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Thereafter patronage declined in the face of competition from buses, air travel, and the automobile.New streamlined diesel-powered trains such as the Pioneer Zephyr were popular with the traveling public but could not reverse the trend.A Burlington Northern EMD F3 leads the North Coast Hiawatha into Yakima, Washington in July 1971, an example of early Amtrak "rainbow" consists, made up of equipment still painted in the colors of various freight cars Amtrak received no rail tracks or rights-of-way at its inception.All Amtrak's routes were continuations of prior service, although Amtrak pruned about half the passenger rail network.Proponents of the bill, led by the National Association of Railroad Passengers (NARP), sought government funding to ensure the continuation of passenger trains.They conceived the National Railroad Passenger Corporation (NRPC), a private entity that would receive taxpayer funding and assume operation of intercity passenger trains.Nearly everyone involved expected the experiment to be short-lived.The Nixon administration and many Washington insiders viewed the NRPC as a politically expedient way for the President and Congress to give passenger trains a "last hurrah" as demanded by the public.

Amtrak would abandon numerous large stations whose upkeep could no longer be justified.

On the other hand, the creation of the Los Angeles–Seattle Coast Starlight from three formerly separate trains was an immediate success.

Amtrak's early years are often called the Rainbow Era which refers to the ad hoc arrangement of the rolling stock and locomotives from a pool of equipment acquired by Amtrak at its formation, that consisted of a large mix of paint schemes from their former owners.

Matters were brought to a head on March 5, 1970, when the Penn Central, the largest railroad in the Northeast United States and teetering on bankruptcy, filed to discontinue 34 of its passenger trains.

In October 1970, Congress passed, and President Richard Nixon signed into law, the Rail Passenger Service Act.

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