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The Past and Future of U.S. Passenger Rail Service |
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September 2003 |
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Notes
Numbers in the text and tables of this study may not add up to totals
because of rounding.
The cover image, showing an Amtrak train (foreground) and a Washington
Metrorail train (background) in Alexandria, Va., is based on a photograph
that is ©Bill Hough (www.auctiontransportation.com).
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The National Railroad Passenger Corporation (also
known as Amtrak) has been in a shaky financial condition ever since it
was created by the federal government more than 30 years ago. Although
Amtrak was established as a private, for-profit company, it has needed--and
received--federal subsidies every year since it began providing service
in 1971. Those subsidies totaled over $1 billion for 2003. However, according
to Amtrak executives and independent analysts, that amount is insufficient
for the railroad to sustain its current service safely and reliably over
the long run.
Amtrak's authorization expired in 2002. In considering legislation to
reauthorize federal funding of the railroad, the Congress will again face
the issue--as it has throughout Amtrak's history--of what the goal should
be for an intercity passenger rail program. Should service be operated
only where it can make a profit (or at least cover operating expenses)?
Or should the federal government also commit to subsidizing money-losing
trains to meet a perceived need for public transportation? Given that some
service is unlikely ever to be able to cover its operating costs, are there
other organizational or institutional arrangements that could offer service
at a lower cost to taxpayers?
This Congressional Budget Office (CBO) study--prepared at the request
of the Senate Budget Committee--reviews past policies toward Amtrak and
the fundamental economics of passenger rail service. The review suggests
that there are only limited conditions under which passenger rail service
in the United States could be economically viable without subsidies. This
study also explores the implications of four options for future federal
support of passenger rail, ranging from eliminating federal subsidies to
funding a massive expansion of rail service. In keeping with CBO's mandate
to provide objective, impartial analysis, the study makes no recommendations.
Elizabeth Pinkston of CBO's Microeconomic and Financial Studies Division
wrote the study under the supervision of David Moore and Roger Hitchner.
Many people reviewed drafts of the study and provided useful comments,
including Francis Mulvey and Glenn Scammel of the House Committee on Transportation
and Infrastructure; Mary Phillips of the Senate Committee on Commerce,
Science, and Transportation; Louis Thompson, formerly of the World Bank;
José A. Gómez-Ibáñez of Harvard University;
Anthony Perl of the University of Calgary; Marcus Mason of Amtrak; Neil
Moyer and Conan Magee of the Federal Railroad Administration; Jack Bennett,
Thomas Marchessault, Jeanne O'Leary, Sherry Riklin, and Edward Weiner of
the Office of the Secretary of Transportation; John Fischer and Randy Peterman
of the Congressional Research Service; James Ratzenberger of the General
Accounting Office; Paul Dickens; and Peter Fontaine, Rachel Milberg, and
Carla Tighe Murray of CBO.
Christian Spoor edited the study, and Leah Mazade proofread it. Angela
McCollough prepared the tables. Maureen Costantino designed the cover and
produced the figures. Lenny Skutnik printed the initial copies of the report,
and Annette Kalicki prepared the electronic versions for CBO's Web site.
Douglas Holtz-Eakin
Director
September 2003
Tables |
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1. |
Domestic Intercity Travel by Rail, Air, and Bus, Selected Years, 1960
to 2000 |
2. |
Amtrak's Revenues and Expenses, 1971 to 2001 |
3. |
Elasticities of Demand for Intercity Passenger Service |
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Figures |
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1. |
Federal Funding of Amtrak, 1971 to 2002 |
2. |
Sources of Amtrak's Operating Revenues, Including Federal Payments,
2002 |
3. |
Intercity Railroad Passenger-Miles, 1926 to 2002 |
4. |
Number of Amtrak Passengers, 1971 to 2002 |
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Boxes |
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1. |
Externalities |
2. |
Can the United States Learn from Other Countries' Experience with Passenger Rail? |
3. |
Should Amtrak Be On-Budget? |
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