Billionaire tech entrepreneur Elon Musk, who heads the advisory “Department of Government Efficiency” as part of the Trump administration’s efforts to upend business as usual in Washington, told a tech conference this week that Amtrak should be privatized.
Musk offered no specifics on how Amtrak could be privatized or what company would be interested in running a passenger railroad that posted a $705 million adjusted operating loss in the fiscal year that ended Sept. 30.
Musk said Amtrak was an embarrassment compared to other passenger railroads around the globe. “If you’re coming from another country, please don’t use our national rail. It can leave you with a very bad impression of America,” he said.
Amtrak wasn’t the only government program in Musk’s crosshairs: He says anything that can be privatized should be, including the U.S. Postal Service.
Privatization, he says, brings with it the threat of failure, which provides an incentive for change. “Basically, something’s got to have some chance of going bankrupt, or there’s not a good feedback loop for improvement,” he said.
Amtrak says it’s on a path to reaching operational profitability for the first time.
“Amtrak’s business performance is strong. Ridership and revenue are at all-time highs, and transformative projects are underway that will greatly improve the customer experience,” spokeswoman Christina Leeds says. “By maintaining this momentum and the ongoing support we’ve built with our federal, state, and private-sector partners, the train service we operate across our nationwide network, as mandated by law, is on-track to reach operational profitability — for the first time in history — during this administration.”
Amtrak also says its new trains and ongoing infrastructure improvements will allow the railroad to handle more passengers.
“We look forward to working with President Trump, his administration, and Congress to build a world-class passenger rail system featuring incredible new bridges, tunnels, and trains. A new era of rail is on the way as we serve more Americans than ever, from rural towns to big cities across the great United States,” Amtrak says.
Musk’s comments were the latest threat to Amtrak since Republicans gained control of the White House and Congress in January. Executive orders have called for scrutinizing existing grants. Among them: Programs funded by the Federal Railroad Administration for the expansion of passenger service as well as for Northeast Corridor improvement projects.
Congress has already authorized spending $66 billion on rail-related projects through the Infrastructure Investment and Jobs Act of 2021. Included in that total through fiscal year 2026: $22 billion for Amtrak and $36 billion in federal-state passenger partnerships.
Much of the grant money remains tied up in the cumbersome FRA review process, which might get further bogged down by job cutbacks at the agency.
Proposals to privatize Amtrak or eliminate funding for the passenger railroad have come and gone over the decades.
In 1997, for example, the Amtrak Reform and Privatization Act aimed to wean the railroad off federal subsidies in preparation for eventual privatization. In 2005, the George W. Bush administration proposed transitioning Amtrak to a private operator, suggesting a federal-state partnership where Amtrak would focus on train operations, while track and station maintenance would be handled separately.
Note: Updated at 8:45 a.m. CT with comment from Amtrak.
Amtrak trains are “energy-efficient,” “climate-friendly,” and a favorite cause of Joe Biden, three reasons for the new regime to “toss it into the wood chipper.” We’re in “Drill, baby, drill” mode now. And the constitutionally defined prerogatives of Congress, whether GOP led or not, are no longer honored by the executive crew.
I just don’t see a GOP Congress letting this happen in my opinion. Too many long distance trains going through the middle of the country & finally a chance to advance much better rail service through VA and NC, Southeast Corridor.. Second, what is wasted on a few DOD contracts can probably cover Amtrak’s current federal outlays. In other words, Amtrak is chump change. Plus, I don’t think anyone believes Amtrak would remotely have a chance to survive as a private nationwide entity. Maybe Northeast corridor and some glorified commuter corridor services where the states want to fund it.
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I would advocate differently. Time to immediately drop Amtrak’s expansion to everywhere but gets no one to nowhere plan. Time to double down on existing service and frequencies & retain the few expansion corridors that make sense. Time to cut all the FRA red tape because there is a quite a few good projects on the books, engineered and ready that Congress funds should keep intact..
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Finally, Time to let Brightline offer competitive service on existing Amtrak corridor routes!! Brightline has already looked at it and identified corridors from my understanding. You will see another big push for industry to meet railcar demand (think Siemens new East Coast plant expanding & their ever expanding Sacramento facility) and immediate frequency without Federal outlays.
“ I just don’t see a GOP Congress letting this happen”
Mr. Ekren, the GOP congress will do ANYTHING president musk and king trump tell them to do. Cutting Amtrak funding is coming and I seriously doubt any private entity will step in to take over. But cutting Amtrak funding is going to be the least of our troubles over the next four years. That’s four years IF the orange one decides to leave office after his term is over.
What nonsense. Amtrak is NOT a government department, never has been for one minute of its existence. It is an entity controlled by the government and subsidized by the government.
If anyone thinks that a private company would take on this task, they would need to be even stupider than Elon Musk is.
Charles,
I disagree with you on this point. As I’ve stated before, I believe the NE corridor would be of interest to either a foreign operator if the terms of the deal would be acceptable to both sides. Notice I said “foreign” since I don’t believe Brightline would want this at this point in time and there is no other US company able to handle it. As for the rest, if Amtrak is totally gone, I can see operators willing to operate various segments of it that they believe can be successful with financial help and/or tax brakes from state involved.