WASHINGTON, D.C. — Negotiations on a final agreement to prevent an Amtrak shutdown snagged yesterday, at least temporarily, over Bush administration conditions that the national passenger railroad set a cost-cutting goal for next year and not enter into agreements that would prevent work now done by unionized rail workers from being contracted out, the Washington Post reported.
Administration officials and Amtrak President David Gunn expressed confidence that the issues can be worked out. A high-level administration official called the dispute a temporary dust-up and said he still expects the final agreement to be finished today.
Gunn told a news conference that most issues had been worked out except for two items that he said Amtrak could not accept. He declined to say what those items were, although he said he was “reasonably hopeful” that the two sides could reach an agreement on them. Amtrak has said it is so cash starved that it must begin an orderly shutdown by July 4 or 5 if it does not get more funds.
Sources said the issues are the contracting provision and a request that Amtrak set a target for cost savings in the next fiscal year.
The administration has proposed contracting out routes and jobs as part of long-term reforms at Amtrak, which has lost money throughout its 31-year history.
Edward Wytkind, executive director of the AFL-CIO Transportation Trades Department, expressed concern that the administration would even attempt to mention the volatile contracting issue in a short-term agreement.
“This is an 11th-hour attempt to get involved in the collective-bargaining process, which is very disturbing to us,” Wytkind said.
A Bush administration official said, however, that the two provisions were in the tentative agreement that the Amtrak board of directors signed Wednesday. The contracting provision would do nothing more than preserve authority that Amtrak already has, the official said.
Transportation Secretary Norman Y. Mineta and Amtrak Board Chairman John Robert Smith had announced a tentative agreement Wednesday night to have the Transportation Department lend the railroad roughly $100 million, the maximum amount the administration thinks is allowed by law.The Transportation Department and Mineta then would ask Congress for a loan or direct grant of another $100 million to $170 million, which would carry Amtrak through the end of the fiscal year.
In return, Amtrak would agree to conditions that include improving the “transparency” of its financial reporting and banning salary raises and bonuses for executives through Sept. 30. All of those conditions were already being observed, Amtrak officials said, and no one at Amtrak had any hope of getting raises or bonuses anyway.
Deputy Transportation Secretary Michael Jackson, handling much of the negotiations for the administration, said Amtrak, like airlines and other companies that come to the federal government for help, must be prepared to accept certain conditions.
Amtrak officials “must understand that if they want the federal government to help, they must make sacrifices and prove they can operate efficiently and run the railroad with financial discipline,” Jackson said.
Whatever the final agreement, Amtrak’s week-long odyssey on the edge of bankruptcy produced fallout on Capitol Hill and at commuter railroads that were threatened with shutdown because they use Amtrak facilities or crews.
Officials of at least two commuter authorities — in Boston and Virginia — strongly indicated that they would consider not renewing their operating contracts with Amtrak when they expire.
Pete Sklannik Jr., chief operating officer of Virginia Railway Express, said he has so little faith that Amtrak will be able to avoid another crisis that he is moving ahead with contingency plans to maintain operations if one occurs. He also said he will reconsider Amtrak as an operator when VRE’s contract is up in February 2003.
“This whole thing has changed our approach” to the contract, he said. The next VRE operator must demonstrate its solvency before being considered, he said.
Congressional Democrats sharply criticized the administration for taking a piecemeal approach to Amtrak’s survival. Sens. Ernest F. Hollings (D-S.C.) and Patty Murray (D-Wash.) repeatedly lambasted Mineta about Amtrak yesterday during a hearing on another subject.
Sen. Barbara A. Mikulski (D-Md.), who appeared at a news conference with Gunn, openly wondered whether the administration wants to see Amtrak go bankrupt.
“I fear the administration will seek reform through a bankruptcy proceeding,” she said.