House whacks Amtrak construction funds

by Keith Laing, The Hill Newspaper
9/11/14

The House is proposing a 40 percent funding cut for Amtrak construction in a new passenger rail bill that was unveiled on Thursday by the chamber’s Transportation and Infrastructure Committee.

Amtrak has traditionally received about $1 billion per year from the federal government since its inception in 1971.

Most of the proposed reduction comes in funding for new rail construction projects, which would be reduced from approximately $1.3 billion per year under the last Amtrak appropriations measure to about $770 million.

The cut would be offset by a slight increase in spending for current train operations to appease Democrats, but Republican leaders on the panel said the end result would still be a funding reduction that would force Amtrak to streamline its operations.

“The reality is intercity passenger rail plays an important role in our national transportation network,” said Committee Chairman Bill Shuster (R-Pa.).

“Congress can either sit back while Amtrak and our passenger rail system continue to muddle along without reforms and without improvements, or we can take significant steps forward in improving Amtrak’s transparency and cost-effectiveness, and compelling it to operate like a true business should,” Shuster continued.

The measure requires Amtrak to divert about $470 million per year to a trust fund for improvements along its heavily-traveled northeast corridor, the most profitable in the company’s network. The measure will appropriate another $300 million per year for construction on Amtrak routes in the rest of country and provide about $982 million per year for nationwide operations.

The result is a reduction in Amtrak’s overall annual appropriation from about $1.9 billion to approximately $1.4 billion per year. The company’s 2008 appropriations bill provided about $606 million per year for its nationwide operating expenses, in addition to the $1.3 billion for construction.

Amtrak’s subsidies have been a source of contention for years in Congress. Republicans have pushed in the past to privatize the service on its popular routes in the Northeast.

Amtrak has countered criticism about its subsidies by pointing out that most of the money is used to maintain money-losing, long-distance routes in parts of the country that have little air service.

The company has touted record ridership in recent years as an argument in favor of increasing its federal appropriations to pay for needed improvements along the northeast corridor, the only tracks in the country that are owned and operated directly by Amtrak.

The company shares tracks with freight rail companies for most of its routes outside of the Northeast U.S.

Amtrak has said that it uses profits from its popular Northeast routes to help pay for trains in less-congested parts of the country. Republicans on the Transportation Committee, though, said the new funding measure would require the company to reinvest money that is generated by its Northeast service in the heavily traveled corridor.

The GOP said its rail bill would also eliminate losses Amtrak suffered on concession sales. The rail service has come under fire in recent years for allegedly losing millions of dollars on selling food and beverage to its passengers.

Democrats on the committee said they could support the proposed rail bill because it does not go as far as prior GOP attempts to completely eliminate the company’s federal appropriations.

“This bill provides much-needed investments in the long-distance network and ensures the continuation of all long-distance trains, including the Cardinal Route that runs through southern West Virginia,” said the top-ranking Democrat on the panel, Rep. Nick Rahall (W.Va.), in a statement.

“Reliable passenger rail service helps move our economy forward and is critical to communities across our nation,” Rahall continued.

Amtrak offered a measured response to the proposed legislation, arguing that its record ridership levels in recent years warranted increased federal support instead of a budget cut.

“Passenger rail has experienced impressive growth across the country in recent years and having a federal partner is key to continuing its success in the years ahead,” the company said in a statement provided to The Hill.

“We are reviewing the proposed legislation and look forward to working with Congress to enact a bill that addresses critical infrastructure investment needs, improves safety and security, enhances customer service and provides for greater financial efficiencies,” the Amtrak statement continued. “These improvements are needed to grow and sustain passenger rail and meet the expectations of our passengers and the 46 states and more than 500 communities served by Amtrak.”

Labor groups that represent Amtrak employees offered a similiar take on the House’s proposed rail funding bill.

“This bill provides a critical reauthorization of Amtrak for the next four years, improves rail infrastructure, and provides greater certainty to Amtrak and its employees as they implement long-term modernization plans,” AFL-CIO Transportation Trades Department President Ed Wytkind said in a statement. “Most importantly, the Shuster-Rahall bill rejects wrongheaded reform proposals to privatize Amtrak, break up the operation, and outsource good middle class jobs.”

Wytkind criticized Republicans for moving to cut Amtrak’s construction funding, however.

“We do caution that this bill does not provide Amtrak the level of funding it requires to deliver the service Americans need and deserve,” he said. “While other nations around the world – mostly notably China – are leading the way on passenger rail expansion and modernization, we must push back against those who believe that austerity budgets can somehow propel our economy forward. We should be using the rewrite of our passenger rail laws to set in a motion a long-term vision for expanded investment in Amtrak.”

The measure is a year-overdue reauthorization of the 2008 Passenger Rail Investment and Improvement Act.

The last congressional rail funding measure, which was scheduled to expire in 2013, was signed by former President George W. Bush.

www.thehill.com/policy/transportation/217411-house-rail-bill-cuts-amtrak-funding-40-percent

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