Amtrak Reform And Accountability Act Of 1997

The National Railroad Passenger Corporation, doing business as Amtrak () , is the national passenger railroad company of the United States. It operates inter-city rail service in 46 of the 48 contiguous U.S. States and nine cities in Canada. ''Amtrak'' is a portmanteau of the words ''America'' and ''trak'', the latter itself a sensational spelling of ''track''.

Founded in 1971 as a quasi-public corporation to operate many U.S. passenger rail routes, Amtrak receives a combination of state and federal subsidies but is managed as a for-profit organization. The United States federal government, through the Secretary of Transportation, owns all the company's issued and outstanding preferred stock. Amtrak's headquarters is located one block west of Union Station in Washington, D.C.

Amtrak serves more than 500 destinations in 46 states and three Canadian provinces, operating more than 300 trains daily over of track. Amtrak owns approximately of this track and operates an additional 132 miles of track. Some track sections allow trains to run as fast as .

In fiscal year 2021, Amtrak served 12.2 million passengers and had $2.08 billion in revenue, with more than 17,500 employees as of fiscal year 2020. Nearly 87,000 passengers ride more than 300 Amtrak trains daily. Nearly two-thirds of passengers come from the 10 largest metropolitan areas; 83% of passengers travel on routes shorter than .

History

Private passenger service

In 1916, 98% of all commercial intercity travelers in the United States moved by rail, and the remaining 2% moved by inland waterways. Nearly 42 million passengers used railways as primary transportation. Passenger trains were owned and operated by the same privately owned companies that operated freight trains. As the 20th century progressed, patronage declined in the face of competition from buses, air travel, and the car. New streamlined diesel-powered trains such as the '' Pioneer Zephyr'' were popular with the traveling public but could not reverse the trend. By 1940, railroads held 67 percent of commercial passenger-miles in the United States. In real terms, passenger-miles had fallen by 40% since 1916, from 42 billion to 25 billion.

Traffic surged during World War II, which was aided by troop movement and gasoline rationing. The railroad's market share surged to 74% in 1945, with a massive 94 billion passenger-miles. After the war, railroads rejuvenated their overworked and neglected passenger fleets with fast and luxurious streamliners. These new trains brought only temporary relief to the overall decline. Even as postwar travel exploded, passenger travel percentages of the overall market share fell to 46% by 1950, and then 32% by 1957. The railroads had lost money on passenger service since the Great Depression, but deficits reached $723 million in 1957. For many railroads, these losses threatened financial viability.

The causes of this decline were heavily debated. The National Highway System and airports, both funded by the government, competed directly with the railroads, which paid for their own infrastructure. American car culture was also on the rise in the post-World War II years. Progressive Era rate regulation limited the railroad's ability to turn a profit. Railroads also faced antiquated work rules and inflexible relationships with trade unions. To take one example, workers continued to receive a day's pay for workdays. Streamliners covered that in two hours.

Matters approached a crisis in the 1960s. Passenger service route-miles fell from in 1958 to in 1970, the last full year of private operation. The diversion of most United States Post Office Department mail from passenger trains to trucks, airplanes, and freight trains in late 1967 deprived those trains of badly needed revenue. In direct response, the Atchison, Topeka and Santa Fe Railway filed to discontinue 33 of its remaining 39 trains, ending almost all passenger service on one of the largest railroads in the country. The equipment the railroads had ordered after World War II was now 20 years old, worn out, and in need of replacement.

Formation

As passenger service declined, various proposals were brought forward to rescue it. The 1961 Doyle Report proposed that the private railroads pool their services into a single body. Similar proposals were made in 1965 and 1968 but failed to attract support. The federal government passed the High Speed Ground Transportation Act of 1965 to fund pilot programs in the Northeast Corridor, but this did nothing to address passenger deficits. In late 1969, multiple proposals emerged in the United States Congress, including equipment subsidies, route subsidies, and, lastly, a "quasi-public corporation" to take over the operation of intercity passenger trains. Matters were brought to a head on June 21, 1970, when the Penn Central, the largest railroad in the Northeast United States and teetering on bankruptcy, filed to discontinue 34 of its passenger trains.

In October 1970, Congress passed, and President Richard Nixon signed into law, the Rail Passenger Service Act. Proponents of the bill, led by the National Association of Railroad Passengers (NARP), sought government funding to ensure the continuation of passenger trains. They conceived the National Railroad Passenger Corporation (NRPC), a private entity that would receive taxpayer funding and assume operation of intercity passenger trains. The original working brand name for NRPC was Railpax, but less than two weeks before operations began, the official marketing name was changed to Amtrak. There were several key provisions:
* Any railroad operating intercity passenger service could contract with the NRPC, thereby joining the national system.
* Participating railroads bought into the NRPC using a formula based on their recent intercity passenger losses. The purchase price could be satisfied either by cash or rolling stock; in exchange, the railroads received NRPC common stock.
* Any participating railroad was freed of the obligation to operate intercity passenger service after May 1, 1971, except for those services chosen by the Department of Transportation (DOT) as part of a "basic system" of service and paid for by NRPC using its federal funds.
* Railroads that chose not to join the NRPC system were required to continue operating their existing passenger service until 1975 and thenceforth had to pursue the customary ICC approval process for any discontinuance or alteration to the service.

