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Thursday, January 24, 2013

Issues in the Reauthorization of Amtrak

David Randall Peterman
Analyst in Transportation Policy

John Frittelli
Specialist in Transportation Policy

Amtrak is the nation’s primary provider of intercity passenger rail service. It was created by Congress in 1970 to preserve some level of intercity passenger rail service while enabling private rail companies to exit the money-losing passenger rail business. It is a quasi-governmental entity, a corporation whose stock is almost entirely owned by the federal government. It runs a deficit each year. Congressional appropriations cover about half its total loss, and represent essentially all of its funding for capital maintenance and improvements.

Amtrak can be divided into three parts. There is its Northeast Corridor (NEC) service between Washington, DC, and Boston, where Amtrak owns much of the infrastructure and operates frequent service using its fastest trains. There is its long-distance service, in which infrequent trains crisscross the country over tracks owned by freight rail companies. And there is its statesupported service, in which Amtrak operates shorter-distance trains under contract with states. Amtrak was last authorized in 2008, in the Passenger Rail Investment and Improvement Act. That authorization expires at the end of FY2013.

Since Amtrak’s inception, Congress has been divided on the question of whether it should even exist. Amtrak is regularly criticized for failing to cover its costs, and thus requiring federal assistance. The need for federal financial support is often cited as evidence that passenger rail service is not financially viable, or that Amtrak should yield to private companies that would find ways to provide rail service profitably. Yet it is not clear that a private company could perform the same range of activities better than Amtrak does. Indeed, Amtrak was created because privatesector railroad companies in the United States lost money for decades operating intercity passenger rail service and wished to be relieved of the obligation to do so.

By some measures, Amtrak is performing as well as or better than it ever has in its 42-year history. For example, it is carrying a record number of passengers, and its passenger load factor and its operating ratio are at the upper end of their historic ranges. On the other hand, Amtrak’s plans do not envision significant decreases in its need for federal funding. Among the perennial questions that Congress may examine in considering reauthorizing Amtrak are whether Amtrak should continue to exist, what range of services it should offer, the appropriate level of federal financial support for Amtrak, its relations with states and with private rail companies, and its level of accountability to Congress. 

Date of Report: January 7, 2013
Number of Pages: 33
Order Number: R42889
Price: $29.95

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