Amtrak Food Would Be Privatized With House Proposal -- With Taxpayers Paying For Losses

A House GOP proposal would force Amtrak to privatize operation of its cafe cars -- but the federal government would still be required to pick up part of the tab for the private provider's hot dog and Heineken offerings.

The measure introduced by Rep. Jean Schmidt (R-Ohio), part of the much larger and controversial surface transportation bill now under debate, takes aim at Amtrak's onboard food and beverage service, which loses some $60 million a year, according to the congresswoman.

The measure's language, however, outlines the limits of what even its proponents think privatization can accomplish. The proposed legislation states the federal government would pay out "any portion of appropriations for Amtrak necessary to cover a net loss" from the food and beverage service. So even if the private providers save Amtrak some money, the federal government would still be required to cover any losses from the private businesses' operations. Amtrak has argued that food and beverage services operate not as a money-making proposition, but somewhat as a loss-leader, an amenity to lure passengers to spring for train tickets.

Schmidt's office did not immediately respond to a request for comment.

But Ed Wytkind, president of the transportation trades department at the AFL-CIO, argued the "net loss" subsidy is a symbol of Republican hypocrisy. Nearly 1,900 unionized members provide onboard food services on Amtrak. "You can't make this stuff up," Wytkind told HuffPost. "It is the best deal you could possibly write for some food service company."

Conservatives have said private companies would operate more efficiently. But, Wytkind asked, "If they're so confident about it, why do they have to hold them harmless?"

The measure would limit the government's losses "to the extent that such net loss was anticipated in the bid selected." Amtrak's food and beverage services have long been a target of Republicans' ire. Amtrak spends $2 for every $1 it makes off food and beverages, in part as a result of high labor costs, according to a 2005 Government Accountability Office report.

Earlier on HuffPost:

Comments

[JUSTBECUZ]

06:18 PM on 02/22/2012

Why pick on Amtrak all the time? The airlines are subsidized even more because they couldn't make a so called "profit" otherwise. Every transportation mode is subsidized somewhat. Now, in England the trains are run privately by private carriers using the same logic that our country does with airlines meaning government owns the infrastructure and the airlines rent out space to be there. The airlines couldn't make a profit otherwise, they would be like Amtrak.

[jeffmaz]

02:51 PM on 02/13/2012

What has not been talked about here is that Amtrak was forced to contract out its commissaries many years ago. At one time it was Gate Gourmet and I think it is now Aramark. The food service has already been privatized while Amtrak still provides the onboard staff. So you see the real issue is to take away the union jobs and replace them with McJobs. That is the Repubs real target.

[ivanstermonster]

11:54 AM on 02/13/2012

What happened to Capitalisim GOP? That proposal sounds more like Socialisim to me...

[Erik77]

10:02 AM on 02/15/2012

reverse socialism

[jamesgeronimo]

04:17 PM on 02/12/2012

Read this:
http://www.huffingtonpost.com/2011/12/13/food-company-lobbying_n_1146425.html#s540356&title=5_tie_Sodexo
and this:
http://www.nytimes.com/2011/12/04/opinion/sunday/school-lunches-and-the-food-industry.html?pagewanted=all
and this:
http://www.huffingtonpost.com/2011/12/13/food-company-lobbying_n_1146425.html#s540356&title=5_tie_Sodexo

For those of you who may not understand what big business can and wants to do. Look at the banking industry, then look at the food industry.

[brklynivn]

12:32 PM on 02/07/2012

So they're proposing to socialize the losses, but privatize the profits? Sounds like what they did with the big banks.

[yukonsam]

10:15 AM on 02/07/2012

If the private sector can't or won't provide cost-effective services at their own risk without loss guarantees from the government, then it shouldn't be privatized. Who's bidding.... Haliburton?

[TruEngineHearing]

09:34 AM on 02/07/2012

Yeah!, let's ruin Amtrak - another brain-challenged proposal from a mal-directed, vindictive right-winger.

