cost per ticket and you really applied 

even the service especially on the Northeast Corridor that Member 

Esty was talking about in terms of the connectivity of the Connecticut service, the tracks that we own, everything along the corridor, you are looking at a subsidy for Amtrak of about $5 per ticket nationwide by applying everything. 

Mr. HANNA. Have you done studies to prove Mr. Capon’s point 

that people drop out of the system at some marginal point? 

Mr. BOARDMAN. We are looking all the time. We keep an eye on 

Megabus, for example. What is the profile of the rider? How many 

riders do they have? What do we potentially think their revenues 

are? 

We look to see that we are maximizing our revenues and filling 

our trains. So we are really managing the buckets on a regular 

basis. 

Mr. HANNA. You can kind of see the irony though that ridership 

goes up; the price goes up. Ridership continues to go up. 

Mr. BOARDMAN. Yes. 

Mr. HANNA. If you and I were in business together, we would 

look at that and say this is a source of unrealized revenue because 

demand is so high. 

Mr. BOARDMAN. But you can only raise it at certain times. For 

example, starting at noon on Wednesday, our Acelas at about 11 

o’clock in the morning to noon become full going back to New York 

Wednesday, Thursday and Friday. 

Mr. HANNA. Thank you. Thank you both. My time has expired. 

Mr. DENHAM. Thank you, Mr. Hanna. 

Mr. Webster. 

Mr. WEBSTER. Thank you, Mr. Chairman. 

I only have one question, and it came from a previous question 

where four of you were asked would you be for taking the Transportation Trust Fund using that money to subsidize the lack of 

maintenance on the Northeast Corridor railroads, and three of you 

answered yes. 

My question is: would you still answer yes if you were from a 

heavy donor State? 

Mr. BOARDMAN. I did not answer yes to that question. 

Mr. WEBSTER. OK. What did you answer? 

Mr. BOARDMAN. I answered yes to the question, sir, that do I 

think it is a Federal responsibility to fund the backlog, not to 

where it comes from out of the Federal Government. 

Mr. WEBSTER. OK. Thank you. 

I yield back. 

Mr. DENHAM. Mr. Radel. 

Ms. Brown is being very generous in allowing us to ask all of our 

questions. We are going to try to get through here. We are expecting votes any minute now, and rather than call all of you back 

again, I would prefer to try to see if we cannot manage our time. 

So thank you. Mr. Radel. 

Mr. RADEL. Thank you. 

Mr. Boardman, you come here and you put up with quite a bit 

with maybe this side drilling with some questions here. I am a 

freshman so maybe I have no idea what I am talking about, but 

here is what I do know. 

20 

Just having owned a business in the real world and worked in 

the private sector all my life, I am just trying to wrap my head 

around where we are at right now in terms of spending and subsidizing, but also what we do forward. And I will tell you I do believe that I would work with our colleague from Florida in understanding that there is a role that the Federal Government plays in 

our infrastructure, and yes, it can be right here right now, but just 

a few kind of real world questions if I may. 

We know that we are losing about $400 million, $400 million— 

even when you just say that number out loud—a year in operations. That is what is subsidized. Are we negotiating pay raises 

right now with employees? 

Mr. BOARDMAN. We have labor contracts that we have on a regular basis, yes. 

Mr. RADEL. OK. How do I explain that to people at home who 

do not have Amtrak in south Florida? 

Mr. BOARDMAN. I think certainly it is a very fair question. I 

think what you have is you have engineers and conductors, maintenance people all that do the same work whether they do it for 

freights or whether they do it for commuters or whether they do 

it for Amtrak. 

If you look at a long-distance train, for example, the recovery 

ratio of what we cover in terms of our costs are pretty close to what 

commuters do. So Amtrak gets dealt with many ways in a sense 

of a loss rather than a purchase of the services that really are out 

there for mobility, for connectivity. 

If you looked at another model like Britain, it is not that they 

are losing money the way they are talking about it. It actually is 

costing the British Government more money now that they have 

privatized than it used to cost them when they did British Rail, 

and the way they get around that is they put it out for bid, and 

then the British Government pays the cost of that bid, and we get 

rid of this idea of a subsidy because that is the provision of the 

cost. 

