- The Washington Times - Tuesday, June 25, 2002

The Bush administration pledged yesterday to save Amtrak from a shutdown that could occur as soon as this week, but offered no solutions to the railroad's financial problems.
"I am confident that we will be able to avoid a shutdown of services," Transportation Secretary Norman Y. Mineta said during a break in an emergency meeting of the Amtrak board of directors.
Amtrak officials have said that unless they obtain $200 million in federal loans or grants, they will have to cease operations nationwide. Banks have refused to lend Amtrak the money unless the federal government guarantees payment.
Amtrak trains carry about 60,000 riders per day. About 35,000 of those ride in the Boston-Washington Northeast corridor.
Yesterday, credit-rating service Standard & Poor's again lowered Amtrak's credit rating to triple B minus from triple B, saying, "Amtrak's liquidity position has weakened significantly recently."
Mr. Mineta reiterated the Bush administration's position that any Amtrak bailout must be tied to long-term restructuring to avoid similar financial collapses in the future.
"The administration believes any solution must include steps toward reform," Mr. Mineta said.
He called on Amtrak's new president, David Gunn, to continue to cut expenses. He also said the federal government would try to "identify the best mix of options available to stabilize Amtrak's short-term finances."
The Amtrak board of directors continued meeting last night to determine how to avoid a shutdown.
Mr. Gunn has said a phased shutdown of Amtrak could begin as soon as tomorrow. A bankruptcy filing is scheduled for Thursday unless the federal government provides a bailout.
Last night in a statement, Mr. Gunn said, "There has been no reconciliation of the simple fact that Amtrak is running out of cash and no agreement on how to provide a loan guarantee or appropriation that will continue train service to the end of the fiscal year."
An Amtrak shutdown would be the first in its 31-year history, although the national passenger railroad has consumed $25 billion in federal grants. It is running on a $521 million subsidy this year.
It has never earned a profit and lost $1.1 billion last year.
The Bush administration favors a restructuring that would turn over more control to the states to operate high-speed rail corridors between major cities. Private franchisers could bid on the routes.
White House spokeswoman Claire Buchan said President Bush stressed the importance of reform at Amtrak. She said the president wants an Amtrak "driven by sound economics." However, Mr. Bush has not suggested any solutions to the emergency.
Sen. Robert G. Torricelli, New Jersey Democrat, said yesterday that Mr. Mineta "gave me his word" that the Bush administration would not let Amtrak be shut down.
He discussed Amtrak's plight with Mr. Bush and Mr. Mineta during the president's visit to New Jersey yesterday. He said Mr. Bush also "made clear his insistence that there be some changes in Amtrak, some reform in structure and operation."
A shutdown would seriously interfere with thousands of daily commuters to Washington. Maryland Rail Commuter and Virginia Railway Express commuter-rail services share Amtrak track.
"It certainly would be an inconvenience for our customers," said Jack Cahalan, spokesman for the Maryland Department of Transportation. "They're looking at limited options."
About 7,500 daily commuters ride MARC trains along Amtrak tracks between Baltimore and Washington, Mr. Cahalan said. As a result, MARC was considering alternatives yesterday, such as commuter buses or shorter rail trips to outlying stations of the Washington Metropolitan Area Transit Authority system.
VRE officials have not considered alternatives because they are hoping the federal government will work out a solution. About 12,000 daily commuters use VRE.
"It would be bad for VRE if they shut down immediately," said George Conner, Virginia's assistant director for rail.
Several senators urged the Bush administration to act quickly to grant Amtrak a loan guarantee and avoid a shutdown.
"If the administration continues to sit passively by, passenger rail will come to a screeching halt later this week, hundreds of thousands of commuters will be scrambling for alternative transportation and our already congested highways will be overloaded," Sen. Joseph R. Biden Jr., Delaware Democrat, said in a statement. Mr. Biden commutes from Delaware on Amtrak daily.
House Speaker J. Dennis Hastert, Illinois Republican, blamed Amtrak's management during an interview on NBC's "Meet the Press" for continuing unprofitable routes and other money-losing policies, then asking Congress for more money.
"I think there are some selective routes that they may want to shut down," Mr. Hastert said. "That's all a part of reform."
This story is based in part on wire-service reports.



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