Amtrak: The Political and Social Aspects of Federal Intercity Passenger Rail Policy
Publication Date: December 2004
Publisher(s): Library of Congress. Congressional Research Service
Throughout its history, Amtrak, originally envisioned as a for-profit corporation, has failed to achieve a profit and has continued to rely on annual federal subsidies for its survival. Despite this, there has been enough support in Congress, and, at times also in the White House, to provide just enough subsidies to keep Amtrak's trains running. There has not, however, been enough federal and state financial support for Amtrak, as a money losing (and, some would add, at least at times, mismanaged) operation, to develop its routes into the robust national network that intercity passenger rail advocates had hoped for. That Amtrak has teetered on the edge of a shutdown many times, only to be saved by federal subsidies, raises the questions of why and to whom a national intercity rail network matters.
Amtrak's critics question the economic justification for sustaining nationwide intercity passenger rail service and believe that Amtrak survives primarily for political reasons. Amtrak's supporters reject this notion and assert that the federal government should invest in this mode of travel because diversification is a central element of any wise investment policy. A political stalemate over Amtrak has continued for over 30 years, partly because of a discrepancy that exists between the economic geography that supports a competitive passenger rail service and the political geography necessary to support its high cost structure.
Population growth, affluence, and housing policies, as well as government highway and aviation system development policies, tended to favor highway and air travel over passenger rail. Despite these trends, which have been a detriment to passenger rail, there are also social needs arguments, including the need to serve people who do not own cars, have a fear of flying, or believe they cannot afford airfare (and decline to use bus service). Some also argue that communities view rail service as part of their history and sense of themselves. The defense of Amtrak as a linchpin of the local social fabric and practical politics has, at some times and some places, been surprisingly effective in forestalling service reductions or garnering state subsidies to continue service.
Both advocates and opponents of federal-aid for Amtrak have suggested a variety of options for passenger rail in the United States. The options range from accepting the status quo, changing Amtrak's organizational structure, privatization, to liquidating Amtrak entirely. Funding options include maintaining the current system, using highway and aviation trust fund revenues or creating a separate rail trust fund, shifting the subsidy burden to the states, bonding, imposing taxes on Amtrak's competitors, and relying on private sector funding. Only after a political consensus is reached among policymakers, however, on what kind of passenger rail service, if any, is needed can a choice be made as to which organizational or financing options are best suited to reaching the chosen policy goal. This report will not be updated.