June 30, 2005

House approves $1.17 billion for Amtrak

WASHINGTON (Reuters) - The House of Representatives defiedthe Bush administration on Wednesday by approving more than$1.17 billion for Amtrak next year, which could avert athreatened shutdown of the national rail system.

The surprise action in an amendment to a transportation andtreasury appropriations bill was a breakthrough incongressional wrangling over Amtrak funding. Lawmakers alsostripped from the bill a requirement that Amtrak end service onits most unprofitable long-distance routes.

"This sends a strong message that many in Congress believethat we need to maintain a national passenger rail system,"Amtrak said in a statement.

The 34-year-old rail network boasts record ridership buthas never made money and is nearly $4 billion in debt. Itrelies on massive government subsidies to survive.

Amtrak sought nearly $2 billion in aid for next year,emphasizing that its subsidy request was driven by the cost ofupgrading the flagship Northeast Corridor between Boston andWashington. Amtrak received just over $1.2 billion this year.

The Senate has yet to take up the funding question for thefiscal year beginning Oct. 1, and a disappointed Bushadministration said House lawmakers had retreated from thedifficult work of reforming Amtrak.

"Adoption of this type of amendment enables and encouragesthe wasteful spending and inefficient operations that have cometo define Amtrak," Transportation Secretary Norman Mineta saidin a statement.

"Handing over more than a billion dollars with no reformsattached only gives Amtrak a blank check to continuemisspending taxpayer money," he said.

Lawmakers approved by a voice vote a plan to add $626million to a proposed appropriation of $550 million forpassenger rail. "That ($550 million) was a bankruptcy number,"said Rep. Steven LaTourette, an Ohio Republican and chairman ofthe House railroads subcommittee.

LaTourette proposed the Amtrak funding change, whichsubtracted money from other areas to avoid driving up the costof the larger appropriations bill. For instance, the House billwould cut programs in the transportation secretary's office by20 percent, but Mineta has the authority to fund those budgetsfrom other accounts.

It would also eliminate the Air TransportationStabilization Board, established in 2001 to oversee loanguarantees to troubled airlines, and the Federal RailroadAdministration's research and development program.

The Bush administration proposed no new subsidy for Amtrakbeyond what it would cost to run commuter operations if thenational rail corporation went bankrupt.

The White House and Transportation Department demandedAmtrak cut costs sharply and radically change the way it doesbusiness. Amtrak supporters claim the administration is tryingto bankrupt the rail system to reduce government spending in anera of record budget deficits.

Amtrak's board has agreed to some Bush administrationdemands for the long term, including greater oversight by thestates and the potential for a competitively bid route system.