Administration officials say Amtrak needs major overhaul

Bush administration officials Tuesday called for a sweeping overhaul of the money-losing Amtrak passenger rail system to cure what an official says is a deteriorating operation.

"Amtrak's core business design suffers from structural rot," said Deputy Transportation Secretary Michael Jackson. "For decades, the federal government has embraced perverse incentives that consistently impel Amtrak to make irrational business decisions."

Jackson and Transportation Department Inspector General Kenneth Mead outlined to the Senate Commerce Committee a six-year authorization plan to create multi-layered state and regional compacts and companies to run the passenger train operations with the help of federal capital grants.

The administration has proposed giving Amtrak $900 million in fiscal 2004, just half of the $1.8 billion Amtrak President David Gunn told the committee he wanted.

Gunn last Friday proposed a five-year, $8 billion plan to upgrade Amtrak's infrastructure, but Mead said a complete reform of the rail operation is needed.

"We do not propose to eliminate Amtrak," Mead said, "but we do propose comprehensive structural changes to be implemented at a prudent pace spanning the entire six-year period of the next authorization cycle. Amtrak would be required to form a pure operating company-one that does indeed make a profit by providing excellent service for its government customers."

Gunn backed his five-year capital improvement plan as a "practical, pragmatic, no-frills approach" that would keep existing rail services-an approach that angered Commerce Committee Chairman Johb McCain, R-Ariz., who has been trying to eliminate unprofitable lines, such as the Sunset Limited that runs between Los Angeles and Orlando that lost an estimated $347 per passenger in 2001.

"I cannot support an approach which further postpones reform and calls for operating the same trains over the same routes with millions more in operating losses and a continuing need for large infusions of capital from the taxpayers," McCain said.

Gunn testified that it was "a myth" to think Amtrak would ever be profitable and derided calls for reform. "The word reform is like catnip to those interested in a quick fix to Amtrak," he said. "If the answer were quick and easy, we would have solved the problem long ago." What is needed, he said, was a tightly managed company.

But Commerce Surface Transportation and Merchant Marine Subcommittee Chairwoman Kay Bailey Hutchison, R-Texas, supported a national rail system as a federal government responsibility. A similar view came from Sen. Frank Lautenberg, D-N.J.

The administration plan would include a federal-state compact over the Northeast corridor rail infrastructure that would eventually set up a company to run service between Washington and Boston. Elsewhere, state and regional operating companies would run trains and receive capital grants.