(The following article by Matthew L. Wald was posted on the New York Times website on November 25.)
WASHINGTON — Congress was fairly generous with Amtrak in the transportation budget it passed just before it went home for Thanksgiving, but the package has some unusual strings attached.
The measure, awaiting President Bush’s signature, is designed to keep Amtrak in the business of hauling freight cars, which it wants to quit, and the budget, as passed, could threaten Amtrak’s ability to serve meals to passengers. It would give the transportation secretary the power to raise the price Amtrak charges commuter railroads, like New Jersey Transit, for their use of the Northeast Corridor tracks, which Amtrak owns. And it seeks to limit Amtrak’s ability to discount tickets and reduce the airline-style pricing that the railroad has been using.
The $1.31 billion subsidy, approved on Nov. 18, is a sprawling bill that covers the Department of Transportation and unrelated departments like Treasury and Housing and Urban Development and the judiciary.
Although Congress rejected several administration proposals this year, Mr. Bush has yet to veto a bill. And the provisions that Congress actually included in the spending bill generated little public discussion.
The $1.31 billion, which an Amtrak spokesman called “adequate,” is an increase from the $1.1 billion appropriated for the fiscal year that ended on Sept. 30. The budget last year included an operating subsidy of about $570 million, but this new bill limits that subsidy to $495 million.
For its part, Amtrak’s board passed a budget calling for a deficit of $540 million, but did not specify how that would be dealt with. This leaves some question about how the railroad will operate even though it is getting more money for capital improvements. And part of the money is contingent on achieving savings through “operating efficiencies.”
The Amtrak spokesman, William Schulz, said Amtrak officials would not comment further. At the Transportation Department, Robert Johnson, a spokesman, would not comment because the president had not signed the bill. Mr. Johnson’s department wanted the Northeast Corridor tracks turned over to a federal-state consortium, and other operators allowed to compete with Amtrak with long-distance trains.
Though it was denied that, the Transportation Department did get one lever it had not publicly sought: the right to refigure Amtrak’s charges to commuter lines that use Amtrak rails. Those charges are determined under a formula that Congress, after negotiations with regional interests, created in the 1980’s. Representatives of Northeast states blocked changes in the formula in the 1990’s, but the new appropriation tells the transportation secretary to calculate the charges “based on the train mile usage of each commuter rail authority” or “by whatever measures the secretary believes to be most appropriate.”
It is not clear what this will cost the commuter carriers. The change will affect New Jersey Transit “adversely,” said Matthew Miller, a spokesman for Representative Robert Menendez, Democrat of New Jersey. New Jersey Transit did not respond to messages seeking comment left on Wednesday and Friday.
In another change, Congress is seeking to limit Amtrak’s use of a pricing technique pioneered by the airlines, in which prices vary in relation to demand. Amtrak, for example, was charging $120 for a ride from New York to Washington on its regular “regional” trains over the Thanksgiving period, but offering tickets on the same route for as low as $84 on weekends in January.
The new language would prohibit Amtrak from offering a discount of more than 50 percent “off the normal, peak fare.”
A Capitol Hill aide involved in rail issues, who spoke on the condition of anonymity because he was not authorized to speak about this legislation, said members of Congress had taken notice of an “egregious” promotional fare of $36 from Washington to Florida, round trip. “You couldn’t even get to the airport for that,” the aide said.
But Ross Capon, the executive director of the National Association of Railroad Passengers, said Congress was reacting to the idea that Amtrak was trying to buy market share by cutting its fares, thus losing more money. In fact, he said, Amtrak’s revenue per passenger mile was rising, even as the airlines’ was falling.
And like the airlines, Mr. Capon said, Amtrak wants to get something for every seat. “Transportation is a perishable commodity,” he said. “Every seat that goes empty because Amtrak was prohibited from doing innovative specials is less revenue for the company.”
Another element of the legislation provides $8.5 million that Amtrak did not seek, available if the railroad carries 5,500 carloads of “premium temperature-controlled express.” That is a reference to a service provided by a Detroit company, ExpressTrak, which has been shipping refrigerated produce on cars hauled at the back of Amtrak trains. Early in this decade Amtrak sought to raise its revenues by carrying mail and express freight but later said it was giving up the idea as unprofitable. But ExpressTrak is bankrupt, and a bankruptcy judge ordered Amtrak to keep hauling the cars.
The railroad hauled fewer than 1,500 cars in the last year, according to Mr. Capon’s group.
ExpressTrak did not return messages left on Wednesday and Friday.
The legislation also seeks to cut Amtrak’s losses on food and beverage service, where a recent Government Accountability Office study found that the railroad had $2 in expenses for each $1 in revenue. Amtrak is renegotiating its contract with its commissary supplier, which it acknowledges it has not managed well, but argues that passengers will not ride trains if food is not available.
Congress is demanding that Amtrak achieve “operational savings” on food and beverage service and other areas, or appropriations will be cut off. It assigned the inspector general of the Transportation Department to produce quarterly reports, beginning in January, that will be used to gauge that.