Amtrak Won't Say When The Shutdown Will Force It To Close

A blog about business and economics.
Oct. 7 2013 4:22 PM

Amtrak Is in Trouble, But Congress Won't Care

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An Amtrak spokesperson said they can continue normal operations for "several weeks" during the government shutdown.

Photo by David McNeese/Getty Images for Amtrak

There are the sort-of obvious impacts of the government shutdown: no more baby formula for poor mothers in Idaho, no more loans for farmers in Missouri, no more Panda cam for the masses. Less obvious are the effects on the private-sector companies that depend on government subsidies. These range from the family-owned campground in a national park to Lockheed Martin.

Amtrak is one such company; it relies on significant subsidies from the Department of Transportation for its survival. The company has never seen a profit, and suffered a net loss of $1.2 billion in 2012. In its 2012 annual report, Amtrak was confident that federal funding wasn’t going anywhere, but said losing that funding would lead to operations cutbacks and, ultimately, bankruptcy.

So how long can it keep running with the federal government shut down? They won't quite say.

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“Amtrak is operating as normal and hasn't made any changes to operations or the passenger experience,” according to spokesperson Kimberly Woods. “America's Railroad can go several weeks with continuing normal operations.” How long is that? Woods declined to clarify.

Mathematically speaking, the company isn’t totally dependent on subsidies—as of last year, the company covered 88 percent of its operating costs with its own business revenue, but still needs the government funds “to sustain infrastructure, equipment and systems.”

More than 150 Amtrak trains run on the Northeast Corridor every day, and its Washington-New York City and New York City-Boston routes carry more passengers than all of the airlines along the same path. Back in April, (remember the sequester?) Congress selflessly voted to help the FAA reinstate its air traffic controllers so flights would take off on time. But if Amtrak has to eventually curtail its service because of the shutdown, it won’t have the benefit of threatening congressmen’s travel plans.

The shutdown could also take a hit on Amtrak's regular revenue, as fewer government workers are commuting in and out of Washington. But, happily for Amtrak, the shutdown may also mean more Washington-based journalists are taking the Acela up to New York City to talk about the government shutdown.

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