400 Transportation:Eliminate Grants to the National Rail Passenger Service Corporation (Amtrak)

Savings in Millions of Dollars
  • 2016
  • 2017
  • 2018
  • 2019
  • 2020
  • 2021
  • 2022
  • 2023
  • 2024
  • 2025
  • 2016-2020
  • 2016-2025


Savings are expressed as budget authority and were calculated using the FY 2014 enacted spending levels as found on pages 992–994 of “Appendix, Budget of the United States Government, Fiscal Year 2015,” 
March 2014. Under the baseline scenario, the FY 2014 enacted operating subsidy and capital improvement costs are assumed to increase at the same rate as discretionary spending for 2016–2025, according to the CBO’s most recent August 2014 baseline spending projections. Under the proposal, the operating subsidy is eliminated and the capital subsidy is phased out over five years. Savings represent the


Technical Notes on Scoring

CBO Baseline

Unless otherwise noted, calculations for savings for each recommendation relies on the most recent Congressional Budget Office baseline, as found in “An Update to the Budget and Economic Outlook: 2014 to 2024,” published August 27, 2014, has been used.

Savings “Totals”

While totals for the five and 10 year savings are provided by section and for the complete set of recommendations, there are two reasons they should not be viewed as representing total savings for The Budget Book.

First, as noted in the introduction, The Heritage Foundation would recommend that the savings realized in the Function 050 Defense section would stay within the Department of Defense to strengthen the nation’s defense capabilities.

Second, the numbers cannot be deemed to represent the realized savings if every single recommendation were adopted because policy changes made in one program can impact spending levels in other programs.  Thus, the numbers in the table do not reflect any potential interactions between the various policy changes affecting spending or savings.


Heritage Recommendation:

Eliminate the federal operating subsidy and phase out the capital programs over four years. This proposal saves $608 million in 2016, and $12.6 billion over 10 years. 


Amtrak has received over $66 billion in federal grants since its inception. End the waste & save billions.

The National Railroad Passenger Corporation, now known as Amtrak, was created by the federal government to take over bankrupt private passenger rail companies. It began service on May 4, 1971. In fiscal year 2014, it received an operating grant of approximately $340 million and a capital and debt service grant of about $1.05 billion. Amtrak has received over $66 billion (in 2014 dollars) in taxpayer-funded federal grants since its inception. Amtrak is not a federal agency, employing a corporate structure, and has a board appointed by the United States President; the federal government owns nearly all of Amtrak’s stock.

Amtrak is characterized by an unsustainable financial situation and management that often appears more focused on lobbying Congress for more money rather than improving its performance and service for customers. Amtrak has a monopoly on passenger rail service, too, which stifles reform efforts. Labor costs, driven by the generous wages and benefits required by union labor agreements, constitute half of Amtrak’s operating costs; this is an area ripe for reform. Amtrak trains are also notoriously behind schedule, evidenced by Amtrak’s poor on-time performance rates. For example, the June 2014 Monthly Performance Report showed an on-time performance score of 69.7 percent, which was 6.2 percentage points less than a year prior, when just over three-fourths of trips were on time. In July 2014, Amtrak’s score was 67.2 percent, 7.6 percentage points worse than in July 2013.

Congress should eliminate Amtrak’s operating subsidies immediately in FY 2016, while phasing out its capital subsidies over five years, to give Amtrak’s management time to modify business plans, work more closely with the private sector, reduce labor costs, change its marketing, and eliminate any money-losing lines. Simultaneously, the Secretary of Transportation should set up a task force to work with Amtrak’s management to lay out a future for Amtrak, including but not limited to selling routes and equipment to the private sector, transferring Amtrak ownership to its employees, asking states to assume ownership and responsibility over routes, and discontinuing routes that are unprofitable and that a state does not want to fund. During this phase-out, Congress should repeal Amtrak’s monopoly on passenger rail service, allowing private companies to enter the market and provide passenger rail service where they see a viable commercial market.

* Note: A previous version of the figures related to eliminating grants to Amtrak contained an error which overstated the proposed savings. The savings for that specific proposal, as well as the transportation savings subtotal, were updated as of June 24, 2015.

Amtrak has received over $66 billion in federal grants since its inception. End the waste & save billions.

Contributing Expert

Emily Goff advances conservative solutions to transportation and infrastructure challenges as policy analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

See publications by Emily Goff

Emily GoffPolicy Analyst, Transportation and Infrastructure

Heritage Expert

Diane Katz, who has analyzed and written on public policy issues for more than two decades, is a research fellow in regulatory policy at The Heritage Foundation.

See publications by Diane Katz

Diane KatzResearch Fellow in Regulatory Policy

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