WASHINGTON — The Washington Post reports that the Bush administration today will unveil its long-awaited Amtrak plan, which would require states to pay an increasing share of passenger train costs, transfer the Boston-Washington Northeast Corridor to an unspecified “public partnership,” and contract out some jobs now held by rail union workers.
But Federal Railroad Administrator Alan Rutter is expected to tell a Senate subcommittee today that the administration is still considering what to do about a more immediate problem — the possibility that Amtrak will begin shutting down as early as next week because it is running out of cash.
The administration’s long-range plan, actually a set of principles with few specifics, was to be announced in a hastily arranged speech to the U.S. Chamber of Commerce this morning by Transportation Secretary Norman Y. Mineta, according to sources in the administration and Congress.
The ideas advanced by Mineta have fallen flat in Congress before, and are unlikely to be accepted now even though they inevitably will affect the debate on Amtrak’s future. But a senior administration official said the plan is intended to begin a long-term debate about how to provide essential rail passenger service while making fundamental changes in Amtrak’s business model.
Amtrak was formed on May 1, 1971, on the assumption that it would turn a profit after two years, but it has never been profitable. Instead, Congress has given Amtrak just enough money to struggle along year after year while ordering the corporation to operate trains that had no chance of covering their costs. Congress in 1997 ordered the corporation to become “operationally self-sufficient” by 2004, but it became clear last year that wasn’t possible.
Mineta had hoped to delay disclosure of the Amtrak plan until after the immediate crisis had passed, but his hand was forced by the insistence of Sen. Patty Murray (D-Wash.), chairman of the Senate Appropriations subcommittee on transportation, on holding a hearing on the Amtrak problem this afternoon.
Rutter even asked new Amtrak President David Gunn to suggest that Murray delay the hearing. But Gunn, who raised the possibility of a near-term shutdown just three weeks after taking the job, refused.
Mineta will suggest that Amtrak’s final form could be decided by a commission similar to the one that decided which military bases would be closed. He also said he would ask the National Governors Association to form a committee to work with Amtrak on partnerships with the states.
Gunn will offer testimony countering the administration’s basic assumption that the Amtrak business model cannot work.
“No amount of councils, commissions, study groups or symposiums will find a painless answer to what to do about Amtrak,” Gunn’s remarks say. “Recent proposals to privatize or restructure are exercises in problem avoidance. The federal government must decide what role rail should play just as it does with highways and air, even waterways.”
The Mineta speech will present five basic principles for change:
• Amtrak would be put on a sound economic system by eliminating federal operating subsidies for passenger trains and dropping services that do not cover their operating costs through either revenue or state subsidies. Although he mentioned few specifics, Mineta was signaling that some services should be abandoned unless states decide to subsidize their operation, administration sources said.
• Amtrak would be made a pure operating company rather than an owner of track.
• Some routes would be allowed to be operated under franchises by a non-Amtrak entity. In addition, other services, including reservations, food service and equipment maintenance, would be contracted out. A senior official said the administration would work with unions and freight railroads to solve any concerns. “This is not a declaration of war on the unions,” the official said.
• The federal government would continue to pay some capital costs of passenger train service but would provide no operating subsidies. States would be expected to cover those costs under new “partnerships.” New service, including new high-speed service, would be the responsibility of states or combinations of states.
• A partnership would be created to own the Boston-Washington “Northeast Corridor.” This would be a long-term transition, with states and the users of the corridor — commuter lines and freight railroads — having time to work out a solution. The Northeast Corridor is the only significant track owned by Amtrak, with most other trains operating over the tracks of freight railroads.
The Mineta speech says Amtrak’s problems will not be resolved within a year, and that he doubts there is time to pass a five-year Amtrak authorization this year. But he will say that even a one-year authorization must be accompanied by “significant reforms consistent with the principles I have outlined,” or the administration will oppose any authorization larger that its $521 million budget proposal.
Amtrak has requested $1.2 billion. Both Amtrak and Department of Transportation Inspector General Kenneth M. Mead have said $521 million would allow Amtrak to do little more than shut down.
Meanwhile, there is still the threat of a short-term shutdown. Gunn has said that unless Amtrak can get $200 million through a loan or or some other method by the end of the month, he will begin an orderly shutdown process in July.
The Mineta speech will make only passing mention of the crisis, and sources said Rutter will not make any specific recommendations. The Federal Railroad Administration is considering a request from Amtrak for a loan guarantee, sources said, but is having problems resolving unspecified legal problems.