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Joe Biden's Amtrak Albatross: POTUS rails against budget cuts for service that struggles to make any money

Amtrak's operations, partially funded by route revenues, have consistently faced budget deficits covered by state and federal subsidies

WASHINGTON, DC: House Republicans postponed the vote on a pivotal housing and transportation government funding bill last week, citing concerns within the party about proposed cuts to Amtrak's budget.

This unexpected move appeared to infuriate President Joe Biden, a fervent Amtrak advocate, who recently unveiled over $16.4 billion in federal investments for rail travel.

During a visit to a train maintenance shop in Delaware on Monday, November 6, President Biden, bragged about the significance of the proposed improvements along the Northeast Corridor, stating, "We're finally getting it done," reported CNN.

The subsequent budgetary roadblock prompted the President to express his displeasure on social media.

Joe Biden expresses frustration over slashing Amtrack's budget 

"MAGA Republicans in Congress are proposing to slash Amtrak’s budget. We're trying to make train travel easier, faster, safer, and more reliable. They're trying to make it slower, harder, and less safe. You can't make this stuff up," the president's account posted on X (formerly Twitter) on Sunday, November 12.

However, the backlash against Biden was rather swift.

"MAGA republicans are trying to prevent your rampant spending that is making this country broke," one responded on X. "Amtrak is a for-profit corporation, why are taxpayers paying 16 billions for Amtrak can make more profit?" another wrote.

"Only 87,000 passengers ride more than 300 Amtrak trains daily. Most Americans will never depend on it. Why isn't it funded by the localities that use it most?" a comment read.

"If Amtrak can’t survive at this stage, let it die. Almost like a 56 yo son needing daddy’s influence in order to make a living," someone else offered.

"You have people roaming the streets in every city across the United States, tearing down American flags while toting the ISIS flag and you’re here running off at the mouth about “mAgA rEPuBliCaNs”. You can’t make this stuff up," another added.

Historical challenges and financial realities of Amtrak

It's worth noting that throughout its existence, Amtrak has reportedly never turned a profitable year. Its operations, partially funded by route revenues, have consistently faced budget deficits covered by state and federal subsidies, according to Berkeley Economic Review.

Established in 1970 after several railroads, including Penn Central, went bankrupt, Amtrak was reportedly intended to become self-supporting but has consumed over $50 billion in federal subsidies until 2020.

In fiscal year 2021, Amtrak reported revenues of $2.1 billion, expenses of $4.1 billion, and a $2 billion loss.

The pandemic reportedly exacerbated financial woes, leading to a $3.7 billion aid injection in 2020 and 2021. The 2021 Infrastructure Investment and Jobs Act injected a massive $66 billion into rail subsidies, including direct funding for Amtrak and state grants.

The persisting question arises: Why has Amtrak never been profitable? Beyond financial hurdles, the sheer size of the United States, spanning over 2,000 miles, poses challenges for train travel, making it less feasible than air travel, as per the outlet. 

Moreover, political affiliations play a significant role, with opposition from figures connected to the oil and car manufacturing sectors hindering progress.

Advocates argue for a shift in perspective, invoking the concept of induced demand. They propose that expanding routes, offering cheaper tickets through subsidies, and improving overall supply could increase demand for rail travel over time.

Despite financial struggles, Amtrak's routes reportedly generate between $7 and $8 billion annually in economic activity, a noteworthy return on the government's investment.

In addressing the economic impact, it's crucial to recognize that, despite Amtrak's financial challenges, the company's routes play a vital role in generating economic activity.

Even though Amtrak's long-distance operations may appear to bleed money, they serve as vital connections between small towns and major cities, fostering economic growth along the way.

Beyond financial considerations, advocates emphasize the societal advantages of Amtrak, particularly in the realm of job creation.

According to the USDOT, a $1 billion investment in public transportation creates approximately 36,000 jobs, offering a potential solution to the evolving job market and increasing automation.