The subsidy awarded to Amtrak in 1971 was a $40 million grant plus $100 million in government-backed loans. The rail operator has received annual subsidies from the government ever since.
Most recently, Amtrak announced the allocation of $2.1 billion in federal funding to expand and improve its route network. The bulk of the award was earmarked for Amtrak partners to pay for infrastructure upgrades. Funding also went to local governments for rail corridor improvements and to Amtrak for station and service improvements.
Amtrak generates revenue via ticket sales, but it doesn't cover the company's operating expenses or capital costs. Amtrak's reported net losses in 2023 and 2022 were $1.7 billion and $1.8 billion, respectively. Without federal subsidies, passenger rail service in the U.S. would not survive. That's not uncommon for public transport systems -- many around the world are funded by their governments.
Supporters of Amtrak subsidies argue that keeping passenger rail alive in the U.S. delivers a range of positive externalities. These include energy efficiency and traffic reduction in urban areas. Rail travel also provides an alternate form of transportation, which can be critical during emergencies that affect fuel supplies and/or highways and roads.
Opponents say too few people use Amtrak to justify the cost. Routes in the northeast U.S. are popular, but ridership is inconsistent in other areas of the country. The heavy subsidies allow Amtrak to keep the unprofitable routes open, which may not be the best use of government resources.
