Summary: Amtrak's financial condition has always been precarious, but it has declined steadily since 1990, to the point that its ability to offer service over a national route system of the current size is seriously threatened. It is unlikely that Amtrak can overcome its problems in financing, capital investments, and service quality--and continue to run the current 25,000-mile nationwide system--without significant increases in passenger revenues or funding, particularly for capital investment, from federal, state, and local governments. During the past several years, Amtrak has responded to deteriorating conditions by taking on debt, deferring maintenance, and cutting staff. Some of these actions have diminished the quality and reliability of Amtrak service. In December 1994, Amtrak announced an aggressive plan to reduce annual expenses by $430 million annually by reducing routes and service, retiring its oldest cars, cutting staff, and improving service and productivity. Although this plan is an aggressive first step, it will not solve the railroad's longer-term problems. In deciding future of intercity rail passenger service in the United States, Congress will need to consider the nation's expectation for such services and the scope of Amtrak's mission. Congress will also need to decide the appropriate role of the federal government in funding the operating losses and capital investments.
