Bush, Mineta Say No Amtrak Shutdown

AP ^ | JUNE 24, 13:12 ET | LAURENCE ARNOLD

[Redcloak]

JUNE 24, 13:12 ET

Bush, Mineta Say No Amtrak Shutdown By LAURENCE ARNOLD
Associated Press Writer

AP/STEPHEN. J. CARRERA [21K]

WASHINGTON (AP) — With Amtrak on the brink of a nationwide shutdown, a senator said President Bush and Transportation Secretary Norman Y. Mineta assured him Monday they will keep the nation's passenger railroad operating.

Sen. Robert Torricelli, D-N.J., said Mineta ``gave me his word'' that the administration will find a way to resolve Amtrak's immediate financial crisis.

Torricelli discussed Amtrak with Bush and Mineta on Monday during a visit by the president to New Jersey.

AP/Mike Derer [23K]

He said Bush also ``made clear his insistence that there be some changes in Amtrak, some reform in structure and operation.''

Members of Amtrak's governing board were gathering in Washington Monday for an afternoon meeting with Mineta, who last week outlined several changes for the money-losing passenger railroad.

Amtrak's new president, David Gunn, says he is open to change but first must find $200 million to close a budget shortfall.

The Federal Railroad Administration, a part of the Transportation Department, is reviewing Amtrak's request for a loan guarantee for the needed $200 million. Amtrak has had trouble tapping its existing line of credit because lenders are unsure how long it can remain in business.

Amtrak may halt service
Windows Media
RealVideo

If the railroad administration were to rule that Amtrak does not qualify for a loan guarantee, the only options would be a congressional appropriation or an order by lawmakers that the agency grant one.

But time is running out: Gunn has said he would have to begin turning away passengers and directing trains to storage yards by the middle of this week.

A shutdown of Amtrak also could affect commuter railroads serving hundreds of thousands of people, mostly along the Atlantic Seaboard.

Torricelli and Sens. Charles Schumer of New York and Jon Corzine of New Jersey, all Democrats, said Sunday that inaction in the crisis would throw the New York metropolitan region into chaos.

Torricelli said Monday he is open to long-term reforms, but ``right now we don't have time to worry about the long term. We have to worry about people not getting to work on Thursday.''

House Speaker Dennis Hastert would not say on NBC's ``Meet the Press'' what Congress might do. But Hastert, R-Ill., gave Amtrak's managers a tongue-lashing for continuing to serve unprofitable routes and failing to correct other money-losing policies before turning to Congress when the cash runs low.

Amtrak's new president said he completely agreed.

``I want to change the way we do business,'' Gunn said in an interview. ``My goal is to turn (Amtrak) into a much more focused organization with tight fiscal controls.''

Hastert suggested that abandoning some Amtrak services might be worthwhile.

``I think there are some places that they could shut down,'' he said. ``I think that there are some selective routes that they may want to shut down. That's all a part of reform.''

He added: ``They haven't taken a look at that and done that. It's time that they do that.''

Gunn said that ending the most unprofitable routes ``will not solve the immediate problem.'' He said he agrees ``there should be standards set in terms of cost recovery. That's perfectly reasonable, that's fair, and it gets us out of the business of playing God with these routes.''

Hastert acknowledged the semiprivate passenger rail service has instituted programs that are saving money in some areas, ``but I think that there are some things that we can do to make Amtrak more effective and more efficient.''

———

[Redcloak]

A note to W: Shrug.

[borntodiefree]

Ah yes, that area of the constitution that authorized the federal government to keep a failing railroad institution running with tax payer dollars, and then raise the debt roof another 450 BILLION dollars...

Let's put this in another light. We are going to bail out this poorly run organization because we're to afraid of a real free market. Oh and by the way, we are going to add an additional debt to every taxpayer of $3,000.00. That's ok with you serfs isn't it..ok..good little serf.

And we thought slavery was dead....

[OldFriend]

Why is no one mentioning that the Chairman of the Board of AMTRAK is .............MICHAEL DUKAKIS......also known as Mike Dukaka!

[Redcloak]

The chairman is now former Meridian mayor John Robert Smith. (Not that "Tank Boy" didn't do his share to screw up an already bad situation!)

[OldFriend]

Heard on WABC radio this morning that Dukaka is the man at the top...........

[Redcloak]

Hoovers.com claims it's Smith. Since ~ February according to another site.