It is the same thing that is happening here with 209. They 

are—— 

Mr. RADEL. That is OK. How do I justify a pay raise when we 

are just shelling out money? It is your money, your money, you 

when you pay taxes. 

Mr. BOARDMAN. It is the same for a highway contractor in the 

States when the Federal Government provides $4 billion to New 

York State to reconstruct the highway. They pay the contractors 

because the work is done. 

Mr. RADEL. All right. Long-distance routes losing $575 million a 

year, that is it. We can talk about the semantics of subsidizing and 

funding, et cetera, but where I think that we as Democrats and Republicans can work together and work with you is what are we 

doing to reform these. What are we doing to do everything that we 

can to maximize our dollar and stop bleeding money? 

Mr. BOARDMAN. I do not think you are going to be able to cut 

the cost a substantial amount if you continue to provide a connected system across this country. 

Mr. RADEL. Are we looking to ways to even do that? 

21 

Mr. BOARDMAN. Actually, you have been taking the excess funds 

from the Northeast Corridor and putting them into the long-distance trains to reduce the Federal subsidy to the long-distance 

trains. 

Mr. RADEL. In terms of practically speaking, technically speaking, which is way beyond me, but that is why we are here today, 

are we looking at any other areas physically to reform to make the 

rail more efficient or more cost effective besides just taking money 

from one place and putting it into another? 

Mr. BOARDMAN. Well, we certainly look to try to provide a better 

service on a regular basis and keep our costs down, but what you 

really look at here is that the labor is the labor. The fuel, as David 

talked about is something that is much more difficult to identify. 

The major drivers of cost to provide this service is the same for 

all of us. 

Mr. RADEL. All right. Good. Well, look. I hope moving forward if 

there is anywhere where we can be of assistance, again, in finding 

areas that we can cut costs and quit bleeding money, I think that 

in the most bipartisan way we all will do everything that we can 

to move forward with that. 

Thank you. I appreciate your time. I appreciate you putting up 

with us. 

Mr. BOARDMAN. Yes, sir. 

Mr. DENHAM. Thank you. 

Mr. Williams. 

Mr. WILLIAMS. Yes, thank you, Mr. Chair. 

I appreciate you all coming by, and I got here late. I got here 

late. So I am going to ask a pretty simple question. 

I am a business guy. I have been in business in the private sector for 42 years. I have fought every Government regulation you 

can throw at me, and I am a big private sector guy, and I have 

been riding on the trains since my mother took me to California on 

Super Chief in 1953. 

But anyway, here is my question, and I sit here as a taxpayer 

and somebody in Congress. Can you guys ever be profitable? Do 

you think about profits? Do you think about surplus? 

I mean, I know you have got contracts. You have got this and 

that, but I am going to tell you the private sector has been able 

to do things they never thought they could do before with the economy we have had since 2009, and they have been able to make it. 

You know, basically, we, and you are included, we are your banker, and if you are a banker, I want to know how you are going to 

get profitable, I mean, because you are talking to a bank that does 

not have any money. 

So when is Amtrak going to start thinking in terms of getting 

costs in line, giving good service, being competitive? And the question is: could the private sector do it better than you can? 

Mr. BOARDMAN. We are the private sector. We operate like the 

private sector. Our costs are in line when you really look at what 

our costs are. They are in line. 

Mr. WILLIAMS. But in line to whom? 

Mr. BOARDMAN. They are in line to what a similar service would 

be provided by anybody who operated rail. 

22 

When you look at what, Congressman, we provide out there 

today, we provided in 1971 for Congress the ability for the railroads to get rid of a money losing operation, which was passenger 

rail. Congress decided it was important to have passenger rail in 

the United States across the country. 

It is a lot less expensive today in terms of subsidy to provide that 

passenger service with Amtrak the way we operate than it was 

back then. The decision to make that ability for the railroads, 

which are now considered freight railroads, and they were not 

freight railroads in 1971; they were railroads. They provided passenger service. They provided freight service. 