Of the 26 railroads still offering intercity passenger service in 1970, only six declined to join Amtrak. Nearly everyone involved expected the experiment to be short-lived. The Nixon administration and many Washington insiders viewed the NRPC as a politically expedient way for the President and Congress to give passenger trains a "last hurrah" as demanded by the public. They expected Amtrak to quietly disappear as public interest waned. After ''Fortune'' magazine exposed the manufactured mismanagement in 1974, Louis W. Menk, chairman of the Burlington Northern Railroad, remarked that the story was undermining the scheme to dismantle Amtrak. Proponents also hoped that government intervention would be brief and that Amtrak would soon be able to support itself. Neither view had proved to be correct; for popular support allowed Amtrak to continue in operation longer than critics imagined, while financial results made passenger train service returning to private railroad operations infeasible.

1970s: The Rainbow Era

Amtrak began operations on May 1, 1971. Amtrak received no rail tracks or rights-of-way at its inception. All Amtrak's routes were continuations of prior service, although Amtrak pruned about half the passenger rail network. Of the 366 train routes that operated previously, Amtrak only continued 184. On the routes that were continued (to the extent possible), schedules were retained with only minor changes from the '' Official Guide of the Railways'' and under the same names. Several major corridors became freight-only, including the ex- New York Central Railroad's Water Level Route from New York to Ohio and Grand Trunk Western Railroad's Chicago to Detroit route. The reduced passenger train schedules created confusion amongst staff. At some stations, Amtrak service was only available late at night or early in the morning, prompting complaints from passengers. Disputes with freight railroads over track usage caused some services to be rerouted, temporarily cancelled, or replaced with buses.

Amtrak inherited problems with train stations (most notably deferred maintenance) and redundant facilities that competed with companies serving the same areas. On the day it started, Amtrak was given the responsibility of rerouting passenger trains from the seven train terminals in Chicago ( LaSalle, Dearborn, Grand Central, Randolph, Chicago Northwestern Terminal, Central, and Union) into just one, Union Station. In New York City, Amtrak had to pay and maintain both the Penn Station and the Grand Central Terminal due to the lack of track connections to bring trains from upstate New York into Penn Station; a problem that was rectified once the Empire Connection was built in 1991. Amtrak had to abandon numerous large stations whose upkeep could no longer be justified. On the other hand, the creation of the Los Angeles–Seattle '' Coast Starlight'' from three formerly separate train routes was an immediate success, resulting in an increase to daily service by 1973.

Needing to operate only half the train routes that were owned by the private railroads, Amtrak originally picked around 1,200 of the best passenger cars to lease from the 3,000 that the private railroads had owned. All were air-conditioned, and 90% were easy-to-maintain stainless steel. When Amtrak took over, passenger cars and locomotives initially retained the paint schemes and logos of their former owners which resulted in Amtrak running trains with mismatched colors – the "Rainbow Era". In mid-1971, Amtrak began purchasing some of the equipment it had leased, including 286 EMD E and F unit diesel locomotives, 30 GG1 electric locomotives and 1,290 passenger cars. By 1975, the official Amtrak color scheme was painted on most Amtrak equipment and newly purchased locomotives and the rolling stock began appearing.

Amtrak soon had the opportunity to acquire rights-of-way. Following the bankruptcy of several northeastern railroads in the early 1970s, including Penn Central, which owned and operated the Northeast Corridor (NEC), Congress passed the Railroad Revitalization and Regulatory Reform Act of 1976. A large part of the legislation was directed to the creation of Conrail, but the law also enabled the transfer of the portions of the NEC not already owned by state authorities to Amtrak. Amtrak acquired the majority of the NEC on April 1, 1976. (The portion in Massachusetts is owned by the Commonwealth and managed by Amtrak. The route from New Haven to New Rochelle is owned by the Metropolitan Transportation Authority and the Connecticut Department of Transportation as the New Haven Line.) This mainline became Amtrak's "jewel" asset, and helped the railroad generate revenue. While the NEC ridership and revenues were higher than any other segment of the system, the cost of operating and maintaining the corridor proved to be overwhelming. As a result, Amtrak's federal subsidy was increased dramatically. In subsequent years, other short route segments not needed for freight operations were transferred to Amtrak.

