WASHINGTON, D.C. — Amtrak and the Bush administration reached a final agreement on a financial package to keep the national passenger train system running through September, after the administration toned down controversial provisions involving organized labor and cuts in operating expenses, the Washington Post reported on June 28.
The railroad gets an immediate $100 million federal loan that it must repay on Nov. 22 from its fiscal 2003 appropriation. Amtrak and the administration agreed to ask Congress in July for up to $170 million in additional short-term aid as a grant, loan or loan guarantee.
The agreement ends the possibility that Amtrak would begin an orderly shutdown during the July 4 weekend because it is running out of cash. An Amtrak shutdown also would have affected commuter railroads that use Amtrak facilities or crews.
Amtrak agreed to a dozen conditions as the price for receiving the loan. One is that it not spend any money planning or operating new routes — including those for high-speed trains — through Sept. 30, 2003. Most of the conditions involve stricter financial accounting and reporting.
Amtrak also agreed to bring in consultants to thoroughly assess the value of its property, and to suspend salary increases or bonuses during calendar 2002 for any manager making more than $75,000.
“This crisis proves clearly that without real reforms, Amtrak will lurch from one crisis to another,” said Transportation Secretary Norman Y. Mineta, who appeared at a news conference at Union Station with Amtrak board Chairman John Robert Smith, Amtrak President David L. Gunn and other officials.
The agreement does not address the administration’s proposals for long-term changes, including an end to federal operating subsidies and handing some routes and jobs off to private operators. The railroad has lost money throughout its 31-year history, including $1.2 billion last year.
Amtrak agreed to most of the conditions because they corresponded to changes Gunn has already put in motion. But Gunn declared that he could not accept an administration condition that would have required Amtrak not to enter into labor agreements that would prevent rail union jobs from being contracted out. Gunn also dug in against a requirement that Amtrak cut operating expenses by a specified amount in fiscal 2003.
The labor condition was the last to be settled in a day-long meeting yesterday. The contracting-out language was removed, and the condition now says, “Amtrak agrees that it will seek the cooperation of all of its employees in achieving the substantial cost reductions needed to meet Amtrak’s financial crisis.”
Amtrak agreed to formulate a list of ways to cut operating expenses by $100 million in fiscal 2003. But the administration agreed to add language saying Amtrak could then spend that money on “critical maintenance needs throughout the system.”
The administration pledged not to seek new conditions when Congress meets in July.
Deputy Transportation Secretary Michael P. Jackson, who handled most of the negotiations for the administration, said everyone with an interest in Amtrak must now work together on a long-term plan to achieve financial stability.
“We want to build consensus on getting to the finish line,” Jackson said.
Members of Congress said they were relieved that the crisis is over for now, but some have vowed to try to appropriate the full amount of money that Amtrak needs for the rest of the current fiscal year — removing the need to repay any loans from next year’s appropriation.
“When Congress returns next Monday [July 8], I intend to press for a direct appropriation for Amtrak’s urgent needs so that Amtrak does not find itself even deeper in debt come October,” said Sen. Patty Murray (D-Wash.), chairman of the transportation subcommittee of the Senate Appropriations Committee.
The negotiations on the final agreement grew heated at times, especially when Gunn grew stubborn over the administration’s conditions. But Gunn said the administration negotiated in a tough but honorable fashion.
“They wanted to push us, but they didn’t want to push us over,” Gunn said.
Smith said the crisis raised public awareness of Amtrak and “forever dispelled the question of Amtrak’s relevance to the nation’s infrastructure.”