Now they provide freight, but they were not yet profitable even 

in 1971. It took the Staggers Act in 1980 to allow them to get rid 

of some expenses that allowed them then now to become the profit 

of the world or the envy of the world for the provision of freight 

movement that they provide. 

Mr. WILLIAMS. Do you foresee any time soon being profitable? 

Mr. BOARDMAN. Not on the long-distance trains. When you look 

at covering our operating costs, if you were driving a bus up our 

railroad and did not have to pay for what is underneath, you would 

make a profit, and that is how we are talking about we are making 

a profit on the Northeast Corridor. 

Mr. WILLIAMS. Well, I appreciate you being here, but in the private sector world and the business world, if your expenses are more 

than your income, you are not making a profit. I appreciate your 

being here. 

Mr. BOARDMAN. Yes, sir. 

Mr. WILLIAMS. I yield back. 

Mr. DENHAM. Thank you. 

Ms. Brown. 

Ms. BROWN. Thank you. 

First of all, Mr. Chairman, I want to thank you for having this 

hearing, and I am looking forward to the Transportation Committee going on the road to hear from our stakeholders. 

Our freight rail is number one in the world, and everywhere I 

go, people are asking us about the freight rail, but I am asking 

them about their passenger rail because they move their people, 

goods and services, and they do not have the congestion that we 

have on the road. They do not have the pollution that we have, and 

as I said over and over again, we started the train systems in the 

world, and now we are the caboose, and they do not use cabooses 

anymore. 

And I would like for you all to respond because constantly we are 

talking about the long-distance services, and I keep saying we have 

got to think out of the box. When we had Katrina over 3,000 people 

died, and the buses went underwater because we were not able to 

move people. 

So it is not just profits. Government is just not in there for the 

profit. We are in there for service, service, service, and I would like 

for you to respond to how we can have service because there is no 

form of public transportation or rail that is not freight that makes 

a profit in the world, and their freight does not make a profit. 

Whether I am in Russia or wherever I am, they are asking me 

about the freight, but the reason why it does not make a profit is 

23 

because it is separated, and I would like for you to respond to it 

because there is a lot of education that needs to go into making 

sure people in this committee understand what we are talking 

about. 

Mr. BOARDMAN. Well, if I could start, Congresswoman. 

Ms. BROWN. Yes. 

Mr. BOARDMAN. I would tell you that we have had many foreign 

railroad executives and others come look at our Northeast Corridor 

and our vision on the Northeast Corridor, and we stand behind nobody in provision of services and revenues that we generate and 

the profile of our riders. 

Since 2000, the ability for us to really provide more service than 

any of the airlines put together in the Northeast Corridor was a 

major turnaround, and when the British and when SNCF and others came over here to look at, and even the Japanese, to look at 

what we were doing to increase revenues, they were, in fact, saying 

that our estimates for what we could really provide for the future 

were probably very conservative, and we were trying to be very 

conservative in how we would do this for the future. 

But the Northeast Corridor with 40 million people living within 

40 miles of the corridor is probably a service that does not exist 

anywhere else just like it in the world because it supports the economy of the Northeast, more so than anybody in Europe could understand. Seventy percent of our ridership are business people on 

the Acela, and about 40 percent on the regional services. In Europe 

it is about 40 percent for business people. 

Ms. BROWN. And the part that really gets me is Members think 

that we can go into the Northeast Corridor and say we are going 

to do it this way, not understanding that there are many communities, many States that have come together, and that is the Northeast Corridor. 

I know we think we are the big dog, but we are not the only one 

in the room. 

Mr. BOARDMAN. That is exactly right, and you know, I was going 

to say earlier we lost $5 million over this weekend in revenue and 

fares because of this shutdown in Connecticut for service. So just 

the service between New York and Boston was about $5 million. 

Ms. BROWN. Yes, and the others? Anyone else want to respond? 

Mr. KUTROSKY. Yes, if I may, Ranking Member Brown. 

On the Capitol Corridor, we have developed, talking about service—— 

Ms. BROWN. Are you talking about California now? 

