WASHINGTON, D.C. — Amtrak and the Bush administration agreed last night on a plan to prevent a shutdown of nationwide passenger rail service and many commuter operations that could have begun during the Independence Day weekend, though Congress will have to act after the holiday recess to make the deal complete, the Washington Post reports.
The deal involves immediate financial assistance from the administration, according to a joint statement issued by Transportation Secretary Norman Y. Mineta and Amtrak’s board chairman, John Robert Smith. The administration and Amtrak would then ask Congress to take further action later.
The statement contained few details, but sources said the Transportation Department would lend Amtrak $100 million — about half of what Amtrak said it needed to operate until the start of the next fiscal year, in October. The request to Congress would be to authorize an appropriation, another loan or a loan guarantee.
The administration and Amtrak also agreed on conditions, most of which are already being met by Amtrak President David L. Gunn or that Amtrak would find relatively easy to meet. The agreement, however, does not specifically address the long-term structural reforms that Mineta proposed last week, including an end to federal operating subsidies and contracting out some Amtrak routes and jobs.
Sen. Patty Murray (D-Wash.), chairman of the Senate Appropriations transportation subcommittee, said the agreement only postpones inevitable decisions about increased funding for Amtrak next year. “Proposing short-term loan guarantees simply kicks the can down the road and fails to face reality,” she said.
“I am hopeful that this policy reversal signals that the administration may be willing to acknowledge the true cost of rail service and will now further adjust its Amtrak request for next year,” Murray said, making it clear that she will push for a direct appropriation rather than a loan or loan guarantee after the Independence Day recess.
According to the Mineta-Smithstatement, the proposed agreement would:
— Improve Amtrak’s financial discipline and performance.
— Make Amtrak’s financial and operating performance transparent to the public.
— Provide federal policymakers with a better understanding of Amtrak’s long-term assets and liabilities, and its cost control and revenue options.
Sources said the final conditions involve monthly detailed financial reports, something Gunn has already said he would do.
Further cost-cutting options would be reviewed, and there would be a full inventory of Amtrak’s property and other assets and how they are mortgaged.
Amtrak has lost money throughout its 31-year history, including $1.2 billion last year. Congress required in 1997 that Amtrak become operationally self-sufficient within five years but it became clear last year that that was impossible.
Reacting to those warnings, Congress already was considering more than doubling Amtrak’s budgetary authorization for next year, and the administration was considering basic changes in Amtrak’s structure. But until recently, when Gunn warned that the railroad was in immediate danger of running out of cash, congressional leaders and the administration seemed to think the crisis could be put off for a year or two.
Earlier yesterday, Mineta told a Republican House group that in dealing with a short-term fix, “we ought not to be imposing a whole list of conditions that ought to be considered in the long term.” He said that most of the conditions being considered “are really dealing with transparency of the financial condition of Amtrak.”
Mineta and his lieutenants were trying to determine which assets Amtrak could mortgage, sources said. The Transportation Department has liens on all Amtrak property that is not already mortgaged, but Mineta has the power to release a lien on a specific piece of property so Amtrak could sell it or mortgage it.
Amtrak has not had a real estate valuation since 1976, he said, and the administration wants to know “how much in collateral assets do we have?”
Gunn had said Tuesday that Amtrak would run so low on cash by July 4 or 5 that he would have to begin a shutdown that would take about four days.