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Since 1869, when the Transcontinental Railroad was completed, a national rail service has played a key role in the United States' economic and transportation infrastructure. Through the mid-1940s, private railroads continued to play a dominant role in intercity passenger travel on a national scale. Plying the tracks of the freight rail industry, private-rail passenger service between America's growing urban centers faced little competition from other modes of transportation.

Following World War II, however, as the economy boomed and passenger miles-traveled dramatically increased, automobile and air modes of transportation dominated government transportation funding. Beginning in the 1950s, highway and air transportation modes received the majority of government transportation funding. Even today, passenger rail has no dedicated funding source similar to the Highway Trust Fund, established in 1956 to pay for the interstate highway system and other roads, and the Airport and Airway Trust Fund, created in 1970 to increase capacity in the rapidly growing air transportation market.

Passenger rail, operating then within the private sector, was provided no such programmed government subsidy. Faced with the emerging dominance of the automobile and mass-market air travel in the early 1960s, private passenger railroads began to lose money on their passenger routes and, by 1970, most had gone out of business.

Amtrak and Early Interest in High-Speed Rail

Congressional interest in high-speed passenger rail can be traced back to 1965 with the passage of the High Speed Ground Transportation (HSGT) Act, which began a federal effort to develop and demonstrate “contemporary and advanced HSGT technologies.” These efforts led to significant planning for, capital investments in, and service improvements in the Northeast Corridor linking Washington, D.C., and Boston, Massachusetts.

In 1970, Congress created the National Railroad Passenger Corporation—popularly known as Amtrak—as a private, for-profit, federally sponsored corporation to preserve intercity passenger service across the nation. In exchange for relieving private rail companies of their passenger responsibilities and associated financial losses, Amtrak was granted access to freight railroad companies' track, as well as travel priority over freight trains.

However, outside of the Northeast Corridor and a few states that invested in modernizing passenger rail routes within their jurisdictions, there was limited investment in the U.S. passenger rail system infrastructure or capacity. Regular federal appropriations were designated for Amtrak's capital needs and to cover operating deficits, and long-term infrastructure and investment planning was subsequently difficult.

The 1980s brought forth several studies of potential, “emerging,” high-speed passenger rail corridors and the emergence of states as leading drivers behind the planning for and development of high-speed rail services. Several states formed public-private partnerships to build and operate intercity high-speed rail systems. Since the 1980s, however, in the face of the need for continuing federal subsidies, Amtrak has continually faced political challenges to its survival. In spite of the fact that, since 1997, ridership on Amtrak has grown faster than all other major modes of travel, after a $700 million subsidy in 2005, it again faced elimination of its operating subsidies in the 2006 administration budget.

A New Vision for Passenger Rail

In early 2009, President Barack Obama's administration proposed “[a] combination of express and regional high-speed corridors, evolving from upgraded, reliable intercity passenger rail service.” It proposed a “down payment” of $8 billion in American Recovery and Reinvestment Act of 2009 funding and an additional $2 billion in annual appropriations to be allocated to completing individual “ready to go” passenger rail projects, and entering into cooperative agreements with states, or groups of states, to develop entire portions of corridors having completed corridor plans and environmental documentation.

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