Biden Threatens to Veto ‘Cut’ in Amtrak Subsidies

“Amtrak Joe” Biden is doing what he can to earn his nickname by threatening to veto Republicans’ plans to “cut” funding to Amtrak to near-historic highs.

Working its way through the GOP-controlled House of Representatives right now is H.R. 4820, a housing and transportation appropriations bill that would provide Amtrak with $867 million in grants for the coming fiscal year.

That’s hardly chump change. Yet the White House has condemned the subsidy as woefully insufficient.

On Monday, the White House’s Office of Budget and Management (OMB) released a statement criticizing the various cuts proposed by House Republicans to housing and transportation programs.

OMB specifically attacked Republicans for their proposed 64 percent “cut” to Amtrak from last year’s $2.4 billion subsidy. The reduction “would reduce or potentially eliminate certain Long Distance and State Supported services and risk operations and critical capital expenses on the Northeast Corridor,” reads the OMB letter, which threatens a veto of the Republican spending bill as written.

The Transportation Trades Department of the AFL-CIO went even further in decrying Republicans’ “draconian” cut that “would devastate existing operations and jeopardize more than 10,000 jobs.”

It’s true that the House’s bill proposes a steep year-over-year cut from Congress’ last annual appropriation. Republicans’ proposed $867 million is also below the roughly $2 billion in subsidies that Amtrak was historically receiving before the pandemic. It’s less than the Senate’s competing funding bill that passed yesterday with wide bipartisan support, and which gives the company $2.5 billion for the upcoming fiscal year.

Missing from the White House’s dire warnings about cuts is the fact that Amtrak’s annual appropriations are now supplemented by generous yearly grants of $4.4 billion from the Infrastructure Investment and Jobs Act (IIJA) that passed in November 2021.

When the IIJA money is considered, Amtrak received not $2.4 billion in subsidies in FY 2023 but $6.8 billion. Even if Congress completely zeroed out Amtrak’s annual appropriations, the company would still receive that $4.4 billion in IIJA funding.

“Republicans and Democrats are saying this is a historic cut. No, it’s not. The funding for Amtrak is double what it was pre-pandemic, regardless of what appropriators do,” says Marc Scribner, a transportation policy analyst at the Reason Foundation (which publishes this site).

And the Amtrak services threatened by Republicans’ “cuts” would be planned long-distance routes that are projected to lose money in perpetuity, says Scribner.

As it stands now under Republicans’ allegedly austere proposal, Amtrak would receive a little over $5 billion in funding this coming fiscal year. The Democratic Senate’s FY 2024 appropriation for Amtrak would give the company closer to $2.4 billion—or $6.8 billion once IIJA funds are included.

Despite receiving historically high funding over the past several years, Amtrak’s ridership remains below historic levels. Amtrak CEO Stephen Gardner told a House subcommittee back in June that as of April 2023, ridership was 84 percent of 2019 levels and ticket revenue was 95 percent of 2019 levels.

“I don’t think it’s in the public interest to support Amtrak. We generally expect the other modes that Amtrak competes against to operate self-sufficiently, and I think Amtrak should as well,” says Scribner.

Originally published by Reason Foundation. Republished with permission.

For more great content from Budget & Tax News.