What Do Amtrak & U.S. Postal Service Have in Common?

2 Answers

  • lare
    Lv 7
    8 years ago
    Favorite Answer

    they are both agencies of the government, but don't have much in common beyond that. being a government agency means the congress can impose unreasonable requirements that would not be expected of private run organizations.

    the USPO is an independent agency, which means it is funded by stamps and sales of services and receives no taxpayer support, its surpluses have to be invested by buying Treasury Bonds by law. To this end congress does everything in its power to force surpluses, like requiring prepaying retirements 75 years in advance. this helps congress finance the deficits in the federal budget that otherwise would have to be paid by taxes. Amtrak is a service subsidized by the federal budget. It is the only rail passenger service for most of America, so making profits is secondary to insuring that train service is available. Amtrak was created to relieve private railroads of their public service obligations for passenger traffic for which they were unable to perform at a profit either.

    the USPO owns its facilities and controls its operations and has sufficient volume of business to contract for additional services from the private sector and in effect subsidizes other carriers like UPS and FedEx. Amtrak pays private railroads for the use of rights of way and does not have a priority to access meaning it can be delayed in favor of freight traffic.

    Amtrak has never been a self-finance activity and while it has tried to keep expenses in check, it has always worked with a tax subsidy. This is not surprising as private railroad passenger service ran in the red for decades prior to government bailout. The post office has been self-finance for as long as i can remember. The constitution requires a federal postal service, with no mention of operating at a profit. The constitution does not require a passenger rail service, however the private rail companies contracted to perform that as part of the agreement to get free right of way property provided by courtesy of the government.

  • Frank
    Lv 7
    8 years ago

    They both provide a vital, yet unprofitable service?

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