MEDIA ADVISORY: Senate Appropriations DOT/Amtrak Hearing

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Thursday, March 16, 2006
For Immediate Release

Amtrak Chairman David Laney presented Amtrak’s Fiscal 2007 budget request which is $1.598 billion. He appeared this morning before the Senate Appropriations “Subcommittee on Transportation, Treasury, the Judiciary, Housing and Urban Development, and Related Agencies.” The subcommittee first heard testimony on transportation overall from Secretary of Transportation Norman Y. Mineta. This was followed by an Amtrak panel that included Laney, Acting President & CEO David Hughes, Federal Railroad Administrator Joseph Boardman, and Mark Dayton, a senior economist with the DOT Office of Inspector General. [The subcommittee plans a separate hearing on aviation next month.]

In addition, Amtrak’s grant request lists $275 million in “strategic investment options,” bringing the total implied request to $1.873 billion. Laney said, “For the first time since I’ve been on the board, we have the most constructive relationship with DOT and Federal Railroad Administration that we’ve ever had.” He said the board would receive proposals for reform at its April meeting, but that would not include First Class service. An obvious concern is whether “reform” of sleeping car service beyond what Amtrak has already plans to do with dining cars would mean anything other than eliminating the service and ultimately the trains. Secretary Mineta also was critical of sleeping cars.

Subcommittee Chairman Christopher Bond (R-MO) and Ranking Member Patty Murray (D-WA) both highlighted the big budget holes the subcommittee faces in the wide variety of programs it covers as a result of the Bush Administration’s budget. This included $400 million for Amtrak (just to get it back to this year’s $1.3 billion) and $1.557 billion for aviation. Bond referred to a “$2 billion rescission of Section 8 funds that I don’t think are available,” and said the Administration budget assumes many “fees and rescissions that Congress will not approved.” But Murray also acknowledged that DOT, with overall spending up almost 5%, fared better than many other departments.

Bond chastised Mineta on Amtrak, saying he had hoped to see a budget request supported by a realistic implementation plan. “That was an empty hope.” He said the Administration must be “prepared to implement a reform plan that is supported by the budget.” He noted that the current budget proposal is unrealistic, partly because it completely ignores Amtrak’s debt service payments—“The debt is there and must be paid even if we don’t like how it was incurred.”

Murray remarked that, “despite the fact that all members of the Amtrak Board were appointed by President Bush, their request is some $700 million more than the Administration requested. Apparently those Bush appointees know something about the national network and Amtrak’s costs that the ideologues don’t.” She also noted that rebuilding of the Northeast Corridor, while necessary, has consumed ”just about every dollar of increased appropriations we have provided in the last few years” to Amtrak. She further noted that ridership growth has been stronger outside the Northeast Corridor, citing these FY 2005 increases—Chicago-St. Louis 14%, Empire Builder 9%, St. Louis-Kansas City 7% and Cascades 4%.

Sen. Bennett (R-UT) again complained that the California Zephyr did not do enough business in Salt Lake City, and joked to Sen. Richard Durbin (D-IL), “I’ve been trying to give you Utah’s Amtrak subsidy for years.” Bennett said he thought “less than a dozen passengers a day debarked in Salt Lake City, maybe 120 a week.” Amtrak’s on-line state fact sheet suggests the number is 254 a week, but the central point—as we noted a year ago—is that Utah is uniquely served at bad hours of the day (Salt Lake City 3:30 AM eastbound, 11:45 PM westbound); other states along the route do much better.

Durbin said Amtrak was vital to Illinois, both Chicago and downstate. He asked, “Is the administration’s intent before you leave office to let Amtrak wither and die?”

Dayton attacked subsidies that go to Amtrak First Class passengers.

On the positive side, he said Amtrak “has made strides in reforming its food service provision and may have in place a process that will achieve break-even or marginally profitable provision of food service on its trains.”

Referring to all of Amtrak, his written statement said, “For the last four years, annual cash losses have exceeded $600 million, though their persistence at this level primarily is attributable to increased interest expense. Amtrak has made some progress in controlling its cash operating loss, excluding interest.” [As we have previously noted, Amtrak has taken no new debt on since June 2002, and total outstanding debt declined by $300 million from September 2002 to December 2005.]

He said the “Amtrak board and management seems committed to reform, but the heavy lifting has just begun.” He also said Amtrak needs $1.4 billion just to keep the existing system in tact, without any significant improvement in state of good repair, and with little margin for error—insolvency could result from any serious unanticipated problem. He suggested consideration of a separate working capital appropriation of $125 million, which should not be available to Amtrak for ordinary business activities.

But he said first class seeping car service is “still a problem. We find any subsidy for First Class service unacceptable and have yet to see even a pilot program for its elimination.” NARP sees this comment as a stalking horse for outright elimination of the national system, particularly when coupled with the IG’s recommendation that “power to determine [Amtrak] services [devolve] to the states.” States tend to focus on intra-state needs, which is why NARP and Amtrak consistently have said that the national network trains should be a federal responsibility.