If You Support Government Subsidies for Amtrak, You Can Pay Less to Ride the Train

I received an email this morning offering bonus points and a 10% discount on train travel when you join the National Association of Railroad Passengers.

Now, the National Association of Railroad Passengers is an advocacy organization founded to lobby for train subsidies.

And Amtrak is owned by the federal government.

Whatever you think of government funding for train travel in the United States, is it problematic that a government corporation will give people discounts if they pay to join an organization that will lobby the government for more subsidies?

Put another way, Americans who pay to support more subsidies get charged less to travel on subsidized trains than those who oppose the subsidies. Two classes of citizens, based on political beliefs, when riding the train?

What do you think?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Gary,

    They give the same discount to AAA, which seems to go against the beliefs of NARP? Maybe they balance each other out? I would bet good money that vastly more people claim the AAA discount than the NARP one .

    P.S. They also have a NARP booth (unstaffed) at Union Station.

  2. The government should not be subsidizing our lives. Yes it will cost more in some cases to travel but I don’t see why a farmer in Ohio should be paying taxes so I can get a cheap ride to NYC.

    I also don’t see why a family in Texas should be paying taxes so the farmer in Ohio does not grow crops.

  3. Typical big govt with one hand not seeing the other. I love Amtrak but to me it’s like public tv. It should and can support itself.

  4. Dan,

    Amtrak is like the Post Office. It’s a private entity, and yet it’s hamstrung by the gov’t. It’s long distance routes lose plenty of money and yet Congress won’t allow them to be cut because no Senator wants to be the first elected rep from Montana to lose train service in over 150 years.

    If you want the public good to go where it does the most good, then you need to pay for it.

  5. @Graham – Amtrak is not a private entity, its shares are 100% owned by the federal government. But again, your view on subsidies aside, my question was about a government-owned corporation giving discounts to those who pay to support more government subsidies for it.

  6. @Gary – I get it. It seems wacky. I guess I was making the point that the AAA discount helped offset it. But I wonder how effective the NARP is? I’m all for them dropping the discount.

  7. Well there’s nothing stopping you from donating to the carbon blasting league or whatever to register your objection as a form of counter speech. Really most corporations engage in lobbying (and arguably self dealing) and when you wipe your a55 with Koch brother TP for example you’re supporting all kinds of lobbying for tax breaks and favorable regulations, which in turn makes for cheaper TP. Amtrak gets it from all sides (can’t compete and engage in effective lobbying, and is smacked down for even trying) and it’s kind of a shame…

  8. @Secretary Toaster – I’m not sure your comments are especially responsive to the post. Here’s what I would ask you to consider.

    1. You give an example of buying toilet paper, supporting lobbying which reduces the price of that toilet paper. What lobbying specifically, for what legislation, does this refer to?

    1a. What does private sector lobbying have to do with the question at hand, using government funds to lobby for more government funds?

    2. In the original post I suggested that the issue of subsidies was an entirely different matter altogether. What the post focuses on is whether government money ought to be used to reward those who support more subsidies? It’s generally illegal to use taxpayer funds to lobby for more taxpayer funds, but in this case I’d imagine that calling it a discount and using a third party circumvents legal restrictions. The question is, is it appropriate for a government corporation to charge less to those who support subsidies for it?

  9. It sounds like the same logic by which people who benefit and support from Democratic/Republican policies can choose to elect more Democrats/Republicans. But you’re right, this is pretty blatant. I wouldn’t mind so much if NARP is paying for these discounts out of its own membership fees (and assuming those fees aren’t supplemented by Amtrak’s own money).

  10. Amtrak was created specifically so that these government owned assets would behave more like a business. Like every other business, they lobby for favorable government treatment.
    .
    Should they behave LESS like a business?
    .
    (Actually, they already behave less like a business, since they also extend these benefits to members of the AAA — an organization intended to lobby AGAINST the interests of the train-riding public.)
    .
    There are considerably more egregious examples of unfairness in the travel-points world than this one.