Pain, dishonor and the defeat of our national character will be harvested by those of us who fail to war the Jean Schmidts to the ground - whenever and wherever they appear.

In case we need reminding, here's the great promise from the lying right: "We are selling off America to private enterprise, which will run it more efficiently."

[cabinetmaker]

08:23 AM on 02/07/2012

the entire train is subsidised by taxpayers

Sen Biden said he was a normal working guy takng the train to work everyday

did he have a brown paper bag lunch?
do most everyday people spend $100 to get to work?

[Rteefact]

10:16 PM on 02/12/2012

They do in upstate NY its a lot cheaper considering NY city tolls, fuel, parking and commuting times. Its $416 a month for a parking space w/ferry to the train to Grand Central. It nice to get a snack and a cocktail on the way home.

[Erik77]

10:05 AM on 02/15/2012

Yes, it is subsidized. Disregarding whether Amtrak may or may not be running an efficient operation, it is subsidized because it is in the public interest to have a rail service.

Clearly, you disagree.

[GraniteSkyline]

05:26 AM on 02/07/2012

Thanks GOP! Every day you think of new ways to stick it to us taxpayers!

[huff reader]

08:02 AM on 02/07/2012

Which, of course, doesn't seem to include the 1%!

[cabinetmaker]

08:25 AM on 02/07/2012

we are already paying...it will be nothing new except a possible savings

stop being polarized

[PAposter]

03:52 AM on 02/07/2012

If the government is going to cover any loss...what's the incentive to make a profit and how does this end up being cost effective? I am truly stunned that Republicans have the audacity to ask taxpayers to fund a preemptive bailout of a private company that they no doubt have stock in.

[eehd]

01:43 AM on 02/07/2012

So the idea is that the government would subsidize a private company? No payroll tax extension, no unemployment benefits extension, and shorter time period to receive unemployment benefits because they aren't paid for. Bush/Obama tax cut for the top earners and corporate welfare without paying for it are okay. They don't even fake the funk anymore, do they?

[marlainWA]

12:13 AM on 02/07/2012

I hope this doesn't pass. I have been taking the train quite a bit the last few years. They do a good job and eating on the train is fun. If they served cheap unhealthy food from some company coming in I would never use the service. Probably take the train less or bring my own food.

[rkmerriman]

08:43 AM on 02/07/2012

Good idea! Why don't you do that!

[blasa]

11:13 PM on 02/06/2012

so what about all the on board service employees? how are they suppose to survive without a job! GOP focus the cuts on your own salaries and the amount you guys are sending to overseas countries who clearly hate americans!

[rkmerriman]

08:48 AM on 02/07/2012

Excuse me! GOP salaries and DIM salaries are the same! It is currently the DIMS that are sending money to overseas countries that hate us! I don't see how you missed these facts they were in all the papers!

[Lanny Clifford]

09:55 AM on 02/07/2012

Excuse me!!!
It is NOT currently the DEMS that are sending money overseas to aid other countries.
It is a bipartisan vote that allots funds to aid other countries. Get your facts straight and then come back to the table.

[Maxx Webber]

10:14 PM on 02/06/2012

This bodes real well for the future confidence in high speed rail

[Tim Lynch]

01:28 PM on 05/25/2012

One must remember; This bill is the product of Rep Jean Schmidt (Mean Jean), a really nasty right-winger, who is leaving congress soon. Consider the source and remember; The US Senate will have none of it! Mean Jean doesn't have many friends. Amtrak has many friends.

[George Hanshaw]

10:12 PM on 02/06/2012

"Amtrak has argued that food and beverage services operate not as a money-making proposition, but somewhat as a loss-leader, an amenity to lure passengers to spring for train tickets."

That might actually make sense if Amtrak didn't lose money on operations too.

This is just plain dumb and stupid. We have a $15.3 Trillion debt and Amtrak certainly is NOT an essential government function.

[mac2jr]

11:14 PM on 02/12/2012

Tell it to the millions that use Amtrak each day...

[Erik77]

10:10 AM on 02/15/2012

thousands