(The following article by Gwyneth K. Shaw was posted on the Baltimore Sun website on May 13.)
WASHINGTON — Amtrak executives predicted yesterday that the railroad could go bankrupt within months, forcing serious service cuts and other drastic measures, unless it receives a significant budget boost from Congress.
“I think we will probably limp into next year, but by ‘limp’ I mean we’ll have like $20 million in the bank,” David L. Gunn, Amtrak’s president and chief executive officer, said. “At this point, we do not have a lot of options left to conserve cash.”
At a hearing before the Senate appropriations subcommittee that oversees the railroad’s budget, Gunn and David M. Laney, the chairman of the railroad’s board, said they need $1.82 billion in fiscal year 2006 to hang on — an increase of more than 50 percent over this year’s $1.2 billion budget.
Kenneth M. Mead, the inspector general for the Department of Transportation, supported their dire warning. He said Amtrak needs $1.4 or 1.5 billion in the next year just to stay alive.
“As time goes by, the limp-along system of today comes closer to a major failure,” he said. “Amtrak is, quite literally, coming to the end of its rope.”
But lawmakers offered little hope that the beleaguered rail service would get such a cash infusion.
Senators said they’re sympathetic to the railroad’s plight. But in a difficult budget year, they said, it will be nearly impossible to give Amtrak everything it says it needs.
“Our subcommittee finds itself in the posture of having to cut and cannibalize other programs — as we have never done before — only to see if we can scrape together enough funding from other programs to extend Amtrak for another 12 months,” said Sen. Patty Murray of Washington, the top Democrat on the panel. “Finding even $1.2 billion will be extraordinarily difficult. Finding $1.4 or $1.5 billion will be a monumental and painful challenge.”
The railroad was on budget until March, Gunn said. But Amtrak’s always precarious situation has been worsened by the discovery of problems with the brakes on its high-speed Acela trains, which prompted all 20 to be taken out of service last month. That’s costing Amtrak $1 million per week, further depleting the railroad’s dwindling cash reserves.
Several senators harshly criticized the Bush administration’s decision to eliminate funding for Amtrak in its budget request — an attempt to prod Congress toward sweeping railroad reforms. The White House, they complained, has given no indication how much money it would support for Amtrak if Congress goes along with an administration plan to shift much of the financial burden to states served by the railroad.
A bankrupt Amtrak doesn’t solve anything, said Sen. Christopher S. Bond, the Missouri Republican who heads the panel. “I think it’s irresponsible to propose bankrupting Amtrak without having any significant plans for reforming it,” Bond said. “We can’t keep Amtrak on inadequate life support without a light at the end of the tunnel. At this point, the light appears to be an oncoming freight train.”
Sen. Robert C. Byrd, a diehard supporter of Amtrak, said the administration’s plan would eliminate many long-distance routes, many of which run through rural areas that don’t have access to airplanes or even bus service. The White House proposal, he said, is “a recipe for a dead railroad.”
But Jeffrey A. Rosen, the transportation department’s general counsel and the administration’s representative at the hearing, said flatly that the reforms must come before any discussion of how the federal government will fund railroads in the future. That prompted Sen. Robert F. Bennett of Utah — who said he supports changing the way Amtrak works — to offer Rosen a bit of advice.
“Having used the stick, I think a little bit clearer carrot might be a good idea,” Bennett said.
Gunn and Mead also questioned whether parts of the administration’s plan are even workable. For example, the White House wants Amtrak to turn over its popular Northeast Corridor routes to a partnership between the federal government and the states, something the railroad’s board is resisting.
When Murray asked what she said is a crucial question — whether changing Amtrak will save money in the short term — Mead said a long history of putting off critical improvements cannot be erased overnight.
“You’re going to need some money to put this system in a reasonable state of good repair and efficiency,” he said. “In my opinion, it’s a myth to think you’re going to save your way out of this.”
But, as Murray noted, “Amtrak’s detractors smell blood.”
When the new fiscal year begins Oct. 1, Gunn said, Amtrak could be in bankruptcy in a number of weeks, if it lasts that long. How that might affect Amtrak’s passengers — it served a record 25 million people last year — is unclear, he said, because saving money would require cutting a lot of trains.