Like Trains? Then Choo-Choose to Learn About Federal Rail Policy

Railways play a key role in American transportation and commerce, moving 28% of U.S. goods and tens of thousands of people across the country every day. The United States boasts 140,000 miles of freight rail lines underpinning an $80 billion industry that employs roughly 167,000 people. Meanwhile, Amtrak, the primary provider of U.S. passenger rail connecting people across rural and urban America, reported record ridership in fiscal year 2024 with 32.8 million passengers. From the crucial Northeast passenger rail corridor to the nation’s largest freight hub in Chicago, rail has the potential to play a key role in a decarbonized transportation sector by displacing emissions from cars, trucks, and planes. 

This Environmental and Energy Study Institute (EESI) briefing explored the past, current, and future role of rail in the U.S. transportation sector and highlighted key rail programs under the surface transportation bill. Speakers also described opportunities to modernize railways through electrification, faster trains, track expansion, and safety improvements.

This briefing was part of a series focused on the role of federal transportation and infrastructure investments in strengthening communities, increasing economic opportunity, building resilience, and reducing greenhouse gas emissions in the lead up to the next surface transportation reauthorization bill. View the full briefing series at eesi.org/transit-briefings.

Highlights

KEY TAKEAWAYS

Passenger rail is an efficient way to move people around. A two-track railroad can move as many people per hour as a 16-lane highway (assuming each person drove alone).  It is widely accepted that passenger rail is important in densely-populated areas of the country, but it is less known that passenger rail provides essential connectivity for less-densely populated states, rural America, and small towns.  Freight railways in the United States are privately owned, but partnerships with the local, state, and federal government are essential.  With the next reauthorization of the surface transportation bill, Congress has an opportunity to modernize the U.S. rail system, increase electrification, invest in faster trains, expand routes, and enhance safety measures.

Representative Valerie Foushee (D-N.C.)

• As the United States faces rising greenhouse gas emissions from transportation and aging infrastructure, rail is one of the cleanest paths forward.
• In 2023, the U.S. Department of Transportation (DOT) announced the largest federal grant award in North Carolina's history at almost $1.1 billion. This grant provides funding to design and build rail service that will connect the existing passenger rail line in North Carolina to the larger Northeast rail corridor, including direct service to Washington, D.C. 
• In 2024, North Carolina experienced record-breaking rail ridership for the third consecutive year, with a 55% increase in ridership since 2019. 
• More people traveling by rail means less traffic on the roads, less air pollution, less road degradation, and more economic opportunities in the rail industry. 
• With the next reauthorization of the surface transportation bill, Congress has an opportunity to modernize the U.S. rail system, increase electrification, invest in faster trains, expand routes, and enhance safety measures.

 

John Robert Smith, Chair, Transportation of America 

• There is no form of transportation that is fully paid for by individual fares and tolls. Public funding supports roads, bridges, aviation, public transportation, and rail. 
• The Highway Trust Fund, funded by the gas tax and designed to build out and maintain highways, became insolvent in 2008. As of 2025, approximately $270 billion from the General Fund has been allocated to highways. Some estimates suggest that the Highway Trust Fund could have a net deficit of $600 billion or more by 2035, absent the General Fund.
• In the early 1960s, the U.S. passenger rail system was fairly robust, but it has been hollowed out over time. This surface transportation reauthorization presents an opportunity to revive the factor that made so many cities in the country viable: connectivity through rail.
• The bipartisan Passenger Rail Investment and Improvement Act of 2008 (P.L. 110-432) was the first law to provide significant funding to Amtrak.
• The bipartisan FAST Act of 2015 (P.L. 114-94) was the first transportation reauthorization that included Amtrak. It created two programs: the Consolidated Rail Infrastructure and Safety Improvements Program and the Restoration and Enhancement Grant. 
• The bipartisan Infrastructure Investment and Jobs Act of 2021 (IIJA) (P.L. 117-58) included programs that focus on partnerships such as the Corridor Identification and Development Program, which identified 69 possible rail corridors that connect states and cities, and the Interstate Rail Compacts Grant Program, which provided funding for 10 interstate compacts with the Southern Rail Commission as the model. 
• Amtrak cannot keep up with the demand for more lines and they lack sufficient equipment for expansion.  
• The next reauthorization can incentivize additional passenger rail providers to enter the market to create healthy competition, give those providers the indemnification and liability coverage that Amtrak enjoys, and provide a national equipment pool that all providers can access. 

 

Elaine Nessle, Executive Director, Coalition for America’s Gateways and Trade Corridors

