On March 11, President Biden submitted his Administration’s budget request for fiscal year 2025, which included funding for Amtrak and other Federal Railroad Administration grant programs. Three days later, Amtrak submitted its own budget request to Congress, which proposed a vastly different funding scheme for Amtrak and passenger rail in general.

New Discretionary Spending. The two requests seem to have been written on different worlds. The President’s budget was written here on Earth, where, last June, Congress and the President agreed to enact the Fiscal Responsibility Act, which brought back legally binding ceilings on total annual (“discretionary”) appropriations. Fiscal year 2024 is being closed out under a “cap” of $703.7 billion in non-defense discretionary appropriations, and the cap for fiscal year 2025 only rises by $7 billion, to $710.7 billion.

Amtrak’s own budget request was apparently written elsewhere in the multiverse, where there is no Fiscal Responsibility Act and no spending caps. Where the White House requested a $1.200 billion appropriation for Amtrak’s Northeast Corridor account, Amtrak itself wants $1.580 billion. And where the White House asked for $1.305 billion for Amtrak’s National Network, the railroad itself asked for $2.42 billion.

Amtrak is also asking for several other USDOT programs to be increased above the levels requested by the White House. All told, Amtrak wants to increase total USDOT discretionary appropriations by one-third over the White House request, from $27.7 billion up to $34.1 billion:

Because the President’s budget, and the enacted FY 2025 bills, have to fit all that under a $710.7 billion non-defense cap, Amtrak’s extra $8.4 billion would have to be deducted from other transportation programs, or housing, or the environment, or education, etc. That is clearly not going to happen, and the eventual 2025 DOT Appropriations Act funding levels for the Federal Railroad Administration will wind up looking a lot more like the White House request than the Amtrak request.

Overall FRA Budget (Including IIJA). However, the Federal Railroad Administration is unique amongst the modes in the degree to which its regular, annual budget is supplemented by one-time-only advance appropriations made in 2021 by the Infrastructure Investment and Jobs Act. To wit:

What will get cut? If and when Congress makes appropriations for 2025 for Amtrak that are more in the ballpark of the Biden request ($1.2 billion NEC, $1.5 billion NN) rather than Amtrak’s own request ($1.58 billion NEC, $2.42 billion NN), what programs would be affected? Well, this exhibit from Amtrak’s own request shows the two budget accounts, each divided into two categories: “base needs,” and capital “modernization” projects.

The Administration’s $1.2 billion request for the Northeast Corridor is $174 million more than the NEC’s “base needs,” so that extra money could be divided amongst NEC capital renewal, Washington Union Station improvements, Airo cars, or other items, or partially applied to NEC trip time improvement.

However, the White House’s $1.305 billion request for the National Network is already $293 million below what the railroad says is necessary for “base needs” in 2025. Apply the $104 million “contingency” line to that and they are still $189 million in the hole, so none of the $823 million in modernization projects could be funded in 2025, including the $250 million for Chicago Union Station, a natural priority of Transportation-HUD Appropriations Subcommittee ranking minority member Mike Quigley (D-Windy City).

Operating losses. The National Network’s base needs include $748.7 million of federal funds to cover operating losses of long-distance trains (except the AutoTrain) and the state-supported route trains. This includes a $60 million placeholder for insurance and police/security expenses that were previously borne by states but have been switched to Uncle Sam in a new cost-sharing methodology.

Why the massive operating losses? Well, the passenger traffic has clearly recovered from COVID on all three kinds of trains (Northeast Corridor, State-Supported Routes, and Long Distance):

And with those passengers comes their ticket money, which has also recuperated to the pre-COVID level:

However, despite the recovery on the revenue side, operating losses persist:

Under the NEC-NN account structure established in 2015, the NEC trains’ operating profits stay in that account and are applied to NEC capital costs, while the operating losses of the SSR and LD trains in the National Network account are picked up by Uncle Sam. The $184.2 million SSR loss and the $494.5 million LD loss, plus the $60 million placeholder mentioned earlier, approximately equal the requested $748.7 million request for FY25 operating subsidy appropriations.

Those operating losses persist, the FAQ section of Amtrak’s budget request says, because the IIJA provided Amtrak with so much capital-only money, which “is creating new costs that have to be considered ‘operating’ costs rather than ‘capital’ expenses under generally-accepted accounting principles (GAAP). While Amtrak’s ridership is now returning to pre-pandemic levels, the company has lost years of ridership and revenue growth, and (like the rest of the travel industry) is experiencing a continuing reduction in high-revenue business travelers; at the same time, expenses have grown significantly due to price inflation. As a result, operating costs are expected to continue to exceed revenues for the next several years on a consolidated basis—although our total adjusted operating loss is expected to lessen as we rebuild our business. In the long term, Amtrak seeks to return to the record-level financial performance exhibited just before the pandemic, and the capital investments that Amtrak is making now will help the company to deliver a more valuable service; grow its market share; and generate much higher revenues while carrying many more passengers.”

Total cash flow. Amtrak’s cash flow numbers don’t directly link up to Amtrak’s appropriations request, because appropriated money gets transferred to Amtrak from FRA and can sit on Amtrak’s books for a year or more before actually being spent. In terms of cash flow, Amtrak looks to spend around $13 billion in fiscal year 2025, derived from the following sources and for the following programs:

IIJA Update. Now that we are at the mid-point of the IIJA (almost halfway through fiscal year 3 out of 5), Amtrak’s budget request included a summary of how the passenger railroad is spending its IIJA money. That law guaranteed Amtrak $22 billion in direct appropriations over five years, minus some oversight takedowns and a couple of other set-asides, which leaves $21.57 billion for Amtrak to spend on capital. Here is how that money has been, or is being, spent:

The Federal-State Partnership for Intercity Passenger Rail program was also provided $36 billion by the IIJA, and the law said that no more than $24 billion of that could go to Northeast Corridor projects. Since Amtrak owns the Northeast Corridor, and since the NEC is a bottomless well of capital needs, that effectively meant that $24 billion of the FSP money was going to go to projects where Amtrak was the applicant or at least a partner, which is why Amtrak has to set aside $1.6 billion of its direct IIJA grants money to serve as matching funds for the FSP money. Some $16 billion of that NEC set-aside from the Federal-State Partnership program has now been awarded by USDOT:

In addition to its main budget request document, Amtrak also submitted an updated asset line and service line plan containing much more financial and operating data, looking five years into the future.