NOVEMBER 12, 1997
For 28 years, Amtrak has continued to roll along, despite efforts by Congress to slash its budget.
KWAME HOLMAN: It might never arrive at a storybook ending, but every year for the last 28 Amtrak has proven to be the little engine that could. Despite annual efforts in Congress to slash its budget or shut it down completely, Amtrak continues to roll along, fueled by a federal appropriation that this year totals more than $800 million. Sen. John McCain of Arizona recalls 1982, when he first came to Congress and says it wasn't supposed to be like this.
SEN. JOHN McCAIN, Chairman, Commerce Committee: And I remember vividly. It was a three-year deal; they were going to be on easy street after three years. All they needed was an additional 30 or 40 million dollars. There was no problem. More and more people are riding trains, bla-bla-bla--you know. In the meantime we pumped $20 billion of the taxpayer's money into Amtrak, and it's worse off than it was 28 years ago.
KWAME HOLMAN: Amtrak was created by Congress in 1970 to rescue rail passenger service in the Northeast and Midwest from the near bankrupt Penn Central Railroad. Amtrak acquired other routes as well and was supposed to turn a profit almost immediately. It never has. Now Amtrak is nearly a billion dollars in debt and on the verge of bankruptcy, itself.
REP. BUD SHUSTER, Chairman, Transportation Committee: From the very beginning my objective has been to save Amtrak, although there are some in this body and the other body who would just as soon see it go into bankruptcy.
KWAME HOLMAN: Today, House Republican Bud Shuster, chairman of the Transportation & Infrastructure Committee, lined up support for a long-sought compromise bill that would rescue Amtrak from bankruptcy, at least temporarily. The main parts of the bill assure Amtrak will receive $3.4 billion in operating subsidies over the next three years plus an additional $2.3 billion for new equipment and much-needed improvements in infrastructure.
REP. ROBERT WISE, (D) West Virginia: Let's at least let Amtrak get to the banks in December with a newly passed reform legislation that guarantees it the access to capital; that permits it to get the line of credit.
KWAME HOLMAN: Among the hardest sells in the Senate has been John McCain, chairman of the Commerce Committee which overseas Amtrak's operations.
SEN. JOHN McCAIN, (R) Arizona: This has got to be called the great train robbery. It used to be in the Old West that the outlaws took money from the trains. Now the trains are taking money from the taxpayers--$2.3 billion. The James boys, Jesse and Frank, did not have the imagination that this--that this incredible scheme does. It's not to be believed.
KWAME HOLMAN: Amtrak's opponents here in Washington always have felt their arguments were convincing, but they've never quite succeeded, not even in 1985, when their opposition to Amtrak reached a peak.
PRESIDENT RONALD REAGAN: Every time a passenger boards an Amtrak train the American taxpayer pays about $35, but on the New York to Chicago train it's much higher. In fact, on that run it would cost the taxpayer less for the government to pass out free plane tickets.
SEN. BILL ARMSTRONG, (R) Colorado: Now, Amtrak runs right smack through my state. I mean, it comes right through Denver, and it's great. But the question is: Why should all the taxpayers of America subsidize at a cost on some of those long distance lines of five and six hundred dollars per passenger a bunch of people in Denver, Colorado, who want to have a scenic ride through the mountains? Now that doesn't make sense.
KWAME HOLMAN: But in 1985, Amtrak supporters prevailed once again on the strength of one argument in particular.
SEN. JOSEPH BIDEN, (D) Delaware: Mass transportation, as a whole, in the cities of Philadelphia and in Baltimore and in New York City and other areas along the route would be devastated.
SEN. MARK ANDREWS, (R) North Dakota: Have any of you sat at National Airport at 5:30 in the evening, trying to take off for some place. Think of what it's going to be if you put 17,000 more passengers in a national airport.
KWAME HOLMAN: Those Amtrak supporters were talking about 450 miles of rail between Boston and Washington, D.C., commonly referred to as the Northeast corridor, by far Amtrak's most profitable route. Back in 1985 members of Congress finally concluded any savings from shutting down Amtrak would be more than offset by the cost of lost productivity along the Northeast corridor from traffic jams on highways and at airports. And that same argument is being made again this year. Republican Mike Castle is the at-large representative from Delaware.
REP. MIKE CASTLE, (R) Delaware: In Wilmington, Delaware, right now we have clogs on I-95 coming into and coming out of Wilmington, perhaps as great a blockage as any place in the United States at our rush hours. And if you added the extra traffic you would lose because of the commuter transportation being given up, that would be a huge problem there.
KWAME HOLMAN: And just as in 1985, that argument wasn't lost on the Amtrak opponents of today.
SEN. JOHN McCAIN: There are some vital services that Amtrak provides right now. And if Amtrak were to go under, there's got to be some kind of orderly transition because there will be a demand for some of their services, especially in the Northeast corridor.
KWAME HOLMAN: But Sen. McCain adds if Amtrak ever does go bankrupt, it's unlikely Congress would be willing to rescue the rest of Amtrak's network of rail service, with the possible exception of the West Coast routes. Currently, Amtrak reaches into all but three mainland states, but it's providing service to an ever decreasing number of passengers.
SEN. JOHN McCAIN: Look, the reality is that in vast parts of the country Amtrak just passes through. They don't stop any more. And I understand why they don't stop any more, because ridership is way down. I mean, it's the same reason why people didn't ride stage coaches or ride the canal barges. I mean, it's a change in the way that Americans get from one way to another.
KWAME HOLMAN: In recent years Amtrak has eliminated 15 percent of its routes in an effort to save money, including the Denver to Portland and Salt Lake City to Los Angeles routes last spring. Amtrak also hopes adding 18 new high speed trains to the Northeast corridor next year will attract more passengers and turn more of a profit that could be used to benefit the rest of the system.
REP. MIKE CASTLE, (R) Delaware: I have no problems in the $2.3 billion to go into the capital improvements. It is needed. I really have no problems even increasing some of the operating expenses, so that's probably also needed. But I want to see it, pursuant to a plan that's really going to get the government out of the business of subsidizing Amtrak and make it self-sufficient and make it a much better service than it is today, and eliminate the areas that simply are financial losers.
KWAME HOLMAN: This evening the House appeared headed toward approving the Amtrak bailout bill, which besides the money also would force some changes in long-standing labor practices. One would lift the current prohibition on Amtrak's contracting out most of its work. Another would end the practice of giving six years of severance pay to some workers laid off because of route changes.
SEN. JOHN McCAIN: When you have a six year benefit if someone is laid off--and by the way the result of that is they just never laid anybody off.
KWAME HOLMAN: Those changes were enough to convince John McCain and his Senate colleagues to approve the Amtrak bailout bill last week by voice vote.
SPOKESMAN: All those in favor say aye.
SPOKESMAN: Ayes appear to have it. The ayes do have it. The bill is passed.
KWAME HOLMAN: But this evening in the House Transportation Chairman Bud Shuster was determined to add one more significant change to the bill. It would scrap Amtrak's current board of directors appointed by the President and replace it with one approved by congressional leaders.
REP. BUD SHUSTER, Chairman, Transportation Committee: It's no longer a question of whether we simply think our structure of the board is better than the structure of the board proposed by somebody else. It's beyond our control. The Justice Department says it's unconstitutional.