Hotline #249 - June 28, 2002

A tentative agreement reached between Amtrak and the Bush Administration late on June 26 should mean that the immediate crisis -- the start of a shutdown of all Amtrak and many commuter services a week from now -- is averted. However, the tentative agreement has not been finalized, and negotiations are continuing on two sticking points. Amtrak President David Gunn, at a June 27 news conference, said the unspecified sticking points were things the Administration was demanding, but that Amtrak could not accept. He said agreement was "close" and that he was "reasonably hopeful." Amtrak and the Administration have been briefing Congressional leaders on the agreement, even as negotiations continue.

The Washington Post reported today that the two sticking points involved setting a target for cost savings in 2003 and keeping Amtrak from entering into labor agreements that would prevent contracting out work now done by union employees.

Amtrak has been seeking $200 million to resolve a cash crisis, allowing it to run its system through the rest of the fiscal year -- July, August, September. The money could have come either from a loan guarantee from the DOT, or as an appropriation from Congress.

The Bush Administration announced a set of long-term policy proposals for Amtrak on June 20 -- the same day as a Senate hearing in which Amtrak made clear the immediate, short-term cash threat. The DOT then insisted, in return for a loan guarantee, Amtrak agree to those long-term reforms. But some are controversial, and one in particular would make it unlikely Amtrak could operate nationwide service. The DOT began to tone down its calls to link short-term relief with immediate long-term reform on June 25, which mad the June 26 agreement possible.

The June 26 agreement would provide Amtrak with a loan guarantee for $100 million, enough perhaps to operate into mid-August. A joint Amtrak/DOT statement said that, in return, Amtrak would:

• Improve its "financial discipline and performance;"
• Make its "financial and operating performance transparent to the public;"
• Provide policy makers with a better understanding of its "long-term assets and liabilities, and its cost control and revenue options."

As for the remaining amount, DOT and Amtrak jointly will ask Congress for another $100 million in emergency appropriations and/or loan guarantees. In order to prevent another shutdown crisis in mid-August, Congress would need to take such action after its return from the Independence Day recess (July 9), and before the summer recess (July 26 in the House, August 2 in the Senate).

At the same time, it is important that fiscal 2003 appropriations (bills for which have not yet been introduced) provide Amtrak with its full request of $1.2 billion. The Administration's proposal remains at $521 million and would, if enacted, lead to even more fiscal crises in the coming year.

Before and after the agreement was announced, sentiment in Congress to appropriate the money, and thereby spare Amtrak the increased debt burden, was growing. Fifty Senators signed a letter June 25 urging President Bush to cooperate with their effort to add $205 million to the emergency supplemental appropriations bill (H.R.4775), to prevent an Amtrak shutdown. Click here to see if your Senator was one of them. A similar letter went the same day from almost 100 Representatives.

House-Senate conferees working on the emergency supplemental appropriations bill, H.R.4775, now have a tentative agreement on an overall funding total, $30.4 billion (but still more than President Bush has said he wants). There also seems to be agreement on including $205 million for Amtrak. The Senate, when it approved its version of this bill on June 7, included $55 million for Amtrak for security needs and car repair. It's not clear if that $55 million is still in the bill. Final negotiations on the bill will wait until after the Independence Day recess.

Appearing at a hearing on a different topic yesterday, Transportation Secretary Norman Mineta was sharply criticized by Senators who resent the Administration's insistence on last-minute, long-term reform demands as a condition for helping Amtrak through its immediate cash crisis. Use of a loan guarantee was criticized, for adding to Amtrak's debt load. Patty Murray (D.-Wash.), chair of the Senate Transportation Appropriations Subcommittee, said, "I object to putting Amtrak into any more debt to solve this crisis." Commerce Chairman Ernest Hollings (D.-S.C.) said to Mineta, "We've been trying to give you the money, if you would only accept it ... We've had no leadership whatsoever from your department on Amtrak."

Commerce Ranking Republican John McCain (Ariz.), for his part, said that the effort to prevent an Amtrak shutdown was just another "bailout," and that reform had to come, even if it means route cuts.

Rep. James Oberstar (Minn.), ranking Democrat on the House Transportation and Infrastructure Committee, along with 21 other Representatives, on June 26 introduced H.R.5024, a bill that directs the Department of Transportation to make $270 million in loan guarantees available to Amtrak.

