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[quote user="schlimm"] [quote user="Sam1"]mtrak is a government sponsored commercial enterprise. It has issued stock (preferred and common), and was formed with the stated intention to covered its costs out of the fare box. [/quote] A reading of the Rail Passenger Service Act of 1970 does not state that the National Rail Passenger Corporation  (Amtrak) is to cover its costs out of the fare box.  What it does say are two somewhat contradictory statements. I am providing the link:  <a href="http://bulk.resource.org/gao.gov/91-518/00005088.pdf">http://bulk.resource.org/gao.gov/91-518/00005088.pdf</a> On page 4:  "The Corporation shall be a for profit corporation, the purpose of which shall be to provide intercity rail passenger service." On page 7:  "At the time of its annual report, the corporation shall submit such legislative recommendations as it deems desirable, including the amount of financial assistance needed for operations and for capital improvements" IMO, there was a recognition that although ideally Amtrak should turn a profit, realistically it could not fulfill its clearly stated purpose without financial assistance from Congress annually. [/quote] A stock company is expected to earn a positive return, i.e. net income that closes to retained earnings as profit. That is the way Amtrak was set-up as you have noted. It is governed by GAAP as opposed to GAAS. Had the sponsors expected Amtrak to be a permanent ward of the state, they probably would have set it up as a government sponsored entity like the FDIC, Federal Home Loan Bank, etc. and subjected its accounting to GAAS. The annual financial statements of the company look like those for a stock company; not like those for a government agency. Moreover, this statement from the auditors report lends credence to the notion that Amtrak was expected to function like a commercial enterprise:  "The Company accounts for its income taxes in accordance with FASB ASC Topic 740, Income Taxes. Had the intent been for the company not to cover its expenses and earn a profit, there would be no need for a provision for income taxes.  Based on my readings Amtrak's supporters recognized that it would need some financial assistance during the transition years, i.e. the first three to five years of operations. Eventually it was expected to be self sustaining.  Whether that was a realistic expectation is another matter.   Amtrak does not have to cover all its costs through the fare box; it could and does get some return from support activities, i.e. management services, managed operations, subsidiary corporations, etc. However, its primary mission is to carry passengers, which means that it is expected to realize most of its revenues from ticket sales.   Amtrak has failed as an on-going commercial enterprise. Whether it has been a successful social and political experiment is debatable. If one believes that passenger rail is a public good, it has been a modest success. If one believes that the government has no business calling winners and losers in transportation, it has not been a success.  It has lost more than $28 billion since its inception. However, as noted in my post, the FDIC, FCIC, etc. have achieved their objectives, i.e. covered their costs through premiums and fees. At the end of the day it does not matter.  We have what we have.  The key question is what is the best way forward?  History should have no impact in defining the problem and developing workable solutions, although it may shed some light on what to stay away from.   The primary intent of my response was to refute the argument that no other government sponsored commercial activities earn a profit or cover their expenses through fees, premiums, etc.
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