Answering Amtrak's S.O.S.
U.S. Transportation Secretary Norman Mineta is expressing confidence that Amtrak would continue operating without interruption despite a looming financial crisis at the national passenger railroad.
"I am confident we will be able to avoid a shutdown," Mineta told reporters Monday during a break in an Amtrak board meeting called to discuss possible sources of emergency funding. "This administration and Amtrak will work together with Congress to make sure that passenger rail service continues."
Amtrak President David Gunn and board Chairman John Robert Smith welcomed Mineta's pledge but said it does not prevent the first systemwide shutdown in the railroad's 31-year history, only delays it.
"There has been no reconciliation of the simple fact that Amtrak is running out of cash and (there is) no agreement on how to provide a loan guarantee or appropriation that will continue train service to the end of the fiscal year," the Amtrak officials said.
Gunn told Congress and the Bush administration last week that he would begin an orderly shutdown of rail service as early as Wednesday this week unless it can quickly obtain $200 million.
Mineta, an Amtrak director as the chief of U.S. transportation policy, offered no specific reason for his optimism but he reiterated the need for Amtrak to cut expenses and regain control of its finances.
Amtrak was created in 1971 as a for-profit corporation but has never made money. Since its inception 31 years ago, Amtrak has received more than $25 billion in federal funds for operations and capital expenditures. This year, the railroad is receiving $521 million from the federal government. It lost $1.1 billion last year.
Amtrak cannot obtain further loans from its banks because it has already leveraged most of its assets and is nearly $4 billion in debt.
At a separate news conference on Capitol Hill, one lawmaker said a smaller emergency amount of $120 million was being contemplated.
"I've heard that they might now give $120 million in loan guarantees," said Senator Charles Schumer, a New York Democrat.
The Bush administration is considering a federal loan guarantee to allow Amtrak to access that money from its banks, or a one-time aid package to cover its losses. Mineta has also told Congress to act quickly should an emergency appropriation be sought.
Delaware Democrat, Senator Joe Biden, told reporters the Senate would try to put money in a supplemental budget measure but time was very tight. "It's very tough. We don't know if we can."
A shutdown would disrupt travel not only for 60,000 daily Amtrak customers but also for hundreds of thousands of commuters in the Northeast, the Chicago area and in California.
Transportation Department officials have said a loan guarantee might not work legally because Amtrak wants the money for short-term needs, while the loan guarantee program is packaged for longer-term financing.
Senate Appropriations Committee Chairman Robert Byrd, a West Virginia Democrat, has crafted a $200 million package for Amtrak as part of homeland security funding legislation that House and Senate negotiators hope to finalize this week.
Byrd, the lead Senate negotiator on the bill, urged Mineta to support the Amtrak appropriation even though the White House has threatened to veto the Senate version of the homeland security bill, claiming it is too expensive.
But other congressional sources said that $55 million also included in the homeland bill for rail car upgrades could be siphoned off as a temporary fix for operating expenses, leaving negotiators to find another $145 million.
"Without Amtrak, the nation's transportation network would be thrown into disarray," Byrd said in a statement. "We cannot allow that to occur."
Amtrak has requested $1.2 billion in funding for fiscal year 2003, which begins Oct. 1, but the administration has only been willing to propose $521 million.