Lehrer interviews Amtrak
president David Gunn, who took over the troubled rail service over
a month ago.
NewsHour report on the financial
troubles of Amtrak.
Trains Might Stop
Whether you take
a plane, car, or train this summer, the U.S. government is spending
billions of dollars to make your trip safer and easier.
But Amtrak is having its worst money problems ever and its new president has threatened to shut down all trains in July if $200 million in emergency funding does not arrive soon.
Trains are a large part of American culture. Many people see the slow pace of a train as the best form of travel because you can see parts of America you can't see from the air or the highways.
And now that might change if a solution isn't found to Amtrak's troubles. So how did the nation's railroad end up in such trouble and what might happen to it?
Almost out of money
Amtrak in 1971 to manage all railroad services for passengers in the
U.S. It has grown into a large enterprise that employs 24,000 people
and runs 265 trains every day.
Although it receives millions from the government and from ticket sales, Amtrak's costs are more than the money it brings in. Some services, like its cross-country trains, tend to lose more money than they make.
The company tried to cut costs in recent years but last year, the company lost $1.1 billion, bringing Amtrak's debt total to almost four billion dollars.
To keep the company from going bankrupt and stopping service, the government provides Amtrak with money, called subsidies, each year.
Back in 1997, some members of Congress believed Amtrak could eventually operate without receiving any money, and passed the Amtrak Reform and Accountability Act giving the company five years to prove it could run without financial help from the government.
However, new Amtrak president David Gunn says it looks unlikely the company will be able to survive the summer without more money, let alone stand on its own by December 2002. So now Congress and Gunn need to come to some kind of agreement.
Since Amtrak does not provide train service in every state, some think it would be better to just let Amtrak go bankrupt and break it up into smaller, easier-to-manage companies.
However, there is fear that breaking up Amtrak could cause a repeat of Britain's rail problems. In the mid-1990s, England let more than a dozen private companies run their national train system and the switch caused numerous problems including broken trains, service delays, and accidents.
Others agree with David Gunn, who told the NewsHour with Jim Lehrer that government has a role to provide a national transportation system allowing citizens to get from place to place.
The Secretary of Transportation, Norman Mineta, told the U.S. Chamber of Commerce yesterday that states should pay more for Amtrak service and that some routes should be sold to other train companies. Most Democrats and Republicans in Congress had a negative response to the plan.
The question for Amtrak is how much help should the government provide. That question is what Congress has to settle before the new federal government budget is announced this fall.
-- By Samara Aberman, NewsHour Extra
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