US rails: what destination?

The Reagan administration has taken a long overdue politically courageous step in seeking to cut back the heavy federal subsidy now propping up Amtrak (National Railroad Passenger Corporation) and Contrail (Consolidated Rail Corporation). Conrail is the deficit-ridden freight system operating essentially in the Norheast and midwest US; Amtrak is a nationwide passenger system.

The administration is proposing that federal support for Amtrak be slashed in fiscal year 1982 -- to $613 million, compared to the $850 million sought by the carrier to maintain current schedules and equipment. For Conrail, the administration plan is even more severe. Mr. Reagan would scrap the system by selling its most profitable routes (including the few passenger runs it operates) to private operators. Transportation Secretary Drew Lewis has talked of 1983 as the target date for ending US aid to the Contrail System. Meantime, the administration is proposing a $300 million appropriation for fiscal 1981, with a halt in funds after that.

Clearly, the time is at hand to reexamine the lavish financial commitment to the two US taxpayer-supported rail systems. Both carriers have imposed heavy financial drains on the Treasury, Conrail alone to the tune of well over $3 billion since its creation in 1976 following the bankruptcy of the Penn Central railroad. But, in acknowledging this, no one should overlook that any sudden federal pullback from either system could entail considerable economic risks for those parts of the US most dependent on their continuing services -- not to mention the possibility of substantial inconvenience to passengers for whom rail travel is the primary (or only) transportation service.

And, for all of their massive costs and many problems, both systems have largely filled the public needs for which they were created. Amtrak has logged steadily increasing ridership, channeled investment into new equipment and tracks, and shown improvements in on-time performance schedules. Conrail remains the nation's second largest US freight carrier. Both federally funded systems were put in place because privately owned carriers were financially unable, or unwilling, to provide the essential rail services.

For precisely these reasons the administration and Congress should go ahead with the pullback from the two rail commitments with the most careful deliberation, keeping in mind those passengers and business firms that are now dependent on the carriers. Once the systems are ended, they could only be put back together again (if that proved to be necessary during the years ahead) at even greater cost. So it is to be hoped that the government (and particularly Congress, given its constitutional role here) will seek to ensure that the vital rail links served by both systems are absorbed wherever possible by private carriers.

Now, to take a closer look at each systems:

Amtrak. The US should gradually pull back from all route structures except the heavily traveled "corridors" such as Washington to Boston, St Louis to Milwaukee, Chicago to Detroit, and possibly San Francisco to Los Angeles.

Alan Boyd, Amtrak's president, has argued that if the proposed 1982 Reagan cuts are adopted the carrier would not be able to operate routes outside of the Washington-Boston corridor, which makes up half of the system's ridership. That would mean a shutdown by Oct. 1 of service in 36 states serving over 500 communities.

This is where congressional review becomes so important. Congress should not be politically timid to scrap marginal service outside of the major population corridors. But at the same time it should help prod the administration (and Amtrak) into encouraging new intercity and interstate busm transportation routes to absorb the reduced rail routes. Buses, after all, are among the most energy-efficient carriers. Bus firms should be more aggressive in publicizing the advantages of their system -- given the widely held assumption that buses are used just by "poorer people" and should be shunned by middle-class and upper-income Americans.

Conrail. Even administration officials concede that it will not be easy to get the US quickly out of its Conrail commitment. In fact, L. Stanley Crane, chairman of Contrail (and a former chairman of a private carrier), prefers to turn the system into a moneymaking operation before it is sold. Not to do so, he argues, could destroy the overall track system (since presumably few buyers would want to buy an unprofitable operation). Phasing out the system before this rebuilding process, he argues, would injure local economies.

Congress and the administration should therefore be flexible in devising a timetable for closing out Conrail. The administration's military budget, for example, is based on long-term, multiyear goals. The same process should apply to ending conrail with the least disruption. Meantime, Congress should take legislative steps to reduce feather-bedding in the system's payroll while seeking to terminate as quickly as possible its passenger runs in five Northeastern states.

The administration is on track in its overall policy for Amtrak and Conrail. The public will be best served if Congress adjusts the throttel caref ully in meeting those goals.

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