WASHINGTON, D.C. — The Bush administration has proposed a federal loan package of up to $170 million to keep Amtrak running through September, Transportation Department officials said on Friday.
A wire service reports that the loan plan is the second stage of a bailout approved two weeks ago by the White House that averted a threatened shutdown this month of all Amtrak trains and several heavily traveled commuter services in the Northeast and in California.
THE FIRST STAGE of that agreement was a $100 million loan that Amtrak received from the government a week ago to keep all its service intact into August.
The second stage, as proposed in a letter on Thursday from Transportation Secretary Norman Mineta to congressional leaders, would involve another direct federal loan of up to $170 million.
That debt would have to be paid back no later than Jan. 1 and Amtrak would have adhere to conditions that require the railroad to save money and get better control of its finances. They also require management reforms and bookkeeping changes.
Amtrak had requested $205 million from the government through a direct congressional appropriation — a cash grant — or loans to keep trains running through the current fiscal year which ends on Sept. 30.
The railroad’s banks denied it access to its line of credit because of Amtrak’s horrendous finances and an incomplete audit report for 2001. Amtrak has never made money in its 31-year history and lost $1.1 billion last year.
Earlier on Friday, the White House budget office rejected a $205 million appropriation that congressional negotiators from both houses included in an emergency spending bill for homeland security and other government programs. That bill is stalled in Congress under a veto threat from the White House.
“A direct loan is really the way to go here,” said Transportation Department spokesman Len Alcivar. “A direct loan is the more fiscally responsible of all options. An appropriation would be a continuation of the broken pattern of the last 30 years.”
The Bush administration believes that a loan offers the best way to hold Amtrak accountable to the business reforms it wants to see and ensure fiscal discipline.
The administration is seeking congressional approval of its most recent loan plan. But some lawmakers believe it would be a mistake to extend new credit because it would add to Amtrak’s debt, which is nearly $4 billion.
“Congress should provide the funding needed to maintain passenger rail service,” said Sen. Patty Murray, a Washington state Democrat who chairs the Senate appropriations transportation subcommittee. “And that is the deal that the House and Senate had agreed to, until the White House stepped in to scuttle the deal.”