Hotline #19-A - February 2, 1998

President Clinton today released his federal budget proposals for fiscal 1999. For Amtrak, the budget raises more questions than it answers.

First, it calls for all new funding to come from the Highway Trust Fund. The Administration has tried this before, and failed. There is no reason to think success is any more likely now.

Second, the funding level is $621 million, all for capital. Comparing that with this year's funding is tricky because appropriators nominally gave Amtrak $793 million, but required Amtrak to pay the first $199 million of Taxpayer Relief Act [TRA] money back to the Treasury. More about that below. The Clinton $621 million is 22% below the $793 million, but 5% above the $594 million appropriators really gave Amtrak.

Third, the budget breaks faith with the Brotherhood of Maintenance of Way Employes agreement brokered by Transportation Secretary Rodney Slater. Under that agreement, Amtrak can void wage increases not yet paid if specific funding actions do not occur. Those actions include provision of enough additional operating assistance to correct shortfalls in 1996 and 1997 operating assistance, which the new budget clearly does not do, and reversing the "$199-million deduct" from the 1998 appropriation. One would not expect this to happen in the 1999 budget, but the logical place is in a supplemental appropriation the Administration is preparing.

Third, the Administration assumes the operating grant will be eliminated eight months from now, or three years ahead of schedule. The Administration relies on language in the TRA that makes maintenance of equipment an eligible use for the $2 billion that Amtrak gets under that law. Much maintenance of equipment expense is considered operating today, so this, again, will be a tough sell to a Congress that generally understood the TRA to be for long-term capital investment.

Fourth, even if equipment maintenance can be drawn from the TRA money, that money was only for two years ending in 1999. What would Amtrak use to pay for equipment maintenance in 2000 and after? Does the Administration propose the unlikely concept of restoring the operating grant after it didn't exist for a year?

As Peter Rogoff -- who works for Senator Lautenberg (D.-N.J.) -- stated in an excellent memo highly critical of Administration policy, "If OMB is not prepared to request sufficient funds for Amtrak in fiscal year 1999, why should we expect them to request sufficient amounts in future years?" Rogoff's entire memo can be seen at the web site of the United Transportation Union, or send NARP a self-addressed/stamped envelope and $2.

The kindest thing one can say about the Administration's approach is that use of the Highway Trust Fund is an appealing idea to many of us. But it is a long shot. The Administration's position may well, in Rogoff's words, "undermine the efforts of Amtrak's congressional friends in obtaining Amtrak funding for fiscal year 1999 that is consistent with the railroad's needs and its pending labor agreements."