If Amtrack pauses its service segment-by-segment so they get to focus on re-building infrastructure then I believe It will not have that much of a negative impact on travelers, at least. People can always resort to other traveling alternatives(buses, cars, planes). Heck, it is economical to travel from NYC to DC by bus vs train. Train gets you in 3 hours for $200 and bus gets you in 4 hours for $19. For me, $200 is worth paying if I get to DC in an hour!
Yes there will be job displacements while the overhaul is underway. But for numbers sake, more job will be created as part of the overhaul.
By politics I assume you meant unions. It is a rabbit-hole debate but I will say this that unions have done more damage to the infrastructure progress than any other political entity in northeast USA.