  11. NARP buys the AGR points from Amtrak just like any other marketing partner. Amtrak gives NARP members the discount like they give AAA members a discount in return for some promotion by those organizations. The discount comes with limitations, notably that tickets must be purchased at least three days in advance of travel. No aspects of the business relationship are different than what Amtrak does with other marketing partners, or that airlines do with their marketing partners.

    For those who want to talk about subsidies, you know that every time you drive your car, you are being subsidized. Local roads are paid for mainly by property taxes, and fuel taxes don’t come anywhere near the cost of maintaining highways. Buses and trucks are subsidized on those roads, too.

  12. Yeah I mean Amtrak isn’t really a public corporation. If it was, then it could regulate / legislate itself, and obliterate any competition (airlines, buses… any other common carrier). But it doesn’t because that would be SOCIALISM and we all agree that’s evil.

    And what does this have to do with private sector lobbying? Well… I would say that there’s not a whole lot of real difference between Amtrak and private corporations, at least those that operate on a large enough scale. Because every corporation takes best advantage / lobbies for tax breaks or favorable regulations (while helping write them), and while not always a zero sum, when it comes to the national treasury, or to certain environmental concerns, someone (the taxpayer) loses. Just like how you don’t like what Amtrak does here, assuming that it foots the bill for the discount.

    As far as the toilet paper and (unfortunate) example of the right-wing-bogeyman, written while I was on the train this morning, while I’m not versed in any specifics, I would say that I draw an inference that CEOs of corporations don’t spend millions of $$$ lobbying / spending on our elections because of personal vanity, or because they care that a certain political candidate might be fun to go out with to have a beer.

    Look, I concede that you make a very interesting point and it is WEIRD that this is happening, but I think it’s just a symptom of a rich history of weird fictions that have created this mess.

  13. I assume that AAA pays for the privilege of having discounts for their members, and that NARP does the same. If this is a discount that other organizations can pay Amtrak to offer their members-for an upfront fee-it shouldn’t be a problem.

    Of course, Amtrak is also regulated by the federal government and it pays fines (to the General Treasury Fund) when it has safety violations. Not all inner workings of the gov’t work together.

  14. Gary I fully agree with you but this is small potatoes. Consider that groups that strongly supported Obamacare, such as the Unions, have been granted waivers from costly Obamacare requlations. Those who opposed Obamacare are on the enemies list, and won’t get the waivers. The increased cost to businesses of Obamacare is far greater than 10% of an Amtrack ticket !

    Perhaps worse than that is that in exchange for paying for pro-Obamacare ads, the Pharma companies got an exemption from government negotiated prices for their drugs. GE promoting so called “climate change” on it’s subsidiary NBC, then getting hundreds of millions of dollars in government grants and tax exemptions for “green” projects also comes to mind. I’m not sure where the dividing line is between crony capitalism and out and out economic Fascism, but I think we’re getting very close.

    The ultimate example, of course, are the government employee unions, that force government workers to pay dues, then use those dues to contribute to politicians who vote to increase the wages and benefits of those union workers. This being the very reason even FDR was opposed to government employee unions.

  15. @Robert Hanson – Guy, do you just copy and paste that text on hundreds of blogs a day? We’re not talking about anything that you’re talking about. Though if we wanted to play Kevin Bacon sort of, there is an awesome railcar underneath the Waldorf in NYC on a private platform that was used by FDR.

  16. It is a sad phenomena, but we should be used to it. The government already buys votes through subsidization in similar ways. For example, I’ve seen some prominent politicians campaign aggressively to college students promising to lower their costs of borrowing (subsidize their education while ironically driving up the market cost of education in the process) in exchange for support of their candidacy/platform.

  17. Nothing new,no scandal. Amtrak has given discounts to AAA, NARP, seniors, military, students, for decades. You can choose your discount you’re entitled to when you buy the ticket.

    For Democrats or Republicans, it doesn’t matter, Amtrak is an American gem, just like our national parks. It is the only way to see our great country and to meet to meet fellow Americans from all walks of life. I’ve taken all other modes of travel across the country (even bus!) and there’s nothing else that compares.

