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Secretary LaHood: People that Ride Trains Know People Like Trains

Samuel Staley
May 9, 2011, 10:22am

U.S. Department of Transportation Secretary Ray LaHood was on CNBC's Squawk Box this morning making the case for high-speed rail and Amtrak. The Obama Adminsitration announced $2 billion in additional grants to Amtrak and 15 states to upgrade their passenger rail networks. The seven and a half minute video likely captures the best spin the Administration has on high-speed rail.

Among the "money" quotes:

Unfortunately, the Secretary was wrong on several facts, including the one that Amtrak made money last year. Assuming he is referring to the 2010 fiscal year, which ended September 30, 2010, Amtrak had a net loss of $1.3 billion (up from $1.2 billion in FY 2009) according to its Audited Consolidated Financial Statements-Fiscal Year 2010. It's net loss on operations was $1.2 billion in FY 2010 (although it generated revenues of $2.5 bililon).

I believe Secretary LaHood was referring to the Northeast Corridor, which includes the medium-speed Acela line. Reportedly, this line covers its operating costs, but not its capital costs. But, that's one line along the highest density corridor in America (by a long shot). The ability to replicate this success elsewhere is highly questionable given U.S. development patterns, employment concentrations, and residential densities.


Samuel Staley is Research Fellow


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