STATEMENT OF EDWARD WYTKIND, EXECUTIVE DIRECTOR TRANSPORTATION TRADES DEPARTMENT, AFL-CIO
BEFORE THE HOUSE TRANSPORTATION AND INFRASTRUCTURE SUBCOMMITTEE ON RAILROADS HEARING ON “AMTRAK STATUS: SUCCESSES AND FAILURES OF AMTRAK AND THE AMTRAK REFORM AND ACCOUNTABILITY ACT OF 1997”
March 6, 2002
Mr. Chairman and members of the Subcommittee, my name is Edward Wytkind. I am the Executive Director of the Transportation Trades Department, AFL-CIO (TTD), which consists of 34 affiliated unions across the entire transportation industry, including the 12 rail unions that make up our Rail Labor Division.1 We appreciate this opportunity to appear before you and to bring to this Committee the perspective of the nation’s transportation workers.
Mr. Chairman, Amtrak is an integral part of our transportation network. It was created 31 years ago by the Rail Passenger Service Act with a simple goal in mind: to establish a modern, efficient intercity passenger railroad that can provide a truly national network of passenger transportation. The National Railroad Passenger Corporation (Amtrak) was charged with operating and revitalizing intercity passenger rail service and integrating such service into our national transportation system when it became clear in the late 1960s that freight carriers were unable to sustain the severe financial losses associated with operating passenger rail service. This inspired Congress to create Amtrak, thereby ensuring a national passenger rail system.
Let me stress that Amtrak was created to provide national passenger rail service, a mandate that was reaffirmed in the Amtrak Reform and Accountability Act of 1997 (ARAA). Transportation labor continues to believe that our nation is best served by a national network of passenger rail and we maintain that Amtrak is the only carrier that can realistically provide that service.
As it struggles to manage its business due to years of inadequate federal resources, Amtrak still has a good story to tell. Since 1997 ridership is up 19 percent and revenues have increased 38 percent and more and more states and commuter agencies are partnering with Amtrak and its employees to deliver rail service. And as our nation was gripped by the horror of the September 11 attacks, the hours and days that followed the assault on our country demonstrated Amtrak’s indispensable role in our transportation system as it stepped in to deliver the transportation needs of thousands of Americans who were stranded by the total grounding of all air operations. Moreover, as Congress was debating how much to spend on airline and other homeland security needs, Amtrak was forced to enhance its own security capabilities, eventually receiving $5 million in federal security funding – barely a fraction of what its security needs are. If we learned anything about the business of transportation from the horrors of September 11, it is this: the nation’s transportation system must be highly diversified and adaptable, especially during times of national emergency.
Transportation labor believes that Amtrak need not be profitable to be successful. In fact, the very notion that a national passenger railroad can earn a profit is pure folly as no such operation exists anywhere worldwide. Moreover, every other sector of our transportation system receives some form of federal subsidy and, fortunately, none is held to the unrealistic standard of achieving self-sufficiency or profitability. As such, we must not impose such a requirement on Amtrak, which to this day is being strangled by anemic funding levels that conflict with the important and longstanding policy mandate that governs Amtrak as a national passenger rail carrier.
As this Committee knows, we support a balanced federal transportation investment policy that provides federal assistance to all modes of transportation. Transportation unions have worked with a bipartisan Congress – especially the members of this Committee – to push for investment in mass transit, highway, Amtrak, aviation, port and maritime programs. Our member unions have been out front, year after year, working with you to make the case for expanded investments in the nation’s transportation needs. We are working with this Committee to address the almost $9 billion shortfall in the President’s FY 2003 budget for highway spending and, in a similar vein, to correct the woefully inadequate funding provided in the Bush budget for Amtrak.
The landmark Transportation Equity Act for the 21st Century (TEA-21) and the Aviation Investment and Reform Act for the 21st Century (AIR-21) made significant down payments in meeting America’s highway, transit and aviation needs. They established important benchmarks that transportation investments are critical to not only moving people and goods efficiently throughout our nation, but also to our national economy and defense. At the same time, these record investments have served as a reminder that Amtrak is not receiving realistic financing levels that match the nation’s expectations for Amtrak as a truly national passenger railroad. No other segment of America’s transportation system is forced to meet its capital and operating needs without substantial government financial assistance. Congress must put an end to this double standard that has left Amtrak with significant debt load that is strangling the company; millions in deferred capital and maintenance; a $5.8 billion capital backlog built up over 30 years of under-investment; and, unmet security needs in the wake of September 11.
These needs demand Congress’ immediate attention. The first step in turning around Amtrak’s finances is to heed the call of transportation labor as well as many in Congress who are urging action to eliminate the mandate for Amtrak to operate subsidy-free as required under the ARAA.2 Operational self-sufficiency is the wrong answer for Amtrak. Since its inception, Amtrak has fulfilled an important passenger service need as a vital part of the nation’s multi-modal national transportation network. Amtrak continues to carry out a specific congressional mandate to serve America’s passenger rail needs but must do so with a grossly inadequate budget. We strongly urge Congress to take the first step to shoring up Amtrak’s finances by repealing the statutory requirement of self-sufficiency that has placed Amtrak in a financial deathgrip that threatens the survival of its long-distance network.
The Amtrak Reform Council (ARC) and the DOT Inspector General have come to similar conclusions that self-sufficiency is unworkable. No other national passenger rail system in the world operates subsidy-free. Meanwhile, Great Britain’s attempt to move toward privatization of its transportation systems has been an utter failure. Recently, Great Britain’s privatized air traffic control system was shut down simply because an employee called in sick and reports indicate that the well publicized failures associated with this ill-advised privatization experiment will result in a massive government and bank bail-out. The experience with Britain’s privatized rail system has been equally disastrous as the people and businesses there struggle with tragic accidents, chronic delays, system failures and high fares.
