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Amtrak's Future Remains Uncertain

Railroad: Secretary of Transportation, after meeting with company officials, says he believes a system shutdown will be averted.

June 25, 2002|From Associated Press

WASHINGTON -- Transportation Secretary Norman Y. Mineta expressed confidence Monday that the nation's passenger rail system will not be shut down this week, but he offered no immediate solution to Amtrak's financial problems.

During a break in an emergency meeting of Amtrak's board of directors, Mineta said a solution will require a cut in Amtrak's expenses and federal financial help.

"I am confident that we will be able to avoid a shutdown of services," Mineta said. "We have much more work to do but we will continue to work on an effective solution."

Mineta said the administration and Amtrak will work with Congress to make sure passenger rail service continues. He said the administration should not bear the responsibility alone for Amtrak's problems.

"This must be a team effort," he said. "The burden is not on the administration to save the rail system from bankruptcy, nor should it be."

Mineta's announcement leaves Amtrak still facing the possibility of the first systemwide shutdown in its three-decade history.

Earlier Monday, Sen. Robert Torricelli (D-N.J.) said Mineta "gave me his word" that the administration would find a way to resolve Amtrak's immediate financial crisis.

Torricelli discussed Amtrak with President Bush and Mineta during the president's visit to New Jersey. Bush stressed the importance of reform at Amtrak, said White House spokeswoman Claire Buchan. The president wants an Amtrak "driven by sound economics," she said.

White House officials could not immediately say whether Bush had pledged to keep the railroad running.

Torricelli said Bush also "made clear his insistence that there be some changes in Amtrak, some reform in structure and operation."

Members of Amtrak's governing board were gathering in Washington for a Monday afternoon meeting with Mineta, who last week outlined several changes for the money-losing passenger railroad.

Amtrak President David L. Gunn says he is open to change but first must find $200 million to close a budget shortfall.

The Federal Railroad Administration, a part of the Transportation Department, is reviewing Amtrak's request for a loan guarantee for the needed $200 million. Amtrak has had trouble tapping its existing line of credit because lenders are unsure how long it can remain in business.

If the railroad administration ruled that Amtrak does not qualify for a loan guarantee, the only options would be an order by lawmakers that the agency grant one or a congressional appropriation.

But time is running out: Gunn has said he would have to begin turning away passengers and directing trains to storage yards by the middle of this week.

An Amtrak shutdown also could affect commuter railroads serving hundreds of thousands of people, mostly along the Atlantic seaboard.

Torricelli and Sens. Charles E. Schumer of New York and Jon Corzine of New Jersey, both also Democrats, said Sunday that inaction in the crisis would throw the New York metropolitan region into chaos.

Torricelli said Monday that he is open to long-term reforms, but "right now we don't have time to worry about the long term. We have to worry about people not getting to work on Thursday."

House Speaker J. Dennis Hastert would not say on NBC's "Meet the Press" what Congress might do. But Hastert (R-Ill.) gave Amtrak's managers a tongue-lashing for continuing to serve unprofitable routes and failing to correct other money-losing policies before turning to Congress when the cash runs low.

Hastert suggested scaling back Amtrak service.

"I think that there are some selective routes that they may want to shut down," Hastert said. "That's all a part of reform."

Amtrak's president agreed.

"I want to change the way we do business," Gunn said in an interview.

"My goal is to turn [Amtrak] into a much more focused organization with tight fiscal controls."

Gunn said that ending the most unprofitable routes "will not solve the immediate problem."

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