(The Associated Press circulated the following story by Jim Abrams on July 11.)
WASHINGTON, D.C. — Amtrak took another jolt in its bumpy ride toward financial solvency Friday when a House panel decided to give it less than one-third of the money the passenger railway says it needs to operate next year.
The House Appropriations subcommittee responsible for the Transportation and Treasury departments approved an Amtrak budget of $580 million for the 2004 budget year starting Oct. 1. That compares to $900 million requested by the Bush administration and $1.8 billion that Amtrak says is necessary to maintain existing services.
While only an initial step in a budgetary process that won’t be finished for months, the subcommittee action signaled more trouble for the perennially money-losing Amtrak, which last summer narrowly averted its first nationwide shutdown.
“As a practical matter, this is a shutdown scenario,” Amtrak spokesman Cliff Black said of the $580 million amount. He said Amtrak spends $466 million annually just to maintain its existing capital equipment in the Northeast Corridor, and the passenger railroad could not function with the amount allotted by the subcommittee.
But subcommittee chairman Rep. Ernest Istook, R-Okla., said Amtrak “needs to show it can operate successfully on a smaller scale where it does have density and it does have demand.”
Amtrak, formed in 1971, services 500 communities in 46 states on its 22,000 miles of track. Congress, long critical of the railway’s dependence on government subsidies, in 1997 gave Amtrak give five years to wean itself from federal support, but the railway continues to rack up operating losses of about $1 billion a year.
Amtrak says it also requires about $2 billion annually from the government through at least 2008 as it addresses a backlog of capital repairs.
Rep. John Olver of Massachusetts, the top Democrat on the subcommittee, argued that there’s no major intercity rail system in the world that operates profitably without government support and that the subcommittee-backed budget, part of a $90 billion Transportation and Treasury spending package, “would strangle our national passenger rail system.”
Black said 219 House members had signed a letter supporting Amtrak’s $1.8 billion request.
But Rep. John Mica, R-Fla. a senior member of the House Transportation Committee that sets infrastructure policy, welcomed the low-end budget figure, saying he was campaigning “to get them the minimal amount of money until we get some commitment for reform.” The subcommittee action was “going to precipitate a serious look at reform,” he predicted.
Mica is drawing up legislation that he said would return Amtrak to its core mission – long-distance service. He would turn over commuter services in the Northeast Corridor, Amtrak’s biggest source of revenue, to a compact of Northeastern states. “The Northeast Corridor, if properly managed, not only has the potential for making money but could also dramatically change the travel patterns” in the region, he said.
Transportation Department Inspector General Kenneth Mead, in testimony to the House Budget Committee earlier this week, said that even a budget of $1 billion a year wouldn’t “solve the fundamental problem: the current Amtrak model is broken.”
“The status quo pleases no one,” Mead said. “It will require significant increases in funding just to maintain it, and it will not meet the mobility needs of this country in the years ahead.”