- The Washington Times - Friday, June 28, 2002

Members of Congress said yesterday the Bush administration's new agreement with Amtrak merely delays the latest financial crisis but does not resolve fundamental policy problems.

The tentative agreement reached Wednesday night would give Amtrak a $100 million federal loan and require Congress to provide another $170 million in supplemental funds or loan guarantees through the fiscal year that ends Sept. 30.

A final form of the agreement is being negotiated.

Amtrak officials refused to disclose the remaining disputed issues.

During an afternoon news conference, Amtrak President David Gunn said disagreements with the Transportation Department about "terms and conditions" have blocked a final funding agreement. He refused to give greater detail, saying it could interfere with negotiations.

"No action will be necessary by the Congress this week to keep the trains running," Transportation Secretary Norman Y. Mineta said at a joint hearing of Senate Commerce and Appropriations subcommittees yesterday. "We will seek your help after the Fourth of July recess."

The senators said the Bush administration waited too long and is offering only a stop-gap solution.

"All we get out of the Department of Transportation are crisis appearances," Sen. Ernest F. Hollings, a South Carolina Democrat, told Mr. Mineta. "We have had no leadership whatsoever from your department on Amtrak."

Sen. Patty Murray, Washington Democrat, said the emergency funding fails to resolve the fact that the Bush administration proposes spending less than half the money Amtrak officials say is necessary to keep the railroad operating for another year.

President Bush's budget allocates $521 million for Amtrak in the next fiscal year, the same amount as this year. Amtrak officials said they need at least $1.2 billion just to maintain daily operations for a year, which does not include major infrastructure improvements that have been put off because of inadequate funding.

As of March, Amtrak's debt stood at $3.85 billion and was still growing. It has never experienced a profitable year in its 31-year history.

Mrs. Murray said the Bush administration would face another cash crisis for Amtrak in September without a bigger allocation.

Sen. John McCain, Arizona Republican and chairman of the Senate Commerce, Science and Transportation Committee, reiterated his position that Amtrak's funding problems will end only when the railroad's nationwide network is restructured to focus rail traffic on more profitable high-speed corridors.

"I hope we can make these reforms even if it means shutting down a line in some senator's state," Mr. McCain said.

Other members of Congress were willing to cooperate with the Bush administration but also recommended a long-term solution.

Rep. James L. Oberstar, Minnesota Democrat, introduced a bill with 20 other members of Congress yesterday that would give Amtrak the other $170 million in federal loan guarantees that Mr. Mineta said the railroad needs for the rest of the fiscal year.

However, Mr. Oberstar said: "Until we decide to commit the necessary resources to intercity rail-passenger service, including high-speed rail operations, and recognize the costs of building and operating such services, we will forever be lurching from crisis to crisis."

The Bush administration wants to break up Amtrak into regional routes overseen by states and operated as private franchises. Most Democrats and a few Republicans prefer a national network of rail routes, even if it means larger federal subsidies.

Amtrak has been trying to borrow money from banks to keep operating this year but found lenders reluctant to provide the money while the railroad was in such desperate financial condition. The only way banks would agree to lend the money is if the federal government provided guarantees to repay the debt if Amtrak defaults.

Before the tentative agreement with the Transportation Department Wednesday, Mr. Gunn said Amtrak would run out of the cash it needs to keep operating on July 4 or 5.

Sen. Barbara A. Mikulski, Maryland Democrat, said yesterday afternoon she was disappointed the Bush administration was offering only a short-term solution for Amtrak's recurring financial problems.

"What they're offering here is a Band-Aid," she said.


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