Amtrak is in its worst financial shape ever.
According to a report issued by the government today, the national passenger railroad is carrying debt topping $3 billion, and it lost $944 million last year alone, despite a growing ridership of 22.5 million passengers.
"Over the past couple of years ridership has gone up on Amtrak and so have their revenues, but they haven't come close to keeping pace with their expenses," says Ken Mead, the Department of Transportation's inspector general.
Amtrak is now admitting it cannot be expected to run a national railroad — which it is mandated to do by law — and still make money.
"I think the real question is what does America, what does the Congress, what does the administration, what do business leaders and heirs and governors and public policy makers really want us to be?" asks George Warrington, Amtrak's chief executive officer.
New Line: Losses Will Continue
But that's a new tune for Amtrak. For years, the railroad has insisted that profitability was just around the corner, and that it would no longer need government subsidies. Earlier this month, Warrington said Amtrak hoped to become profitable by 2003.
"The credibility gap is as wide as the Grand Canyon when year after year I sit on this committee and hear them come forward and say they are approaching financial viability," says Sen. John McCain, R-Ariz., chairman of the Senate Commerce Committee.
Some transportation experts say Congress is partly to blame for Amtrak's troubles. Lawmakers, they claim, have underfunded the railroad while insisting money-losing trains keep rolling through their districts.
Of Amtrak's 41 routes, 10 lose more than $100 per passenger. And only a handful are profitable. The most successful route is the "Northeast Corridor" between Washington and Boston. But even there, profits Amtrak was banking on haven't rolled in, due to delays in the delivery of the railroad's new Acela high-speed trains.
Putting Up Penn Station
In an effort to have more cash on hand, Amtrak announced this week it was taking out a $300 million loan — and put up Penn Station, its main New York terminus, as collateral.
Amtrak did not reveal which lenders were involved in the deal, but it is the first time the railroad has taken out such a loan to keep its trains running.
The Bush administration has proposed a $521 million subsidy for Amtrak for the fiscal year starting in October.
But even between the subsidy and its loan, Amtrak will still need to become more efficient to stop the financial bleeding.
ABCNEWS' Lisa Stark and Reuters contributed to this report.