    For me, I’m perfectly OK with paying taxes to subsidize rail service. Cut a little from our foreign aid if needed. No apologies for supporting Amtrak from me, but since this seems to be conservative blog, I would recommend reading the articles at the Center for Public Transportation, part of The American Conservative’s website for a conservative opinion on rail passenger service for America.

  18. I think it’s best if we stick to focusing on travel, and leave the politics to the hard of listening and generally hard of thinking on the left and on the right.

    I despair of the citizenry of the USA ever having a meaningful debate on rail travel (or healthcare for that matter) and suggest we all stick to the line of refusing to enter battles of wits with unarmed opponents.

    As for the original premise, I don’t think Amtrak should work with this organization as a marketing partner just because they have other marketing partners. There are limits and this should be one of them. I think it’s a conflict of interests.

    tl;dr – just because they can, doesn’t mean they should.

    Many fellow Americans in many circumstances could sprinkle the wisdom in *those* words more liberally, however.

  19. So, the logic is that if you are a lobbying organization that is lobbying FOR a government-sponsored organization, you should not be able to offer any kind of reward that involves that organization. But if you are lobbying AGAINST it, you are free to do so?

    Or, to put it another way: I guess the groups that lobby for increased NASA funding shouldn’t be able to offer discounted tickets to the NASA space flight museum, Cape Canaveral, and so forth. But the groups that oppose all spending on space flight should be able to do so?

    Not to mention the fact that there are lots of private companies that get the majority of their funding from the government. Does that mean that they shouldn’t be able to lobby the government for redress of grievance? I see a lot more problem with (say) a petroleum company lobbying for another $6b in tax breaks and subsidies than I do in Amtrak the Chronically Underfunded lobbying for another million or two.

    I agree, there are some ethical concerns when this sort of thing is taken too far. But I think choosing to fixate on *this* of all things…

  20. I think the premise that NARP’s purpose is to lobby for subsidy for Amtrak is an oversimplification of what it is. That’s no different than calling the Business Travel Coalition a group that lobbies on behalf of aviation subsidy because it supports improving airport and FAA infrastructure to reduce traveler delays. NARP advocates for the betterment of rail passenger service in the USA. At time its perspective is diametrically opposite that of Amtrak’s. They are just another affinity group Amtrak affiliates with as part of its marketing outreach. Not sure there’s any real outrage here.

  21. Government entities cannot lobby for themselves. The NSF, for example, relies on scientists and other university administrators to lobby on their behalf, and many of these folks benefit either directly from NSF funds or overhead paid to institutions by NSF funds. It’s the same situation as with Amtrak, and I don’t oppose it.

  22. By the same reasoning, highway and airport construction and operation should be privatized as well. Interesting how you say nothing about the huge amounts of federal money going into airports and highways.

  23. Translation: If you pay more taxes we’ll give you a discount on your next Amtrak ticket.

  24. Are you prepared to end all road, bus and airport subsidies so we can have a level playing field? I could support that. Until then, targeting Amtrak makes it seem like you support government handouts for your transportation but not mine.

  25. @John @Christopher Parker – who are you referring to as ‘you’? My post wasn’t about the subsidies good or bad, just about giving discounts to customers who support them, and charging higher prices to those that don’t!

  26. I am a long term proud member and former Director of NARP. We are incorporated as non-profit educational organization eligible for 501(c)(3) status. Our reason for existence is to educate friends, relatives, neighbors, business leaders,legislators & other government leaders about rail passenger transportation and its place in our nation’s overall transportation matrix. One particular educational battle we fight is over government subsidies for transportation.

    In a truly free market economy — one in which no person or business of any kind receives any tangible benefits from any level of government — it may make sense to oppose subsidies to transportation providers. Such a “Free Market” does not exist anywhere in the known universe. If it ever existed on earth, it was prior to creation of any form of formal governance.

