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Thursday, February 4, 2010

Amtrak: Budget and Reauthorization

John Frittelli
Specialist in Transportation Policy

David Randall Peterman
Analyst in Transportation Policy

Amtrak was created by Congress in 1970 to provide intercity passenger railroad service. It operates approximately 44 routes over 22,000 miles of track, 97% of which is owned by freight rail companies. It runs a deficit each year, and requires federal assistance to cover operating losses and capital investment. Without a yearly federal grant to cover operating losses, Amtrak would not survive as presently configured. The crux of the public policy issue facing Congress has been succinctly stated by the Department of Transportation Inspector General (DOT IG): "To create a new model for intercity passenger rail, a comprehensive reauthorization that provides new direction and adequate funding is needed. The problem with the current model extends beyond funding—there are inadequate incentives for Amtrak to provide cost-effective service; state-of-good-repair needs are not being adequately addressed; and states have insufficient leverage in determining service quality options, in part because Amtrak receives Federal rail funds, not the states." 

Amtrak was reauthorized in 2008. Its previous authorization had lapsed in 2002 because of a policy stalemate involving the Bush Administration and Congress. The Bush Administration advocated significant changes to federal passenger rail policy, involving a reduction of Amtrak's role. Those changes were supported by some in Congress, while others supported increased funding for Amtrak, in line with Amtrak's strategy of maintaining its full current network while restoring its infrastructure to a state of good repair. Interest in alternatives to, and complements to, auto and air transportation, spurred by concerns over gasoline supplies and global warming, as well as the Obama Administration's interest in high-speed rail, suggest that Amtrak policy may receive additional attention in the 111th Congress. 

For FY2010, the Obama Administration requested $1.502 billion for Amtrak, which is $600 million more than the previous Administration requested for FY2009. Amtrak itself requested $1.840 billion, which is $350 million more than Congress appropriated last year. Congress provided $1.584 billion for Amtrak FY2010. Congress also appropriated $2.5 billion for intercity and high speed rail grants, for which Amtrak is among the eligible recipients. 

Congress provided $1.490 billion for Amtrak in the FY2009 transportation appropriations act (Division I of P.L. 111-8), $165 million more than the $1.325 billion provided in FY2008. In addition, Congress appropriated $1.3 billion for capital grants to Amtrak, and appropriated another $8 billion for intercity rail infrastructure projects (for which Amtrak is among the eligible recipients) in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5). 

Amtrak's previous authorization expired in December 2002. In October 2008, the 110th Congress passed an Amtrak reauthorization bill, the Passenger Rail Investment and Improvement Act of 2008 (Division B of P.L. 110-432). This bill authorized nearly $10 billion over the five-year life of the bill (FY2009-FY2013) specifically for Amtrak, including $5.3 billion in capital grants, nearly $3 billion in operating grants, and $1.4 billion for debt service. In addition, Congress authorized a total of $1.9 billion over these five fiscal years in intercity passenger rail capital grants to the states on an 80-20 federal/state matching basis. Congress also authorized $1.5 billion in capital grants to states and/or Amtrak for the development of 11 authorized high-speed rail corridors. The act established a procedure for interested public or private entities to submit proposals for the financing, design, construction, and operation of highspeed rail on these 11 corridors. However, putting a proposal into action would require further legislation from Congress.

Date of Report: January 29, 2010
Number of Pages: 14
Order Number: RL33492
Price: $29.95

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