S.1991, the National Defense Rail Act, now has 38 Senate sponsors, with the addition of Bahy (D.-Ind.) and Wellstone (D.-Minn.). This Hollings reauthorization bill for Amtrak runs for multiple years and does the most to stabilize and expand passenger rail services of all types.

H.R.2329, the Houghton-Oberstar High Speed Rail Investment Act, now has 192 sponsors, with the addition of Maloney (D.-Conn.) and Dingell (D.-Mich.).

Speaker of the House Dennis Hastert (R.-Ill.), going against the grain of most Congressional opinion, advocated cutting the size of the Amtrak network on the June 23 broadcast of NBC's "Meet the Press." "Well, I think that there are some places that they could shut down," he said. "That's all a part of reform." He also said you could fly people from New Orleans to Los Angeles for "$350" (a reference to the supposed loss-per-passenger on the Sunset Limited), but, since he admitted to not being "an expert on railroads," that remark assumes everyone on the train is going just between those two places. Of course, they are not, and it's highly doubtful you could fly from Pascagoula, Miss., to Alpine, Tex., for that (or possibly any) amount.

Amtrak announced a policy to limit on-board baggage carriage on June 26. The new policy formalizes a set of recommendations that Amtrak has promoted for a few years now. Passengers are limited to two carry-on bags per person. Exceptions are made for personal items like purses, laptop carriers, briefcases, and infant accessories. Checked baggage is an alternative for some people, provided they are using stations that have that service (the number of which is reduced since Amtrak's station staffing cuts this spring). Amtrak has said the policy is meant to enhance passenger safety. The size limit of a carry-on bag is that of a "medium-sized Pullman suitcase" (i.e., 14 by 22 by 28 inches).

Additionally, passengers are required to put identification tags on all carry-on bags (except for the exceptions listed above). In any event, identification of such bags is common sense.

The Amtrak station at Raton, N.Mex., regained checked baggage service (and daily hours) effective June 19. It is served by the Southwest Chief and bus from Denver.

Amtrak's Boston-Portland Downeaster service gains another station July 1. Trains will begin serving the Anderson/Woburn (Mass.) station, which opened for service on the MBTA Lowell Line earlier this year. The new station is convenient to I-95/Rte. 128, and features shuttle buses to Logan Airport.

The Chicago-Detroit route is being affected by track work projects, as reported here June 7. Additionally, one pair of trains -- 350 and 353 -- will not run during the week (Monday through Thursday) through September 30, to accommodate the work. Trains 350 and 353 will run Friday through Sunday. Train 355, which normally originates in Detroit, will instead originate in Pontiac, Monday through Thursday, during that period.

Cascade Corridor trains 760 and 763 will not operate north of Bellingham, Wash., July 1 only, due to track work. There will be a replacement bus.

Another track work project will result in a bus substitution for the Adirondack between Albany and Montreal, July 9-10.

Additionally track work will result in a bus substitution between Boston and Albany for the Lake Shore Limited. This affects passengers passing through there July 21-24, and August 4-7.

Two Long Island Rail Road commuter trains collided June 22 at Jamaica Station in Queens. There were 770 people on board, with 67 minor injuries. Both trains were headed for Penn Station.

Dallas Area Rapid Transit opens its next light-rail extension July 1. The Red Line will be extended 12.5 miles from Park Lane in Dallas, north to Galatyn Park in Richardson.

Railtrack, Britain's privatized rail infrastructure company, has been removed from the rail business. A sale of its rail assets (for $762 million) was concluded this week, and control of Britain's rail infrastructure is now in the hands of Network Rail, a new, public-sector firm. The government is providing another $6.1 billion in the form of a contingency fund for Network Rail. Where the private-sector Railtrack distributed profits to shareholders, profits on Network Rail, if any, will go back into the infrastructure. The Network Rail company will be controlled by train operators, rail unions, and passenger groups. Management goals will be tied to performance targets (like safety and delay avoidance), rather than profits. The government has offered Railtrack shareholders $3.73-3.88 a share (where shares closed at $3.41 on June 27); the deal has to be approved by shareholders at a meeting in July.