    In this world, government activities of nearly all types provide tangible benefits to at least some portion of the populace, most often resulting in a Texas farmer helping to provide a New Jersey resident with a new highway, airport or rail passenger service; or a resident of upstate New York helping to provide better subway service in New York City; or a Pennsylvania resident helping to fund a Utah rancher’s federal farm assistance. Now who among readers of this forum would suggest that all of these “cross-subsidies” are unjust, unnecessary or otherwise unacceptable?

    Nearly every religion known to western civilization promotes the concept of helping thy neighbor as thyself. Just how can this nearly universal religious teaching be reconciled with the author’s apparent narrow-minded perspective on the AMTRAK discount for NARP members — or AAA members?

  27. Amtrak continues to be a public whipping target for anyone who doe not understand the transportation needs of a modern society, and particularly those who so proudly declare themselves to be “conservatives”. Yet there exists more than one avowed “conservative” organization that supports demonstrates its comprehension of our transportation needs by supporting a balanced system that includes all modes. Its name escapes me for the moment, but it was founded by a now-deceased Conservative super-star. Why, therefore, is Amtrak — or generically, rail passenger service — seen as a”conservative-liberal” issue.

  28. Apparently, the author doesn’t realize the following facts:

    1) Federal government spends dozens of times more on highways and aviation than it does on Amtrak (the sole entity that virtually represents passenger rail as a mode in the U.S.). While Amtrak receives barely $2 billion per year (of which the majority is capital, not operating subsidy), it spent $34 billion on highways in 2008 alone. Apparently, there is a double standard here when it comes to rail funding.

    2) While NARP’s “lobbying” activity is limited to educating the general public and government officials about the importance of adequately funded passenger rail, oil corporations and auto-makers are generously lobbying the government officials in a real way, i.e. by paying them, which is off limits for NARP as a 501(c)(3) nonprofit organization.

    3) Amtrak is giving discounts not only to NARP members, but to AAA members as well. Perhaps it would be a great idea to get AAA to lobby for Amtrak, but most likely they don’t do that. The only way AAA helps Amtrak is by publishing Amtrak’s promos in their travel magazine. Apparently, Amtrak’s leaderships finds it a sufficient reason for such a discount. So why shoud NARP (which dedicates itself to actively fighting for Amtrak) be in any disadvantage? Surely, Amtrak is under is constantly under financial pressure. But apparently they manage their operating budget well enough to allow such discounts without requiring government to provide any extra subsidies for that specifically.

  29. Some clarification to my previous posting. While there are many (well, not really that many, but still…) commuter/regional rail service providers in various parts of the country, Amtrak is the sole provider of intercity passenger rail service. Critics claim that other companies would do this job better. But if that was true back in late 1960’s, there would’ve been no need in creating Amtrak to begin with. Apparently, private railroads were not exactly suited to provide usubsidized service while competing with generously subsidized highways and aviation. Apparently, this reality hasn’t changed over the past 40 years. The status of legal monopoly was lifted from Amtrak in 1997. Yet, no private operator has used the opportunity to compete with Amtrak since then, in spite of it being perfectly legal.

  30. J Howard – Shill much? And which Taxpayer Supported entity do you collect a check from – USPS? It, like AMTRAK, was once a completely different animal (with purpose, value and intelligent mgmt) than it is today. Offering discounts such as these is bribery, graft & corruption Straight-up. And would be viewed as such by any legitimate court in this country should someone have the where-with-all to litigate. I would hope someone will. It’s disgusting.

  31. This whole thing is more or less useless. Can’t be used on weekday Acela; can’t be used on cheap fares (e.g., $49 NY-Washington). I do not see a difference between this and the AA rates

