Arizona Rail Passenger Association

Arizona Senator McCain had this to say: “I realize that my pessimistic view of Amtrak’s future, based on its track record, is not shared by the majority of the Congress. That is why I have worked with my colleagues to bring some semblance of legitimacy to this operation. The bill before us does not go as far as many of us would like. For some of my colleagues on the other side of the aisle, they may say it goes too far. Regardless of the position held, the bill does provide for some comprehensive changes.

“According to a November 5, 1997, letter from Tom Downs, ‘enactment of the Amtrak Accountability and Reform Act of 1997 would be the single-most significant action the Congress can take to aid Amtrak in achieving operating self-sufficiency by 2002.’ He goes on to say, ‘The legislative reforms contained in the bill will allow Amtrak to operate in a more businesslike, cost-effective manner, thus allowing greater productivity and increased savings.’

“I want to remind my colleagues that even if Congress approves the statutory reforms and the $2.3 billion for capital improvements is released, Amtrak’s viability remains uncertain… I strongly support passage of this reform measure. However, I will continue to hold strong reservations over Amtrak’s ability to ever turn Amtrak into a profitable, subsidy-free operation. One of the most important elements of this bill is that it provides the opportunity for us to shut off the spigot if and when it is clear the promise of financial viability will not or cannot be achieved.

“And I commit now that if this reform and reauthorization plan does not make Amtrak financially viable, I will do everything in my power as a Senator and as chairman of the Commerce, Science, and Transportation Committee to see that it comes to an end.

“I wish Amtrak every success with the passage of this legislation by the House. I will hope and pray that Amtrak succeeds. But I must tell you I am not optimistic that they will succeed and I hope to God that this is the last trip to the taxpayers’ pocket book that we make on behalf of Amtrak.”

Representative Jim Kolbe wrote the following to ARPA member Anthony Haswell:

“The proposed legislation authorizes $3.37 billion over fiscal years 1998-2000… · The current Board of Directors would be replaced by a new reform board. The new board would have the authority to recommend to Congress a plan to reform Amtrak and may also consider the recommendations of the 1997 Working Group on Intercity Rail regarding the transfer of Amtrak’s infrastructure assets and responsibilities to a new, separately governed corporation. · Amtrak’s non-voting common stock (now held by freight railroads) and voting preferred stock (held by the federal D.O.T.) would be redeemed. This action allows the new reform board a fresh start in capital structure and stock offerings, including a possible Employee Stock Ownership Plan…

“Once this reform package is enacted, an additional $2.3 billion [the "tax refund"] will be made available to Amtrak to help reduce its debt and make much needed capital investments. Without these reforms, however, I will not lift a finger to save Amtrak.

“…With a capital deficit of over $4 billion and saddled with the fact that now one Amtrak route runs a profit, this rail service has become a very costly venture. We can no longer afford to throw good money after bad.”

Stating that “This bipartisan reform bill removes Amtrak from its crippling statutory straitjacket and allows the company a chance to operate on a more business-like basis,” Congressman Bud Shuster (R-PA), Chairman of the House Transportation and Infrastructure Committee today applauded House passage of legislation to fundamentally reform and reauthorize Amtrak.

“Passage of this bill demonstrates our resolve to fundamentally reform Amtrak and give it a chance to survive. This is solid legislation that is the product of all the parties — labor, management, and Members — sitting down and hammering out a fair and reasonable compromise. Moreover, this bill is the first top-to-bottom reform of Amtrak since 1971. It eliminates the statutory straitjacket that has handicapped Amtrak at every turn and will allow the railroad to run on a more business-like basis. And, the bill explicitly provides that the Amtrak labor protection reforms have no affect on freight railroad or transit workers.

“The bill also comes at a crucial turning point for Amtrak… Amtrak is in precarious financial shape and headed down a steep path towards bankruptcy. This deteriorating state of affairs has been verified by no less than Amtrak’s President, Tom Downs, by the General Accounting Office, and by the bipartisan advisory group constituted by the Committee, the Working Group on Inter-City Rail. Every one of these parties has confirmed that without major structural reform, Amtrak is four to six months from bankruptcy.

“The amendment is straightforward in its aims:

• “It takes the Senate compromise on labor protection, contracting out, and liability with no change. This includes provisions that repeal the statutory guarantee that Amtrak provide up to six years of labor protection to any employee who is laid off due to a route elimination or frequency reduction below three times a week. This issue would be sent to collective bargaining, under a 180-day accelerated bargaining process.
• “Also repealed would be the current ban on contracting out work [other than food and beverage service] if it would result in the layoff of a single employee. This issue would be sent to collective bargaining, but would not be negotiable until the next round of contract negotiations, unless the parties mutually agreed to take it up before then.
• “The bill provides for a global cap of $200 million on tort liability for death or injury to a passenger, or damage to property of a passenger. It also includes a requirement that Amtrak maintain insurance of at least $200 million.
• “It repeals the requirement that Amtrak operate the basic system of routes inherited from private railroads in 1971. This means that unprofitable routes can be shed and profitable routes can be opened. [It also appears to lift the Amtrak monopoly clause which prevented other operators from offering intercity passenger rail. — Ed.]

“…Amtrak’s current condition is due in part to chronic federal interference by statute. Congress has specified almost every aspect of Amtrak’s finances: where it should operate, when it is allowed to reduce or eliminate service, who its directors are, what kind of stock it may issue, restrictions on its borrowing and capital formation, what benefits it must pay employees, when it can contract with private-sector railroads and businesses, who must audit its books, which law governs all of its contracts, and even who can get reduced-fare transportation on Amtrak trains.

“…Finally, this bill represents a victory for Amtrak and for the future of intercity passenger rail,” concluded Shuster.