'Why Are We Even In This Business?': Bernie Moreno Slams Speed And Efficiency Of Amtrak

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At a Senate Commerce Committee hearing in June, Sen. Bernie Moreno (R-OH) questioned witnesses about Amtrak.

Transcript

00:00Thank you, Mr. Chairman. So, Mr. Jeffries, you talked about modernization. We go back to that,

00:05obviously, it's a theme that we're hearing over and over again in this hearing.

00:08And you said the regulations were mostly designed in the 1970s, is that correct?

00:14At least in some cases, if not before and since. But, you know, we're a legacy industry with

00:20legacy regulations. Gotcha. So we haven't really done much in Congress in that period of time?

00:25I think Congress has done and has tried to do a lot of things. A lot of it's been around funding.

00:31You know, the challenge is, I think, you often try to regulate for the current condition.

00:36And so, for example, you know, I talked about autonomous track inspection. That's today's

00:40technology. But I would be hesitant to say, oh, let's say that you have to use ATI to do track

00:47inspections because that locks you into today's practice. So that's why we're focused on outcomes

00:52based, not input based. Where do we want to go? And let's continue to evolve how we can best get

00:57there. Gotcha. It seems like we may be overdue for some regulatory changes since the 70s was a

01:03decent period of time ago. You talked about the Highway Trust Fund. Just kind of for the record

01:09for the people watching, how does that interplay with rail service? Sure. So our biggest partner,

01:16also our biggest competitor, is the commercial trucking industry. And we've actually worked

01:21closer together than we ever did, but we're also highly competitive in certain markets. And so,

01:26as you've heard me say, we're very proud of the fact that we invest almost entirely on our own dime

01:31back into our network, where truckers operate over infrastructure paid for by the Highway Trust Fund.

01:37And that's all well and good when, you know, those fees cover the cost of the highways themselves.

01:42But what we've seen is more and more and more and more shortfalls, so that general fund transfers

01:48are required to fund the highway network. And when that happens, that's a subsidy to what our

01:54competitors are paying into the infrastructure they operate. And so all we're looking for is a

01:59competitive playing field, where each side puts in the appropriate amount of cash over the

02:03infrastructure that it operates. No, that makes a lot of sense. So for example,

02:07if the Highway Trust Fund were to run out of money, which it seems like that's something we've been

02:11talking about for a long time, that's problematic, obviously, right? Understatement. Absolutely.

02:15Right. So if you have vehicles on the road that are not paying gas tax at all, that's a problem.

02:21Yes. So if you were to create legislation or federal policy that bans internal combustion engine cars,

02:29would that increase the Federal Highway Trust Fund or decrease it? I think that would be problematic,

02:34to say the least. That would be problematic. Well, the previous administration wanted to ban

02:37ICE cars as of 2035. Fortunately, we were able to get rid of that through a Congressional Review Act

02:44a couple weeks ago. Huge deal. We no longer have EV mandates. Would it make sense, though,

02:51if we could raise money into the fund to say, hey, we're going to charge maybe a $500 one-time fee

02:58for battery electric vehicles since they're paying zero gas tax? Would that be not only good for the

03:03industry, but just fair for people who are paying a gas tax versus people who aren't? I think whether

03:08it's autos or trucks or any other form of transportation used in the highways, we think

03:12it's appropriate that they pay for the infrastructure wear and tear they cost. Gotcha. Well, I'm hoping

03:17that in the big, beautiful bill, we can put in a $500 one-time fee for battery electric vehicles,

03:22$250 for hybrids. It will raise over $12 billion over the budget window and start addressing some of that

03:28shortfall. So I urge my colleagues to consider making that happen. I guess what's to you, Mr.

03:34Gilbertson, in your mind, what's holding back innovation in your industry? What's the main

03:39impediment to innovation? Senator, it's a good question. I'm not sure there's a clear answer. I

03:47mean, there's a financial component to it. There is a regulatory component to it. And there is

03:56innovation occurring, as I mentioned. It's powerful. It not only improves safety, it improves our

04:04offering to our customer. And we absolutely need to do it. When you know the delivery minute of your

04:12pizza, but we can't tell you the delivery day of a rail car, we have a problem. Very aware. When I was

04:19in the retail automotive business, we would, of course, always be delayed by the cars that were sold,

04:24and the cars that we didn't want arrived immediately and on time. So question for you, Mr. Cumbert.

04:32I want to emphasize, there's clearly a difference between freight, and the government doesn't own

04:38any freight trains, correct? Not that I'm aware of. Gotcha. Okay, because thank God we'd lose hundreds

04:45of billions of dollars there. But we do own, or are responsible to fund Amtrak, correct? Correct. So I grew up in

04:52South Florida, so you don't have to ask me to visit, although this time of year, it's insanely hot,

04:56even by DC standards. But if I were to go from Miami to Orlando, I have two choices for rail. I can go

05:03on Amtrak and go on Brightline. What's the average speed that you travel between Miami and Orlando?

05:10Our trains go about 110 miles an hour. And what's the average speed of Amtrak?

05:14I believe it's somewhere in the 40 to 50 mile per hour. Gotcha. So you can get to Miami, Orlando in

05:20about three hours with Brightline, seven and a half hours on Amtrak. And if I could add one more

05:27thing to that, I believe Amtrak runs twice a day. We run 36 trains, one-way trains between Miami and

05:34Orlando. So the frequency is a big difference too. Gotcha. I know of overtime, so I'm going to cut to

05:38the chase of my line of questioning. But if you look at the stations, the modern cabin, I'm not

05:44trying to do a commercial for Brightline, but it is night and day. It reminds me of a Russian car from

05:50the 70s versus a modern vehicle today. Why are we even in this business? Why are we subsidizing or

05:57owning passenger rail in America when we have absolutely, we're terrible at it? The government

06:04is objectively really, really bad at running that. If we had government airlines, holy Lord,

06:10can you imagine what that would look like? Why don't we just get out of that business completely,

06:14let the private sector run it? Is that something that I'd ask all four of you just to quickly

06:19comment? Does that seem like a reasonable approach to just say, we've given it the freshman try,

06:27like we've, I don't know, 60, 70, 80 years. It's not worked. We've lost hundreds of billions of

06:31dollars and objectively provide terrible service. Going 40 miles an hour from Miami to Orlando is

06:38insane. Now, nobody wants to answer that question. Well, Senator, I'll just say I'm from South Florida

06:47too. I'm from Belle Glade, Palm Beach County, Florida, and I've written a Brightline. I think

06:54a public-private partnership, local leaders are not opposed to that. They just want partners. And I

07:00would be very open to our members considering that.

07:06I would just add that, you know, it probably depends on the situation, right? Because, and what

07:11the motivation is. Is it a public service or is it a private enterprise? And in certain parts of the

07:16country where Mr. Hussein's operating, for example, and I bet he wants to expand to other areas, there's

07:21lots of opportunity for private enterprise to thrive. Congress has made the decision that it also wants

07:26to provide other services that are going to be inherently money losing. And as long as that's

07:30the point of view, then that service needs to be provided as well. So it's probably not an either

07:35or. It's probably a situational situation. Yeah, the only thing I'd say is that providing

07:41air travel is also a public service, but there's no government-owned airline for good reason.

07:46So, Chairman, I'm over my time, but thank you for giving me the opportunity.

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