  32. Lots of red herrings and slippery slopes throughout these comments. My observations:
    – AAA has a HUGE membership obtained by offering a compelling product in a free market. Hard to compare to the NARP or to see how tho they may be similar that the NARP could negotiate a discount like AAA probably had to.
    – I drive regularly and rarely see a federally-funded employee during my drive: hard to compare fully-staffed train service to road construction even railroad construction. I support construction of infrastructure that promotes free enterprises (e.g. trucks, cars, buses). I would be against a government-run AmBus offering a discount to the member of the NABP.
    – I enjoy my occasional train rides, a great way to see the country. I also enjoy rides in horse carriages but would not support subsidies to AmCarriage that would make this mode of nostalgic travel a viable commuting option for the members of the NAHCP. This link shows the population served by AmTrak. http://www.trainweb.org/moksrail/documents/pop/msa.htm. You would think a well-run organization with a viable product would be able to make a profit with this population. So is the organization or the product the problem?
    – Sometimes I help my neighbor when I tell him that his product isn’t any good. By and large the American consumer has said this to Amtrak. Our history is rich with stories of people spreading out across this country finding their piece of the Dream. The train was a vital part of that 100 years ago. It die not economically keep up with that ‘sprawl’. The car and the airplane (even buses to some degree) have established themselves as primary components of the Dream, the train not so much.
    – The concept of government taking money from one to help another is something that nearly everyone supports. The question is do we draw a line and if so where? I’m perfectly ok if a New Yorker wants to subsidize another New Yorkers’ commute. I’m alittle less ok when a Pennsylvanian has to subsidize that same New Yorker. Even less so for a person in Montana. Just because someone once supported a farmer in Ohio doesn’t mean that we should always do that. I do not oppose Amtrak: I do oppose them asking me for more of my money to offset the discount they gave to someone because that someone joined a club that offers as one of its primary benefits expertise at asking me for more of my money.

  33. Geo Behr makes several good points, but he is apparently unaware that Amtrak’s biggest problem these days is finding enough operable cars and locomotives to accommodate all the millions of people who seek to ride its trains. That real problem arises because of incompetence within Congress (particularly its Transportation committees). Congress has aimlessly funded Amtrak for 41 years without ever deciding what Amtrak is supposed to be and what its leadership is to do. Is Amtrak supposed to provide a national intercity rail passenger service network that serves as many city-pair markets as does the Interstate Highway network? Or is Amtrak supposed to focus its funding on a few heavily traveled corridors and ignore all other potential service routes? Is Amtrak supposed to price its services to maximize revenue, or to minimize its operating costs? If the latter, why does not Congress require that Amtrak establish an orderly fleet replacement/expansion program that Congress then fund adequately to maximize Amtrak’s potential operating revenue? If the former, how can Amtrak maximize ridership while simultaneously charging fares as high as the market will bear?

    Absent consistent direction and funding, Amtrak struggles to operate a skeletal national intercity service network and a handful of high-travel corridors around the country while not serving hundreds if not thousands of of other heavily traveled routes.

    This skeletal service network cannot possibly generate adequate fare revenues to cover 100 percent of its direct operating costs — but does manage to cover more than 80% of such direct costs — nor can it generate anywhere near the revenue needed to pay any significant portion of the Amtrak system’s huge capital needs. Experience around the country and the world shows that doubling train frequencies on existing routes would triple or quadruple revenue-per-station without significantly raising station costs. Connecting more cities to the Amtrak service network, especially when using existing stations as transfer point among new routes and old would also boost revenue far more than it would increase operating costs.

    Unlike European passenger rail services, Amtrak has no rail passenger stations within airport terminals and very few stations that are conveniently connected to airports. Amtrak is thus unable to provide really useful and convenient connections for travelers whose trips either begin or end in cities not served by commercial airlines.
    Creating such direct airline-train connections would boost Amtrak revenue and reduce airline losses from short distance flights serving low-volume airports.

  34. michael asserts that “Offering discounts such as these is bribery, graft & corruption Straight-up.” Oh, so any other business that offers discounts to its customers and supporters is also “…guilty of bribery, graft & corruption”? That pretty much covers all national retailers and the entire transportation industry.

    Get off your ideological horse and think before writing, please! Those critics who constantly demand that Amtrak operate more like a business demonstrate monumental gall when they then accuse Amtrak of engaging in “…bribery, graft & corruption” after its leadership attempts to comply with such critical direction.

