Amtrak’s $16 burger: If the US oversees health care like it does trains, there’s trouble ahead
When is a hamburger not just a hamburger? When it costs Amtrak $16 to make. They sell it for $9.50, and taxpayers cover the difference — every time. Then it becomes a glaring symbol for spiraling costs, crippling deficits, and the inherent inefficiencies of big government.
Thirty years ago, the idea of Amtrak losing money on food sales was as outrageous as it is today. (Hungry customers on a moving train with nowhere else to go. How hard can it be?) In fact, it was so outrageous that Congress passed a law against it. The Amtrak Improvement Act of 1981 prohibits the government-owned company from selling food at a loss. Nice try. Today, Amtrak is selling more and losing more than ever before.
This month the Government Accountability Office reported that losses on food service exceeded $80 million last year and totaled $834 million during the past decade. Auditors blamed the staggering losses — most of which occur on Amtrak’s 15 long-distance routes — on waste, theft, and lack of oversight. That’s only a fraction of the total losses from long distance operations, but it’s real money nonetheless.
For many of Amtrak’s congressional overseers, a $16 hamburger is a juicy target — an opportunity to grill the company’s managers and rake the bungling operation over the coals. Rail boosters, meanwhile, will rush to the usual defenses — that these are simply the costs of maintaining passenger rail, that the services are essential, and that scaling back Amtrak means scaling back jobs.
During congressional testimony, Amtrak CEO Joseph Boardman tried to explain that, if Amtrak didn’t lose so much selling food, fewer people would ride the trains, and the company would lose more money on operations. Such tortured logic makes for a bad business plan. Ridership did reach a record last year, a 5 percent increase over 2010. Unfortunately, operating losses rose by 20 percent, cresting above $500 million.