Clearly, privatization is not the model we should follow in the United States. As TTD’s affiliates said in July 2000, “No privatization gimmick or breakup of [Amtrak] will solve our nation’s passenger rail needs; only dedicated employees, smart management and long term capital funding will make this enterprise a long term success.”3 Now, more than ever, privatization of our passenger rail system must be rejected. We cannot allow profits to take priority over the safety and security of those who rely on rail transportation. When the DOT Inspector General testified before the House Transportation Appropriation Subcommittee last week, he stated concerns about “commercialization and separating infrastructure and operating functions” as proposed in the ARC’s February 7, 2002 Report to Congress, “An infrastructure company that is focused on its bottom line may make decisions that are in its best interest financially, but which may affect the safety or efficiency of rail service operations.”
Transportation labor has made its position on the ARC and its recommendations clear. We have supported efforts in Congress to de-fund this body and to nullify the impact of its irresponsible actions. We believe its recommendations to be flawed and would note that the only two council members who ever worked for Amtrak, James Coston and Charles Moneypenny, both opposed the two main recommendations of the ARC report. Both made statements against taking control of the Northeast Corridor away from Amtrak, and both opposed privatization.4 We do, however, concur with the ARC’s conclusion that long term sources of funding are needed for both operating and capital needs of our passenger rail system.
We believe that Amtrak’s success depends largely on the commitment of our nation’s leaders to make the necessary choices to give Amtrak the resources it needs to be successful and to avoid the annual battles over its basic funding needs. We have the potential to build the world’s premier passenger rail system. It will take commitment and it will take resources. And Amtrak will be at the center of meeting that objective. Unfortunately, the President’s budget will not get us there. In fact, the President’s budget request for FY 2003 will not even allow Amtrak to operate at full capacity beyond the year. If funded at $521 million as proposed by the President, Amtrak has stated it will be forced to place the entire long-distance train network on the table for possible elimination.
Under this scenario, up to 7,000 Amtrak workers will lose their jobs and almost 8 million passengers face the loss of vital train service in communities nationwide including Buffalo in Chairman Quinn’s district. Transportation labor calls on Congress to fund Amtrak at no less than $1.2 billion for FY 2003 and to enact Amtrak reauthorization legislation that places the carrier on a steady and long-term course to financial stability.
Let me say that TTD’s member rail unions also believe that the development of high speed passenger rail corridors have immense potential to help Amtrak remain viable and competitive in the next century and to respond to the outcry for such service by many of the nation’s states, mayors and business leaders. The continued development of and investment in high speed rail infrastructure in this country is an important component of our national passenger rail system, but for rail workers to get behind these efforts they must know that these new investments will not come at the expense of Amtrak or longstanding employee protections. Any new proposals for high speed rail development must ensure the application of key railroad laws such as, for example, Railroad Retirement and the Railway Labor Act, as well as Davis Bacon prevailing wage requirements.
This year, Congress has the opportunity to make a bold statement about the importance of intercity passenger rail as part of our national transportation system. The reauthorization of Amtrak is pending and is essential to setting the stage for the future of passenger rail. Senate Commerce Committee Chairman Ernest Hollings (D-SC) has laid out a marker with the reauthorization bill he introduced yesterday. We will continue to review and offer our input on that legislation. Reauthorization legislation is the appropriate vehicle with which to address how best to sustain Amtrak and make it a truly efficient and economically sound national passenger rail system. While we do not pretend to have all the answers, transportation labor welcomes and plans to participate fully in this debate. More than anything, we will make the point that Amtrak suffers from chronic under-funding and any solution considered by Congress must reverse what has been too many years of wildly unrealistic transportation policy.
Let me say a few words about Amtrak’s dedicated employees. Members of this Committee, for much of the past three decades, Amtrak workers have made repeated sacrifices to help the railroad survive through some its darkest days including efforts in the past to eliminate or slash Amtrak’s funding. These workers have taken the brunt of Amtrak’s financial hardships by even accepting real wage concessions that today make them the lowest paid in the industry, earning on average 20 percent less than their counterparts at commuter rail operations. Already this year, in attempts to cut costs even further, Amtrak has laid-off 1,000 workers with more possible job cuts to follow. Despite the difficulties that Amtrak workers have faced over the five years since Amtrak legislation was last enacted, they are still on the job, committed to making the railroad a national success.
Clearly, the so-called “labor reforms” instituted in the 1997 legislation were unnecessary and hopefully the proponents of these provisions now understand that scape-goating workers will not make Amtrak a success. Even the ARC, which was created by the 1997 law, has said time and again that the employees are not the problem. In fact, it recommended that in any restructuring plan the employees and their contracts be carried over to new operators and covered by key railroad laws.5 Despite our significant differences with the ARC’s views, on this point we agree. In closing, Amtrak must be given a chance to excel. As our skies and roads attempt to absorb an increasingly mobile and demanding economy that depends on the efficient movement of goods and people, consumers and businesses are hungry for safe and reliable transportation choices. With a dedicated federal commitment to passenger rail – beginning in FY 2003 with no less than $1.2 billion – and a fundamental shift in policy as it relates to financing Amtrak’s long-term capital needs, Amtrak and its 25,000 workers are poised to deliver in this century first-class national passenger rail service that meets the expectations of Congress, cities and states, businesses and the traveling public.
Thank you for giving us the opportunity to express our views regarding the future of Amtrak.