WASHINGTON, D.C. — The Bush administration has proposed lending Amtrak up to $170 million to keep the national passenger railroad running through September, Transportation Department officials said on July 12.
A wire service reports that the loan would be the second stage of a bailout plan approved two weeks ago by the White House. The bailout averted a threatened shutdown this month of all Amtrak trains and several heavily traveled commuter services in the Northeast and 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 Thursday from Transportation Secretary Norman Y. Mineta to congressional leaders, would involve another direct federal loan of up to $170 million.
House and Senate negotiators had included a $205 million appropriation for Amtrak — the amount of money it said it needed to keep trains running through Sept. 30 — in an emergency spending bill for homeland security and other government programs. But that bill is stalled in Congress by a veto threat from the administration, and the White House Office of Management and Budget yesterday rejected the notion of a direct grant.
“A direct loan is really the way to go here,” Transportation Department spokesman Len Alcivar said. “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.”
Amtrak’s banks have denied it access to its credit line because of its horrendous finances and an incomplete audit report for 2001. Amtrak has never made money in its 31-year history and lost $1.2 billion last year.
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 to Amtrak because that would add to its debt, which is now almost $4 billion.
“Congress should provide the funding needed to maintain passenger rail service,” said Sen. Patty Murray (D-Wash.), chairwoman of the transportation subcommittee of the Senate Appropriations Committee. “And that is the deal that the House and Senate had agreed to, until the White House stepped in to scuttle the deal.”
The proposed loan would have to be paid back no later than Jan. 1, and Amtrak would have to adhere to conditions that require the railroad to cut costs and get better control of its finances. The loan agreement also would require management reforms and bookkeeping changes. The administration had pledged not to push for larger-scale reforms it wants, such as contracting out of some routes and jobs, as part of the short-term financing.