Mr. KUTROSKY. In California, we have developed a public-private 

partnership with our host railroad, Union Pacific, and what we do 

is we jointly develop our schedules with theirs. They have—— 

Ms. BROWN. That is taking the freight off, right, so you all can 

jointly use it. 

Mr. KUTROSKY. Exactly. We use it together with them, and their 

needs are getting shipments in and out of the Port of Oakland, 

which our trains just happen to have a station nearby there so 

there is a lot of joint use and shared use of these tracks. 

And through our partnership working with them, we have been 

able to invest jointly in capitalized maintenance programs, as well 

24 

as keep our service as one of the highest as far as on-time performance. 

Ms. BROWN. How about this positive train control? How is it affecting you all? 

Mr. KUTROSKY. It has not affected us yet. There in California the 

focus right now is in the L.A. Basin, but working with Union Pacific, they said the second they are gone after L.A. is up on the 

Capitol Corridor because, once again, we have about 30 to 40 

freight trains a day mixed in with our 30 trains a day. So it is a 

positive performance. 

The other thing I would like to just hit on really briefly is when 

we talk about the communities in the Capitol Corridor, our $60 

million annual investment comes to the equivalent of about $170 

million in economic positive impacts for the communities up and 

down our corridor. So you have the private sector and then you also 

have your communities, and we feel as though we are, as President 

Boardman was talking about, the conductivity, we help to provide 

that through Northern California. 

So thank you very much for allowing me that opportunity. 

Ms. BROWN. The last person. 

Mr. CAPON. Yes, a couple of points. One is that on the Northeast 

Corridor, also to Mr. Hanna’s point, I believe that one is transit 

Amtrak operates eight or nine cars, and by European standards 

that would be short. So I think, you know, Amtrak has put out a 

vision of a much higher capacity railroad, and that would be the 

basis, and it would probably have a lower operating loss as well 

with a much higher volume of passengers. 

Also to elaborate on the point about one of the benefits of the 

long-distance trains keeping the infrastructure in place, Virginia 

Railway Express, the Tri-Rail commuter rail in Miami, and the 

Washington-Richmond service that Amtrak operates, all of those 

are possible because the New York-Florida trains never stopped 

running. When Amtrak was created, none of those three services 

I named existed, and the Architect of the Capitol had his eyes on 

the First Street tunnel to take it away from the railroad. 

So one of the benefits of the long-distance trains is keeping that 

infrastructure in place, and I would also like to emphasize in terms 

of States and cities working to support long-distance trains, there 

is a lot that is happening not in terms of the operating cost, but 

in terms of developing modern intermodal stations. The most famous one is probably in Meridian, Mississippi, which Mayor John 

Robert Smith championed, but there are many other examples, 

Champaign, Illinois, of wonderful intermodal stations that have improved the economics of the long-distance trains even though they 

are not in the sense of Section 209. 

Ms. BROWN. Thank you. 

Mr. CAPON. Thank you. 

Mr. DENHAM. Thank you. 

And Mr. Hanna has entered information for the record. Without 

objection, so ordered. 

[The information follows:] 

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26 

Mr. DENHAM. Just a couple of followup questions. 

Mr. Boardman, following up on Mr. Radel’s question about the 

union negotiations, my understanding, the majority of the unions 

have entered into an agreement with a 15 percent increase in salary, and there are two unions that are still holding out for a higher 

increase than that 15 percent. Can you explain if these final two 

unions are settled at a higher rate what happens to the other 

agreements? 

Mr. BOARDMAN. Sure. What we are really talking about here is 

a 5-year contract. This is not a 1-year, 15 percent. 

Mr. DENHAM. Right. 

Mr. BOARDMAN. We have under the Railway Labor Act a situation where we have to continue to allow the National Mediation 

Board to mediate with these unions until they release them. If they 

release them, then the decision for this goes to a Presidential 

Emergency Board so that a decision is not reached if it is not 

reached by us. It actually gets decided upon by a President’s Emergency Board, which is the way much of the past has happened for 

Amtrak. 