In its first decade, Amtrak fell far short of financial independence, which continues today, but it did find modest success rebuilding trade. Outside factors discouraged competing transport, such as fuel shortages which increased costs of automobile and airline travel, and strikes which disrupted airline operations. Investments in Amtrak's track, equipment and information also made Amtrak more relevant to America's transportation needs. Amtrak's ridership increased from 16.6 million in 1972 to 21 million in 1981.

In February 1978, Amtrak moved its headquarters to 400 N Capitol Street W, Washington D.C.

1980s and 1990s

In 1982, former Secretary of the Navy and retired Southern Railway head William Graham Claytor Jr. came out of retirement to lead Amtrak. Despite frequent clashes with the Reagan administration over funding, Claytor enjoyed a good relationship with John H. Riley, the head of the Federal Railroad Administration (FRA), and with members of Congress. Limited funding led Claytor to use short-term debt to fund operations.

Building on mechanical developments in the 1970s, high-speed Washington–New York Metroliner Service was improved with new equipment and faster schedules. Travel time between New York and Washington, D.C. was reduced to under 3 hours. According to the 1980 Amtrak Annual Report, a converted 12-car set saved the company approximately $250,000 a year in fuel (equal to about $,000 in ), maintenance and yard support costs. Amtrak completed the head-end power conversion program in 1982. Demand for passenger rail service resulted in the creation of five new state-supported routes in California, Illinois, Missouri, Oregon and Pennsylvania, for a total of 15 state-supported routes across the nation.

Ridership stagnated at roughly 20 million passengers per year amid uncertain government aid from 1981 to about 2000. Thomas Downs succeeded Claytor in 1993. Amtrak's stated goal remained "operational self-sufficiency". By this time, however, Amtrak had a large overhang of debt from years of underfunding, and in the mid-1990s, Amtrak suffered through a serious cash crunch. Under Downs, Congress included a provision in the Taxpayer Relief Act of 1997 that resulted in Amtrak receiving a $2.3 billion tax refund that resolved their cash crisis. However, Congress also instituted a "glide-path" to financial self-sufficiency, excluding railroad retirement tax act payments.

George Warrington became president in 1998 with a mandate to make Amtrak financially self-sufficient. Passengers became "guests" and there were expansions into express freight work, but the financial plans failed. Amtrak's inroads in express freight delivery created additional friction with competing freight operators, including the trucking industry. Delivery was delayed of much anticipated high-speed trainsets for the improved ''Acela'' service, which promised to be a strong source of income and favorable publicity along the Northeast Corridor between Boston and Washington, D.C.

Growth in the 21st century

Ridership increased during the first decade of the 21st century after the implementation of capital improvements in the NEC and rises in automobile fuel costs. The inauguration of the high-speed ''Acela'' in late 2000 generated considerable publicity and led to major ridership gains. However, through the late 1990s and very early 21st century, Amtrak could not add sufficient express freight revenue or cut sufficient other expenditures to break even. By 2002, it was clear that Amtrak could not achieve self-sufficiency, but Congress continued to authorize funding and released Amtrak from the requirement. In early 2002, David L. Gunn replaced Warrington as president. In a departure from his predecessors' promises to make Amtrak self-sufficient in the short term, Gunn argued that no form of passenger transportation in the United States is self-sufficient as the economy is currently structured. Highways, airports, and air traffic control ''all'' require large government expenditures to build and operate, coming from the Highway Trust Fund and Aviation Trust Fund paid for by user fees, highway fuel and road taxes, and, in the case of the General Fund, from general taxation. Gunn dropped most freight express business and worked to eliminate deferred maintenance.

A plan by the Bush administration "to privatize parts of the national passenger rail system and spin off other parts to partial state ownership" provoked disagreement within Amtrak's board of directors. Late in 2005, Gunn was fired. Gunn's replacement, Alexander Kummant (2006–08), was committed to operating a national rail network, and, like Gunn, opposed the notion of putting the Northeast Corridor under separate ownership. He said that shedding the system's long-distance routes would amount to selling national assets that are on par with national parks, and that Amtrak's abandonment of these routes would be irreversible. In late 2006, Amtrak unsuccessfully sought annual congressional funding of $1 billion for ten years. In early 2007, Amtrak employed 20,000 people in 46 states and served 25 million passengers a year, its highest amount since its founding in 1970. '' Politico'' noted a key problem: "the rail system chronically operates in the red. A pattern has emerged: Congress overrides cutbacks demanded by the White House and appropriates enough funds to keep Amtrak from plunging into insolvency. But, Amtrak advocates say, that is not enough to fix the system's woes."

Joseph H. Boardman replaced Kummant as president and CEO in late 2008.

In 2011, Amtrak announced its intention to improve and expand the high-speed rail corridor from Penn Station in NYC, under the Hudson River in new tunnels, and double-tracking the line to Newark, NJ

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