Intercity Passenger Rail: Highlights of GAO Report on Need for
National Policy and Strategies to Maximize Public Benefits from
Federal Expenditures (18-JAN-07, GAO-07-382R).
The future of intercity passenger rail service in the United
States has come to a critical juncture. The National Railroad
Passenger Corporation (Amtrak) continues to rely heavily on
federal subsidies--over $1 billion annually in recent years--and
operating losses have remained high. In addition, Amtrak will
require billions of dollars to address deferred maintenance and
achieve a "state of good repair." These needs for Amtrak come at
a time when the nation faces long-term fiscal challenges. As we
reported in February 2005, the federal government's financial
condition and long-term fiscal outlook present enormous
challenges to the nation's ability to respond to emerging forces
reshaping American society, the United States' place in the
world, and the future role of the federal government. Addressing
the projected fiscal gaps will require policy makers to examine
the affordability and sustainability of all existing programs,
policies, functions, and activities throughout the federal
budget. Reexamining the federal role and expenditures on
intercity passenger rail service will be particularly difficult
because opinions differ about what this service should be. Some
advocate a greatly expanded federal role and the expansion of
intercity passenger rail to relieve growing congestion on
highways and airways and (as energy prices increase) to provide
more fuel-efficient transport; others believe the federal role
should be scaled back, and that at least some federal operating
subsidies should be eliminated. Specific proposals vary--while
one proposal would keep Amtrak largely intact and provide more
funding for capital and other improvements, another proposal
would significantly restructure the management and accountability
for intercity passenger rail with regional, state, and local
entities making fundamental decisions about what intercity
passenger rail services are justified and will receive public
financial support. Amtrak itself has proposed a new vision for
intercity passenger rail service that would include a greater
role for states in planning and developing passenger rail
corridors. The former acting president of Amtrak told us that, in
his view, Amtrak itself is not a substitute for a national
intercity passenger rail policy and that Congress needs to
develop such a policy. One of the primary difficulties in
reexamining the federal role and expenditures on intercity
passenger rail service and developing a clear national intercity
passenger rail policy will be reconciling the wide diversity of
views about what this service should be and what it should
achieve. On November 13, 2006, we issued our most recent report
on intercity passenger rail. The objectives of this report were
to determine: (1) the characteristics of the current U.S.
intercity passenger rail system and the potential benefits
obtained from this system, (2) foreign experiences with passenger
rail reform and observations for the United States, (3) how well
the United States is positioned for reforming its intercity
passenger rail system, (4) challenges the United States faces in
overcoming obstacles to reform, and (5) potential options for the
future of intercity passenger rail service.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-382R
ACCNO: A64991
TITLE: Intercity Passenger Rail: Highlights of GAO Report on
Need for National Policy and Strategies to Maximize Public
Benefits from Federal Expenditures
DATE: 01/18/2007
SUBJECT: Accountability
Federal aid to railroads
Federal funds
Federal/state relations
Financial analysis
National policies
Passengers
Policy evaluation
Railroad industry
Strategic planning
Transportation
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GAO-07-382R
* [1]PDF6-Ordering Information.pdf
* [2]Order by Mail or Phone
January 18, 2007
The Honorable Mary Peters
Chairperson
National Surface Transportation Policy
and Revenue Study Commission
Subject: Intercity Passenger Rail: Highlights of GAO Report on Need for
National Policy and Strategies to Maximize Public Benefits from Federal
Expenditures
Dear Madam Chairperson:
The future of intercity passenger rail service in the United States has
come to a critical juncture. The National Railroad Passenger Corporation
(Amtrak) continues to rely heavily on federal subsidies--over $1 billion
annually in recent years--and operating losses have remained high. In
addition, Amtrak will require billions of dollars to address deferred
maintenance and achieve a "state of good repair."^1 These needs for Amtrak
come at a time when the nation faces long-term fiscal challenges. As we
reported in February 2005, the federal government's financial condition
and long-term fiscal outlook present enormous challenges to the nation's
ability to respond to emerging forces reshaping American society, the
United States' place in the world, and the future role of the federal
government.^2 Addressing the projected fiscal gaps will require policy
makers to examine the affordability and sustainability of all existing
programs, policies, functions, and activities throughout the federal
budget.