• Freight movement requires a multimodal approach to transportation because, though rail is an essential part of the movement of goods, shipping and trucks are also key pieces.
• Class I railroads in the United States are private companies that own and invest in all of their own infrastructure. Short-line railroads are also private companies that own their infrastructure, but they are much smaller. The short-line railroad companies have varied abilities to invest in safety and infrastructure, but they serve critical markets often connecting rural areas to Class I railroads.  
• The IIJA invested in seven major programs supporting freight rail:
  • $5 billion to the Consolidated Rail Infrastructure and Safety Improvements Program,
  • $3 billion to the Rail Crossing Elimination Program,
  • $2.25 billion to the Port Infrastructure Development Program,
  • $8 billion to the Infrastructure for Rebuilding America program,
  • $5 billion for National Infrastructure Project Assistance,
  • $7.5 billion for the Better Utilizing Investments to Leverage Development Grant Program, and
  • $7.15 billion for the Freight Formula Program. 
• The Alameda Rail Corridor in Los Angeles, California, is a great example of collaboration between federal and state partners and the private sector. In 2005, the Alameda Rail Corridor was moved into a trench area to ensure that railway infrastructure could expand without disrupting Los Angeles’s heavily congested roadways. About 30% of the freight traffic from the Ports of Los Angeles and Long Beach runs through this corridor at 40 miles per hour.    
• The Chicago Region Environmental and Transportation Efficiency (CREATE) program in the Chicago metropolitan area is another example of collaboration. All the Class I railroads meet in Chicago, and this program works with these companies to separate freight lines from passenger rail lines so that people and goods can move efficiently and at the same time.  
• Partnering with communities as well as the federal government to make sure the impacts of nationally-significant freight movement on communities are minimized is key.

 

Sean Jeans-Gail, Vice President, Government Affairs and Policy, Rail Passengers Association

• Passenger rail is an efficient way to move people around. A two-track railroad can move as many people per hour as a 16-lane highway (assuming each person drove alone). 
• Passenger rail should benefit from the general fund transfers to the Highway Trust Fund.
• Formula funding would be helpful for passenger rail. Discretionary grants are the dominant source of federal funding for the sector right now, and they are time-intensive to apply for and administer. Formula funds would allow state and local entities to invest with more confidence that federal funds will be available to supplement their work.  
• The Federal Railroad Administration’s Long-Distance Service Study collected input from over 50,000 Americans as well as local governments, states, associations, and Class I railroads to produce a blueprint of a plan to make intercity rail more accessible. There are no concrete next steps, but one option could be to establish a national long-distance rail service commission. The Gulf Coast Working Group could be a model. They successfully brought back a segment of passenger rail in 2025 that was wiped out by Hurricane Katrina. 

• Planning and permitting processes and timelines are hindering the growth of passenger rail. 

 

Q&A

 

Q: Can you explain the concept of a national equipment pool for passenger rail?

Jeans-Gail

• There is not necessarily an industry-wide consensus on what this would look like. The Next Generation Equipment Committee convened a group of states and Amtrak to explore the idea. There is room for a stronger federal role.
• Part of the concept is that it would allow operators other than Amtrak to provide rail service and introduce some healthy competition in the sector. 

Smith

• There is a need to standardize the passenger rail equipment that is used across the country. 
• The Federal Railroad Administration has approved a standard of rail equipment. 
• Amtrak does not have sufficient equipment to operate all its services and have back-up equipment. Therefore, it is not possible to focus on expansion at this time. 

Nessle

• The equipment needs and uses in the freight transportation industry are constantly changing.

 

Q: How does private ownership of the Class I railroads impact how rail transportation works in the United States? What does this private ownership mean for supply chains? What does it mean for passenger rail service?

Nessle

• The freight railroad industry has benefited from private ownership, which allows it to react faster and make investments quicker. 

Smith

• The Federal Railroad Administration and the Surface Transportation Board could be more involved in helping settle disagreements between Class I railroads and passenger rail. 
• In the case of the Gulf Coast rail project, freight rail asked for $2.4 billion in funding to make upgrades in order to make their rail infrastructure available to the passenger service. However, this level of funding was not available. Working through a Surface Transportation Board process, the board found that the aggrieved party was neither Amtrak nor the freight railroads, it was the people of the Gulf that had been denied service. The board pushed the project forward with $200 million in federal funding for infrastructure.
• The Passenger Rail Advisory Committee is working to expedite the process for resolving conflicts.

Jeans-Gail

• The Virginia Passenger Rail Authority acquired the Washington, D.C., to Richmond CSX mainline. Freight trains still run on this line, but Virginia determines the investments, dispatching practices (e.g., maximum train length ), and train schedules.

 

Q: How could Congress ease the state-level expenses related to leasing and or acquiring land for railway expansion?

Jeans-Gail 

• Advanced acquisition authority and tax credits for railroads that sell their rights of way could help bolster rail transportation ambition at the state level.
• Sustained federal investments in passenger rail would create the conditions for states to also make more significant investments. 

Smith

• Federal partners would help accelerate expanded passenger rail. 
• Acquisition of unused right-of-way space, where freight companies have removed track, could spur investment in passenger rail, especially in certain corridors. 

 

Q: What should Congressional staff watch for the rest of this calendar year that may inform how the surface transportation reauthorization moves ahead next year? 

Smith

• It is widely accepted that passenger rail is important in densely-populated areas of the country, but it is less known that passenger rail provides essential connectivity for less-densely populated states, rural America, and small towns. 
• Passenger rail has long been a bipartisan issue. 

Nessle

• While IIJA was advertised as a “once-in-a-generation investment,” that scale of investment is actually needed on an ongoing basis. 
• Since the IIJA’s passage in 2021, the cost of building has gone up 50%. 

Jeans-Gail

• The Rail Passenger Association is tracking the level of funding for Amtrak in the fiscal year 2026 budget and appropriations process, which will help stakeholders to understand what might be possible in the reauthorization.  

 

Compiled by Jasmine Wynn and Isabel Rosario-Montalvo and edited for clarity and length. This is not a transcript.