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Administration says Amtrak needs major overhaul

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  • 4/29 GovExec.com
    Published Tuesday, April 29, 2003, in the GovExec.com Administration officials say Amtrak needs major overhaul By Michael Posner CongressDaily Bush
    Message 1 of 1 , May 1, 2003
      Published Tuesday, April 29, 2003, in the GovExec.com

      Administration officials say Amtrak needs major overhaul

      By Michael Posner

      Bush administration officials Tuesday called for a sweeping overhaul
      of the money-losing Amtrak passenger rail system to cure what an
      official says is a deteriorating operation.

      "Amtrak's core business design suffers from structural rot," said
      Deputy Transportation Secretary Michael Jackson. "For decades, the
      federal government has embraced perverse incentives that
      consistently impel Amtrak to make irrational business decisions."

      Jackson and Transportation Department Inspector General Kenneth Mead
      outlined to the Senate Commerce Committee a six-year authorization
      plan to create multi-layered state and regional compacts and
      companies to run the passenger train operations with the help of
      federal capital grants.

      The administration has proposed giving Amtrak $900 million in fiscal
      2004, just half of the $1.8 billion Amtrak President David Gunn told
      the committee he wanted.

      Gunn last Friday proposed a five-year, $8 billion plan to upgrade
      Amtrak's infrastructure, but Mead said a complete reform of the rail
      operation is needed.

      "We do not propose to eliminate Amtrak," Mead said, "but we do
      propose comprehensive structural changes to be implemented at a
      prudent pace spanning the entire six-year period of the next
      authorization cycle. Amtrak would be required to form a pure
      operating company—one that does indeed make a profit by providing
      excellent service for its government customers."

      Gunn backed his five-year capital improvement plan as a "practical,
      pragmatic, no-frills approach" that would keep existing rail
      services—an approach that angered Commerce Committee Chairman Johb
      McCain, R-Ariz., who has been trying to eliminate unprofitable
      lines, such as the Sunset Limited that runs between Los Angeles and
      Orlando that lost an estimated $347 per passenger in 2001.

      "I cannot support an approach which further postpones reform and
      calls for operating the same trains over the same routes with
      millions more in operating losses and a continuing need for large
      infusions of capital from the taxpayers," McCain said.

      Gunn testified that it was "a myth" to think Amtrak would ever be
      profitable and derided calls for reform. "The word reform is like
      catnip to those interested in a quick fix to Amtrak," he said. "If
      the answer were quick and easy, we would have solved the problem
      long ago." What is needed, he said, was a tightly managed company.

      But Commerce Surface Transportation and Merchant Marine Subcommittee
      Chairwoman Kay Bailey Hutchison, R-Texas, supported a national rail
      system as a federal government responsibility. A similar view came
      from Sen. Frank Lautenberg, D-N.J.

      The administration plan would include a federal-state compact over
      the Northeast corridor rail infrastructure that would eventually set
      up a company to run service between Washington and Boston.
      Elsewhere, state and regional operating companies would run trains
      and receive capital grants.
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