Mr. DENHAM. My concern specifically is about the ‘‘me, too’’ provisions. You continuously talk about running as a business and 

more like a privatized business, but yet this is one of those costs 

that are outside of your control. If the ‘‘me, too’’ provision goes 

through, if this is a higher negotiated contract than what the others have already agreed to—— 

Mr. BOARDMAN. It is a pretty typical thing with all of the unions. 

We have got 13 different unions, 24 different contracts. They all 

want that kind of provision. So it kind of goes up all the way 

through the process. It took a long time to finish off the negotiation 

with the most recent one that we finished because of that provision. 

But that provision then does cost us a substantial amount of 

money. I do not have what that is right this minute, but that would 

be decided also by the President’s Emergency Board. 

Mr. DENHAM. Can you provide this committee the different scenarios that you are look at? I think you have concerns from members of this committee I would say on both sides of the aisle that 

a 15-percent increase at the time that we are doing furloughs and 

layoffs and sequestration and cuts, 15 percent is probably—— 

Mr. BOARDMAN. Well, it has already occurred for all of these 

unions. 

Mr. DENHAM. No, no, no. I understand, over a 5-year period. 

Mr. BOARDMAN. Yes, sir. 

Mr. DENHAM. But if the two remaining, as I understand it, if the 

two remaining unions are able to negotiate a much higher level—— 

Mr. BOARDMAN. They are not going to be able to negotiate a 

higher level. It will be at the PEB. 

Mr. DENHAM. So you are not concerned right now that your costs 

will go up because of something that is outside your control? 

Mr. BOARDMAN. Well, because it is in mediation already. So it is 

mediation at this point in time. The mediators are working with us 

on this. If they cannot get this worked out in a way that is acceptable to us and acceptable to the unions, then it goes to the President’s Emergency Board. 

27 

Mr. DENHAM. But the ‘‘me, too’’ provision does allow that if it 

goes to the President, if it does—— 

Mr. BOARDMAN. They can make that decision as well, President’s 

Emergency Board. I am sorry. I do not mean to step ahead of you. 

Mr. DENHAM. So there is the potential with the ‘‘me, too’’ provision. Say the President and his administration agrees to a higher 

amount. That also gets translated to everybody else that has already negotiated terms. 

Mr. BOARDMAN. Yes, but it is not just that. They can decide a 

higher rate on anything or everything or they can decide a lower 

rate as well. 

Mr. DENHAM. OK. Thank you. 

We are about out of time. We have called votes already, but I did 

want to get to a couple of brief final points. 

Mr. Boardman, last hearing I know we asked a lot of you. I know 

that you have come in here several times. It is always good to see 

you, and we have a number of different issues that we want to address in the future. We will try to do the majority of that through 

correspondence, but one issue that is still hanging out there, the 

April 11th hearing that we had we asked you for a number of different questions. We are still waiting to get that information back. 

That will help us to alleviate future hearings, as well. 

Mr. BOARDMAN. I thought they were back. I will check on that 

immediately. 

Mr. DENHAM. Thank you. 

And just one final question briefly to each one of you. This kind 

of gets to the crux of our overall questioning. How big of a subsidy 

is enough? 

So we have got to look at the entire rail passenger network and 

whether we go to a 209 type process for the long-haul routes. We 

need to come up with a what is fair for the American public. And 

so I would ask each one of you: what type of subsidy per passenger 

would be, in your minds, fair for the American public to absorb to 

keep these long-distance routes in place? 

Mr. Puentes. 

Mr. PUENTES. It is tough in the abstract, I think, to come up 

with a precise number. I would say though that I would love to see 

the States and the Federal Government work together and decide 

between them in a negotiated manner how much the States would 

want to pick up. I think on the Federal level it would probably 

have to be pretty uniform, but then it is up to the individual States 

to decide from their own resources how much of the system that 

they like to subsidize that way. 

Mr. DENHAM. Thank you. 

Mr. Boardman. 

Mr. BOARDMAN. I think that it is difficult to figure that out. I 

think that is one of the things Congress does really need to help 

us with. What does Congress want to invest in this connectivity 

across the country? Because I think it is largely you are talking 

about the long-distance trains more than anything else, and it is 

a very tough business model, depending on how many people get 

carried in that train and a different part of the season. 

