Summary: Amtrak's management recently estimated that its revenue for fiscal year (FY) 1978 would be $323.1 million and that operating expenses of $901.1 million would be incurred. The federal operating subsidy for the year is expected to be $536 million. Amtrak has placed its government operating subsidy requirement for FY 1979 at $613 million, but the administration's budget proposes $510 million. If Amtrak's subsidy is to be reduced significantly from the amounts asked for, substantial reductions in service will be necessary, including discontinuation of some of Amtrak's least-used and most heavily subsidized routes. There are a few areas in which Amtrak's management may be able to achieve better efficiency: maintenance, food and beverage service, labor costs, and work rules. Amtrak has identified several routes as potential corridors which may warrant development along the same lines as the northeast corridor. A review indicated that Amtrak's prospects for economic success on these additional corridors are bleak. Congress can make the following choices: (1) give Amtrak the subsidy it asked for and allow the present system to continue; (2) give Amtrak less subsidy than asked for and allow the system to be reduced; or (3) give Amtrak a larger subsidy and allow expanded service. Proposed legislation would require the Comptroller General to report on the fairness and consistency of Amtrak's annual financial statements and on the execution of Amtrak's management's duties and responsibilities.