    Oh, I have never been an employee of any federal government agency. My 50 year working career included work in both the private and non-federal public sectors. The last 30+ of those years occurred in a regional planning agency charged with ensuring the orderly and efficient use of state and federal transportation funds, primarily for street and highway construction, operation and maintenance.

    Beginning long before working ad continuing to this day, I have traveled around this country [and parts of Western Europe]by nearly every imaginable form of transportation — from paddle-wheel steamships on the Great Lakes to trains through the Rocky Mountains and across 8 European nations to jet planes to Alaska and Hawaii to rubber rafts on the Colorado River.

    I do not shill for any business; I am not paid one dime by NARP, AMTRAK or any other transportation provider for my 40+ years of advocacy for a comprehensive, integrated national transportation system in place of the disorganized, inconvenient, expensive and wasteful mess with which we must now contend.

    My words in these messages are based on my work and travel experiences, not on ideologically rigid concepts woefully devoid of either hard facts or real-world experience.

  35. Oh how tiresome this blog is sometimes, with the neverending bash the TSA, usually darker skined lower class workers, unions, and now dragging out Amtrak-the beat the dead horse to death subject of all conservatives. Listen, can we stick with the posts on hints about scamming the travel industry to maximize our personal benifit. thanks

  36. @hola Oh how tiresome certain commenters are sometimes, I would appreciate linking to the neverending bash of “dark skinned lower class workers”..? That’s a pretty offensive claim, I sure hope you can back it up…

  37. If Amtrak could give money to NARP directly, I don’t see any problem. Alternatively, if Amtrak had an objectively fair policy to allow any organization to give Amtrak discounts to their members on a non-discriminatory basis and NARP happened to take advantage of it, again I see no problem. Otherwise, I have a big problem with this.

  38. At Mike in post 3.

    Why should someone in NYC pay for your roads, your highways to get your product to market, your power lines, your post office then?

    Because some things are for the greater good of the country.

    Trains in this country are the only method of travel where the operating company is expected to not only pay for the surface space to move but also has to pay property taxes on it.

    But sure. Just because you particularly aren’t using a service doesn’t mean there is not a vital need for it in this country.

  39. At Graham in post 5.

    You’re actually wrong. Most long distance trains only “lose money” when you include “their fair share” of the NEC ROW costs. Which of course is nothing more than an Enron like accounting move and their fair share should be zero.

  40. At Gary regarding post 6.

    How is NARP discounts different from them giving a AAA discount?

    If you want to say they shouldn’t give any because of who/what they are, I can understand that to a point. But then you’re really holding them to a higher position on the field than the competition if they can not offer any discounts to anyone which leads to more complaints that they can’t survive because people are taking the “cheaper” option.

    Which brings us to a slightly off your original topic point of neither airlines nor roads users actually pay for the actual costs of their ride too. All forms of transportation are subsidized so why the bleeping hell should trains be singled out to be “self sufficient”?

  41. At Gary post 26.

    Basically Amtrak is in fact giving discounts to those who lobby for them and those who lobby against them. And you have to pay to be a member of either organization. NARP vs AAA.

  42. At Geo, post 33.

    Why should be subsidize your driving? Basically all you’re entire comment says is “I got my good deal so screw you getting yours”

  43. There are some problems with how the rail industry is regulated
    1) The US has the most restrictive train crash test standards in the world (in case freight trains hit passenger trains) – thus, making it impossible for the US to use high speed trains developed elsewhere. Despite all the money spent on the Acela, it improves the NY to DC travel time by 1 minute compared to the train it replaced.
    2)There are arcane restrictions on what municipal / commuter rail companies can serve vs. amtrak. Long Island Rail Road can serve the 119 mile journey from New York to Montauk but cannot serve the 95 mile trip from New York to Philadelphia, because it crosses 2 state lines.
    3) There are limitations on what railroad companies can do to ensure operators are doing their job. Despite cameras being place on some (non-Amtrak) trains in New York catching train operators reading the newspaper while driving the train, they have since covered up windows to block the cameras and the railroad cannot take action.

    http://www.nbcnewyork.com/news/local/metro-north-engineer-windows-covered–158326065.html

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