So I do not have a number for you, but I do understand what 

you are trying to get at. 

28 

Mr. DENHAM. I am trying to get at your biggest cost drivers, the 

places that are outside of your control that cost you the greatest 

amount of expense or headache. 

Mr. Kutrosky. 

Mr. KUTROSKY. Yes, Chair Denham. For us in California, our 

money is given to us through the Governor’s allocation to us, and 

it has performance standards. So we have to meet those performance standards, and our subsidy is 50 percent. 

Having said that, I believe I concur with President Boardman. I 

think it is up to Congress to help us look at it from a systemwide 

perspective, maybe on a passenger-mile basis, and I am talking 

about all modes, to figure out how to level the playing field, so to 

speak. So I think that is something that everyone can understand 

if you look at it on a passenger-mile because you are looking at the 

metric of the person traveling, be it either mode, but I believe that 

would help understand what the true costs are for each model. 

Mr. DENHAM. Mr. Capon. 

Mr. CAPON. In terms of total costs, I would say that the Revenue 

and Policy Study Commission that President Bush appointed came 

up with a recommendation in the order of $8 billion to $9 billion 

a year. 

In terms of net cost per passenger-mile I would say probably 

should be less than 40 cents. I would like to have the opportunity 

to submit some comments for the record in response to some of 

these statements made today, particularly about the Sunset Limited. 

Mr. DENHAM. Thank you. 

And I just want to state my personal goal in this is not to eliminate the long-distance routes. It is just to make them more efficient, to lose less money and make sure that we have got a national rail network, but do not do it as an expense. Let us make 

good decisions. Do we need to make a stop at 2 in the morning 

somewhere where nobody is getting on? Do we need to subsidize 

some of these routes $404 per passenger? Should the rest of the 

people around the Nation have to subsidize that? 

Or even in my home State, $182 per passenger for the Zephyr 

route, and I mean it goes on and on. There are some huge expenses 

with those subsidies. We have big challenges with infrastructure, 

with upgrading infrastructure, especially on the Northeast Corridor. 

If we are forcing you, if Congress is forcing you to take all of your 

profits off of the Northeast Corridor and then subsidize the rest of 

the Nation and do that on top of the subsidy that is coming from 

Congress, you will never get an opportunity to repair the rail and 

the bridges that you need to put into. 

So we want to work as a partner with you to not only get this 

new passenger reauthorization bill done, but get it done right and 

more efficiently, especially in today’s huge deficits we are seeing 

from the Federal Government. 

Any final words, Ms. Brown? 

Ms. BROWN. Yes. Mr. Chairman, I think you asked a good question. What are fair subsidies? And I would ask what is fair for 

highway, what is fair for aviation, what is fair, period? 

29 

But, Mr. Chairman, I would like to definitely make a written 

statement concerning long-distance transportation costs per passenger, and I want to make sure I put that in the record because 

Mr. Mica made comments about the auto train losses and talked 

about Sanford, which is one of the most profitable routes that we 

have, moving people off of the highway and providing services. 

But I think I got a positive recommendation. I would recommend, 

as we have done in the past, to have a round table discussion with 

labor and call them in to discuss the issue that you raised today 

about, you know, the negotiation, and I think that we could call 

them in and talk to them about where we are. I mean, I think that 

sounds like a bipartisan recommendation. 

Mr. DENHAM. It sounds bipartisan to me. 

The votes have been called. We are going to have to cut today’s 

hearing a little short. 

I would ask unanimous consent that the record of today’s hearing 

remain open until such time as our witnesses have provided answers to any questions that have been submitted to them in writing and unanimous consent that the record remain open for 15 

days for additional comments and information submitted by Members or witnesses to be included in the record of today’s hearing. 

Without objection, so ordered. 

I would like to thank our witnesses again today for their testimony. If no other Members have anything to add, the subcommittee stands adjourned. 

[Whereupon, at 2:43 p.m., the subcommittee was adjourned.] 

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