Amtrak and the Normalcy of Debt

If you’ve never heard of a P&L, or had to make payroll, or you’ve worked for government all your life, Amtrak’s loss on food service, as reported by the Washington Examiner, won’t seem like that big of a deal:

Taxpayers lost $833 million over the last decade on the food and beverages supplied by Amtrak, which managed to spend $1.70 for every dollar that received in revenue.

“Over the last ten years, these losses have amounted to a staggering $833.8 million,” said Rep.John Mica, R-Fla., in a statement previewing a House hearing today.  “It costs passengers $9.50 to buy a cheeseburger on Amtrak, but the cost to taxpayers is $16.15.  Riders pay $2.00 for a Pepsi, but each of these sodas costs the U.S. Treasury $3.40.” is currently selling 24-packs of 12 ounce Pepsi cans for $8.94 — which averages to about 75 cents per can.

Amtrak President Joe Boardman tried encourage House investigators by telling them that last year’s losses represent an improvement over previous years. “Our ongoing programs have certainly delivered measurable financial efficiencies,” Boardman told Congress in his written testimony today. “In 2006, our food and beverage service recovered 49 percent of their costs. In 2011, these services recovered 59 percent of their costs,” he testified.

My mind exploded when I read that last quote. BOOM. Joe Boardman is trying to give encouraging news to Congress by letting them know their food service is running 41% in the red. Negative forty-one percent. For the food. That’s staggering. This falls well into the “hemorrhaging money” category. If you’re a small business owner, improvement to -41% is nonsense. Here’s reality: If you had a burger joint, would you take $6 out of your pocket every time you sold a burger, and $1.40 for every Coke?

Exactly. That would be insane. But that’s exactly what they’re doing.

And just what the hell does, “Our ongoing programs have certainly delivered measurable financial efficiencies” even mean? It means nothing. If I take $20 out of your pocket, you’ll have delivered a measurable financial efficiency that amounts to a loss of $20.

What’s disturbing is the fact that this is an ongoing and known issue through at least two annual budget cycles. And yet, for whatever reason, they have not dealt with it to the tune of nearly a billion dollars. For the food.

I’m sure it’s an anomaly. The rest of Amtrak is probably doing fine.

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2 Responses to Amtrak and the Normalcy of Debt

  1. arnonerik says:

    Great post! This really is an great example of how government bureaucracies invariably overspend while providing poor service. I am sure Obamacare will end up costing us at least twice as much while we receive half or less of the benefits we currently have. As far as Amtrac goes, the government should sell it and its equipment to the highest bidder. That would at least end the hemorrhaging of taxpayer money for that outfit.

  2. arnonerik says:

    I’m not a genius by any streatch of even my imagination but they could solve this problem in one or two weeks (if it wasn’t for the graft and corruption it probably now provides) by selling the food service as a concession to the highest bidder. This would imediately result in a positive cash flow.
    Somehow for some reason I don’t think Amtrac is really interested in a solution.

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