Reexamining the federal role and expenditures on intercity passenger rail
service will be particularly difficult because opinions differ about what
this service should be. Some advocate a greatly expanded federal role and
the expansion of intercity passenger rail to relieve growing congestion on
highways and airways and (as energy prices increase) to provide more
fuel-efficient transport; others believe the federal role should be scaled
back, and that at least some federal operating subsidies should be
eliminated. Specific proposals vary--while one proposal would keep Amtrak
largely intact and provide more funding for capital and other
improvements, another proposal would significantly restructure the
management and accountability for intercity passenger rail with regional,
state, and local entities making fundamental decisions about what
intercity passenger rail services are justified and will receive public
financial support. Amtrak itself has proposed a new vision for intercity
passenger rail service that would include a greater role for states in
planning and developing passenger rail corridors. The former acting
president of Amtrak told us that, in his view, Amtrak itself is not a
substitute for a national intercity passenger rail policy and that
Congress needs to develop such a policy. One of the primary difficulties
in reexamining the federal role and expenditures on intercity passenger
rail service and developing a clear national intercity passenger rail
policy will be reconciling the wide diversity of views about what this
service should be and what it should achieve.
^1"State of good repair" is the outcome expected from the capital
investment needed to restore Amtrak's right-of-way (track, signals, and
auxiliary structures), other infrastructure (e.g., stations), and
equipment to a condition that requires only routine maintenance.
^2GAO, 21^st Century Challenges: Reexamining the Base of the Federal
Government, GAO-05-325SP (Washington, D.C.: Feb. 2005).
On November 13, 2006, we issued our most recent report on intercity
passenger rail.^3 The objectives of this report were to determine: (1) the
characteristics of the current U.S. intercity passenger rail system and
the potential benefits obtained from this system, (2) foreign experiences
with passenger rail reform and observations for the United States, (3) how
well the United States is positioned for reforming^4 its intercity
passenger rail system, (4) challenges the United States faces in
overcoming obstacles to reform, and (5) potential options for the future
of intercity passenger rail service. In general, we found that the current
system is in poor financial condition and does not target federal funds to
where they provide the greatest public benefits, such as transportation
congestion relief. We also found that foreign experience with reform shows
that the United States needs to consider three key elements in attempting
any reform: (1) defining national policy goals, (2) defining the roles of
government and other participants, and (3) establishing stable funding.
The U.S. is currently not well positioned to address these reform elements
and there are a number of challenges to be overcome in addressing the key
reform elements, including the wide diversity of views in determining the
overall goal for passenger rail in the United States and the federal role
in achieving this goal. There are four primary options for the future
federal role in intercity passenger rail. These are keeping the existing
structure and funding of intercity passenger rail, making incremental
changes within the existing structure, discontinuing the federal role in
intercity passenger rail, and restructuring intercity passenger rail. Our
report recommends that Congress consider restructuring the approach for
providing intercity passenger rail service in the United States.
^3GAO, Intercity Passenger Rail: National Policy and Strategies Needed to
Maximize Public Benefits from Federal Expenditures, GAO-07-15 (Washington,
D.C.: Nov. 13, 2006).
^4For purposes of this report, the word reform is intended to cover both
incremental changes that might be made within the current structure of
intercity passenger rail, as well as more significant changes that could
be made, including wholesale restructuring in how intercity passenger rail
service is provided.
- - - - -
In light of these findings, you asked us to testify before the National
Surface Transportation Policy and Revenue Study Commission on January 17,
2007, about issues in our recent report. The enclosure is my presentation
to the Commission. A copy of our November 13, 2006, report (GAO-07-15) can
be found at www.gao.gov .
Sincerely yours,
JayEtta Z. Hecker
Director, Physical Infrastructure Issues
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(544135)
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