[thatsnotnice]

``My goal is to turn (Amtrak) into a much more focused organization with tight fiscal controls.''

I was under the impression that they had until this year to do just that. Is this not something they were instructed to do in 1997 or there about?

[DrDavid]

Amtrak's new president, David Gunn, says he is open to change but first must find $200 million to close a budget shortfall.

The Federal Railroad Administration, a part of the Transportation Department, is reviewing Amtrak's request for a loan guarantee for the needed $200 million. Amtrak has had trouble tapping its existing line of credit because lenders are unsure how long it can remain in business.

Since those of us who pay taxes are going to bail out Amtrack, will we discounts?

[robertpaulsen]

Right on the money:

The Amtrak Reform and Accountability Act of 1997 (Act), enacted December 2, 1997, P.L. 105-134, 111 Stat. 2570, authorizes appropriations to Amtrak through FY2002. The Act contains provisions designed to help Amtrak not require federal operating funds after the end of FY2002.

Looks like everyone "forgot" about this little document. Oh, and the price of postage will be going up, too.

[Redcloak]

Amtrak's new president, David Gunn, says he is open to change but first must find $200 million to close a budget shortfall.

Perhaps he could can a few Vps. I read in another thread that there are dozens of VPs in Amtrak. A few less little piggies on the teats couldn't help but improve their budget situation.

[WyldKard]

Hmmm..this is interesting to me, only in that I am a frequent user of Amtrak (although that was coming to an end for reasons other than Amtraks possible shutdown...)

First off, I don't know of ANY first-world transit/railroad system that is turning a profit, although I could be wrong. The bitch of it is that America probably has the worst of the "high speed train" networks to boot. Unfortunately, I don't see how the entire concept of rail based travel is very conducive to competition...don't all competative parties have to build their own rail networks, etc etc?

I was recently in Japan, and had the pleasure of riding the Shinkansen a few times, from Tokyo to Kyoto and back again. Quick as lightning, steady as a rock, comfortable as all get out, and accurate enough to set your watch by. It's obvious why these people are the worlds second biggest economy (if you can get around the massive political corruption, joke of a banking system, and crushing national debt ;-)

In the end, Amtrak definately needs to shuck off a few unprofitable rail components. There will always be a need for serious rail in the Northeastern Corridor, and all the way into Atlanta. Right now, it's overpriced (overpriced, even when susidized!!!), noisy, ill-built...I just cant say enough bad things about them, sadly :(

[mn12]

Interesting timing. I'm in the middle of reading Atlas Shrugged, and then Amtrak's financial instability shows up in the news.

If the government was really interested in Amtrak being efficient and financially viable, they'd auction the whole mess off to the highest bidder and let the private industry deal with it. Just imagine how much a ticket would cost if Uncle Sam ran the airlines!

[Redcloak]

Interesting timing. I'm in the middle of reading Atlas Shrugged, and then Amtrak's financial instability shows up in the news.

I was reading Atlas Shrugged during the CA power crisis last year.

[CedarDave]

If the government was really interested in Amtrak being efficient and financially viable, they'd auction the whole mess off to the highest bidder and let the private industry deal with it. Just imagine how much a ticket would cost if Uncle Sam ran the airlines!

Problem is, the private freight railroads recoil in horror at the thought of having to try to negoiate with individual franchises for the right to travel on freight tracks and will oppose such open access tooth and nail. They'd much rather deal with one entity than even two or three.

And no part of Amtrak is profitable. In the NE, the farebox comes close to breaking even, but the capital costs to modernize or just keep the aging, 1920's infrastucture running are staggering. In the rest of the country, the farebox is pretty much empty, but the infrastructure is paid for by the freight railroads (with some help from the government when upgrades for passenger service are needed; these are generally not opposed by the freights because it improves their operation also).

So franchising won't work. What can help, however, is somehow curtailing or getting rid of excessive/expensive union labor. As things stand now, if Amtrak shuts down, union employees get a sizable portion of their salary (maybe the whole package) for up to five years!!

Based on his past accomplishments, and if he gets the chance, the new Amtrak president will do what it takes to get losses down to the bare minimum, which will provide for a more efficient railroad.

p.s Uncle Sam doesn't run the airlines, but he pays for a good portion of them: $15 Billion after 9/11 with multiple billions asked for by individual airlines (US Air, United, America West, etc.), and many federal billions more for aiport infrastructure and the ATC system.