Amtrak's Uncertain Future

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A federal oversight panel declared Friday that Amtrak will not meet a congressional deadline for achieving financial self-sufficiency, a finding that forces Amtrak to draw up a plan for its own liquidation.

The 6-5 vote by the Amtrak Reform Council does not mean Amtrak will close. Congress will review Amtrak's liquidation plan and a proposal to be drawn up by the council for a restructured national passenger rail system. Congress then will make a final decision about the future of Amtrak and rail service.

Congress already is considering Amtrak's future and what role if any the railway will play in developing high-speed trains around the country. The Bush administration also is working on a plan for passenger rail, though deliberations have been delayed by the terrorist attacks.

Congress created the council in 1997 to evaluate Amtrak's finances and to make a definitive judgment about the railway's financial viability. Since then, Amtrak has made progress toward weaning itself from federal operating subsidies but the council said it still won't meet Congress' deadline of Dec. 2, 2002.

Once the dominant means of long-distance transportation, U.S. rail service declined in the 20th century as automobiles, then air service, flourished. By the 1960s, railroads wanted out of their passenger-service obligations so they could concentrate on freight delivery.

Congress and President Nixon responded in 1970 by creating the part-public, part-private National Rail Passenger Corp. It took the nickname Railpax but quickly changed to Amtrak.

At an inaugural service in New York on May 1, 1971, then-Transportation Secretary John Volpe predicted a new era in rail service and said Amtrak would break even financially in about three years.

Almost immediately, pressures mounted. Amtrak spokesmen warned Congress that the railway would need more money than had been anticipated. Lawmakers wasted no time in demanding service to their states.

Amtrak fell far short of its promise to become profitable within a few years. But as Washington focused on crises like Vietnam and Watergate, Amtrak continued to roll on — and to lose money.

To stem losses, in 1995 Amtrak cut train service by about 12 percent and laid off about 2,000 workers. Last year, Amtrak President George Warrington rejected more cuts and announced Amtrak would pursue new routes and business opportunities such as time-sensitive package delivery.

Amtrak staked its future on European-style high-speed rail. Its first effort, the Acela Express, began service a year ago and reaches a top speed of 150 mph for a short span between Boston and New York.

Thanks in part to revenue from Acela Express, Warrington said last spring, Amtrak was on track to meet the deadline for self-sufficiency. But by late summer Amtrak acknowledged Acela Express was falling short of ridership and revenue projections.


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  • CBSNews.com staff CBSNews.com staff

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