WASHINGTON, D.C. — Having sealed a deal to solve Amtrak’s immediate budget crisis, the Bush administration and leaders of the national passenger railroad now must tackle differences over long-term reforms, a wire service reported.
Amtrak Chairman John Robert Smith and Transportation Secretary Norman Y. Mineta announced an agreement Friday night to help Amtrak get the $200 million it needs to keep trains running through September.
The deal helps Amtrak avert the first systemwide shutdown in its 31- year history, which had been threatened to begin next week.
But the broad differences between the railroad and the administration were evident even as the two sides were jointly praising the deal.
Smith said Congress, the administration and Amtrak now must ” craft a bold new vision for passenger rail that will serve all of the regions of this country.”
Mineta called the agreement ” an initial, very modest downpayment” toward implementing the administration’ s ideas for changing the way Amtrak does business.
He has proposed ending federal operating subsidies to intercity passenger rail, a step that could threaten the survival of money-losing trains serving many states. He would also give states more responsibility to pay for train service.
The debate will play out over the next few months as Congress writes a federal budget for the fiscal year that begins Oct. 1.
Amtrak insists it needs at least $1.2 billion to run through September 2003. The administration is sticking by its initial proposal of $521 million, saying the railroad must undergo significant reforms before seeking more.
Smith called $521 million ” a non-starter.”
Whatever Amtrak receives, it will have to use $100 million to pay back the administration for a loan that is part of the short-term rescue package sealed Friday.
In addition to that loan, the administration will join with Amtrak in asking Congress to provide at least $100 million to fill the remainder of the railroad’ s budget shortfall.
Still to be resolved is the form of the congressional assistance. Amtrak would prefer an appropriation, since it would not have to pay that back, but it also could be a loan. Amtrak is already carrying heavy debt, estimated at $3.85 billion in March.
Sen. Patty Murray, D-Wash., who chairs the Senate Appropriations subcommittee on transportation, called the agreement ” a classic case of good news, bad news. … The bad news is that service will continue for only three months, at which time Amtrak will be deeper in debt and facing another bankruptcy crisis.”
The final negotiations hinged on what conditions the administration would place on its $100 million loan. Amtrak agreed to 12, many involving improved financial accountability.
“A lot of this is stuff that should be done, ” said Amtrak President David Gunn.
The conditions require Amtrak to spend its money over the next 15 months only on existing assets and services, not to plan for expansion of service. Amtrak must identify $100 million in potential budget cuts by the end of August.
Also, Amtrak must freeze all management salaries and suspend any annual bonuses for this year for employees with salaries over $75, 000.
“Our goal was to ensure uninterrupted service for the over 750, 000 Americans who rely on Amtrak and our nation’ s commuter rail service every day, and we have accomplished that goal, ” Mineta said at a news conference announcing the deal.
Gunn had warned that Amtrak could begin shutting down its entire nationwide system as early as next weekend if it did not get government help to close a $200 million budget gap.
Amtrak was formed in 1971 to relieve freight railroads from the cash-draining responsibility of passenger service and has struggled ever since to meet expectations that it break even or turn a profit.
The railroad serves more than 500 communities in 46 states over a 22, 000-mile route system. About 65, 000 people ride Amtrak trains each day, roughly half in Amtrak’ s busy Boston-New York-Washington corridor.
Hundreds of thousands of others ride commuter rail services that use Amtrak-owned tracks and tunnels or are operated by Amtrak under contract.