[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
                   DEPARTMENT OF TRANSPORTATION AND

                    RELATED AGENCIES APPROPRIATIONS

                                FOR 2002

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS
                              FIRST SESSION
                                ________

 SUBCOMMITTEE ON THE DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES 
                             APPROPRIATIONS

                    HAROLD ROGERS, Kentucky, Chairman

 FRANK R. WOLF, Virginia         MARTIN OLAV SABO, Minnesota
 TOM DeLAY, Texas                JOHN W. OLVER, Massachusetts
 SONNY CALLAHAN, Alabama         ED PASTOR, Arizona
 TODD TIAHRT, Kansas             CAROLYN C. KILPATRICK, Michigan
 ROBERT B. ADERHOLT, Alabama     JOSE E. SERRANO, New York
 KAY GRANGER, Texas              JAMES E. CLYBURN, South Carolina
 JO ANN EMERSON, Missouri
 JOHN E. SWEENEY, New York          
                                    

 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
 Richard E. Efford, Stephanie K. Gupta, Cheryle R. Tucker, and Linda J. 
                        Muir, Subcommittee Staff
                                ________

                                 PART 5
                                                                   Page

   DEPARTMENT OF TRANSPORTATION:

     Federal Railroad Administration..............................  524
       Grants to Amtrak...........................................    1
     Research and Special Programs Administration.................  349

                              

                                ________

         Printed for the use of the Committee on Appropriations
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 77-252                     WASHINGTON : 2002



                         COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                   DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California              JOHN P. MURTHA, Pennsylvania
 HAROLD ROGERS, Kentucky              NORMAN D. DICKS, Washington
 JOE SKEEN, New Mexico                MARTIN OLAV SABO, Minnesota
 FRANK R. WOLF, Virginia              STENY H. HOYER, Maryland
 TOM DeLAY, Texas                     ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                   MARCY KAPTUR, Ohio
 SONNY CALLAHAN, Alabama              NANCY PELOSI, California
 JAMES T. WALSH, New York             PETER J. VISCLOSKY, Indiana
 CHARLES H. TAYLOR, North Carolina    NITA M. LOWEY, New York
 DAVID L. HOBSON, Ohio                JOSE E. SERRANO, New York
 ERNEST J. ISTOOK, Jr., Oklahoma      ROSA L. DeLAURO, Connecticut
 HENRY BONILLA, Texas                 JAMES P. MORAN, Virginia
 JOE KNOLLENBERG, Michigan            JOHN W. OLVER, Massachusetts
 DAN MILLER, Florida                  ED PASTOR, Arizona
 JACK KINGSTON, Georgia               CARRIE P. MEEK, Florida
 RODNEY P. FRELINGHUYSEN, New Jersey  DAVID E. PRICE, North Carolina
 ROGER F. WICKER, Mississippi         CHET EDWARDS, Texas
 GEORGE R. NETHERCUTT, Jr.,           ROBERT E. ``BUD'' CRAMER, Jr.,
Washington                             Alabama
 RANDY ``DUKE'' CUNNINGHAM,           PATRICK J. KENNEDY, Rhode Island
California                            JAMES E. CLYBURN, South Carolina
 TODD TIAHRT, Kansas                  MAURICE D. HINCHEY, New York
 ZACH WAMP, Tennessee                 LUCILLE ROYBAL-ALLARD, California
 TOM LATHAM, Iowa                     SAM FARR, California
 ANNE M. NORTHUP, Kentucky            JESSE L. JACKSON, Jr., Illinois
 ROBERT B. ADERHOLT, Alabama          CAROLYN C. KILPATRICK, Michigan
 JO ANN EMERSON, Missouri             ALLEN BOYD, Florida
 JOHN E. SUNUNU, New Hampshire        CHAKA FATTAH, Pennsylvania
 KAY GRANGER, Texas                   STEVEN R. ROTHMAN, New Jersey
 JOHN E. PETERSON, Pennsylvania
 JOHN T. DOOLITTLE, California
 RAY LaHOOD, Illinois
 JOHN E. SWEENEY, New York
 DAVID VITTER, Louisiana
 DON SHERWOOD, Pennsylvania
   
 VIRGIL H. GOODE, Jr., Virginia     
                                    
                 James W. Dyer, Clerk and Staff Director

                                  (ii)



 DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 
                                  2002

                              ----------                              

                                         Wednesday, March 21, 2001.

            NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK)

                               WITNESSES

KENNETH M. MEAD, INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION
PHYLLIS F. SCHEINBERG, DIRECTOR OF PHYSICAL INFRASTRUCTURE ISSUES, U.S. 
    GENERAL ACCOUNTING OFFICE
GEORGE D. WARRINGTON, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NATIONAL 
    RAILROAD PASSENGER CORPORATION (AMTRAK)

                            Opening Remarks

    Mr. Rogers. The Subcommittee will be in order. Welcome to 
our witnesses this morning. Good morning to you.
    In 1971, Amtrak's enacting legislation stated that the 
railroad would be the country's only intercity passenger 
railroad, and it would be profit making. In the 1980s and early 
1990s, the president of Amtrak repeatedly told Congress that 
Amtrak only needed a few more years of federal assistance 
before it could be profitable.
    However, that break even point was pushed into the future 
again and again. It is 30 years after Amtrak was created as a 
private corporation, and we are still subsidizing it with 
hundreds of millions of taxpayers' dollars. That is a long jump 
start.
    Shortly after Republicans took control of the House, the 
Congress in 1997 increased the pressure for Amtrak to improve 
its financial performance by putting it into the law that the 
railroad would have five years to become operationally self-
sufficient or there would be consequences. That date when 
Amtrak is required by law to be off the federal operating 
subsidy is December 2, 2002. That is just around the corner.
    With the budget we have before us now, Amtrak has just a 
little over one year to eliminate their operating budget 
shortfall. It is a big shortfall, and they have not made much 
progress over the past year in reducing it, so we need to find 
whether or not they are going to be able to redouble their 
efforts to intensify their cost savings to eliminate this 
shortfall in the short time they have left. It is a daunting 
challenge, and we expect them to meet it.
    Today, before this subcommittee sit three witnesses who are 
well versed in Amtrak's financial condition. However, each has 
a very different opinion about the railroad's health. For the 
past few years, the General Accounting Office of the government 
has been pessimistic about Amtrak's ability to reach 
operational self-sufficiency and its ability to relieve highway 
and airport congestion.
    In comparison, Amtrak has repeatedly testified that it will 
be able to meet the self-sufficiency goal mandated by the 
Amtrak Reform Act and has stated that it can be done so one 
year ahead of schedule.
    The Inspector General has been somewhere in the middle. 
However, last week, just last week, he testified that Amtrak's 
ability to reach operational self-sufficiency was in jeopardy 
because increased revenues have not kept ahead of growing 
expenses.
    There are two budget requests in front of this committee 
today that support Amtrak's mandate of reaching operational 
self-sufficiency. In mid February, Amtrak submitted its grant 
request to this subcommittee seeking $955 million in capital 
funding and asked that all these funds be available on October 
1, 2001.
    In comparison, the President's budget request is $521 
million and a 100 percent outlay rate. The President's budget 
is $434 million less than what Amtrak says it needs, yet the 
president of Amtrak has recently stated that it could live with 
that reduced amount and presumably reach operational self-
sufficiency.
    Well, today we want to focus on two simple issues. Can 
Amtrak achieve self-sufficiency on time and, if so, at what 
cost? We are pleased to welcome three witnesses to the hearing, 
Mr. Kenneth Mead, the Inspector General for the Department of 
Transportation; Ms. Phyllis Scheinberg, Director of Physical 
Infrastructure Issues at the General Accounting Office; and Mr. 
George Warrington, the president and chief executive officer of 
Amtrak.
    Before I recognize the first witness, let me recognize my 
co-worker, Mr. Sabo.
    Mr. Sabo. Thank you, Mr. Chairman. I welcome our witnesses 
and look forward to hearing from them.
    Mr. Rogers. Thank you.
    Mr. Mead, you can begin.
    Ms. Scheinberg, I hope you would follow Mr. Mead.
    Mr. Warrington, I would like your testimony then third. As 
part of your testimony, I hope that you will respond to any 
concerns or criticisms expressed by myself, the Inspector 
General or the General Accounting Office as we go through if 
that would be satisfactory.
    Mr. Warrington. Certainly, Mr. Chairman.

                   Inspector General Opening Remarks

    Mr. Rogers. Mr. Mead, you are recognized.
    Mr. Mead. Thank you, Mr. Chairman, Members of the 
subcommittee. I have some charts and some slides that should be 
in front of you. They are in color. I will be referring to 
those.
    Amtrak, Mr. Chairman, is in the fourth year of its five 
year glide path to operating self-sufficiency. December 2, 
2002, is the date on which operating self-sufficiency is to be 
attained, in our opinion. That is our reading of the 
legislative intent, and I think the best way to summarize our 
statement is to point to some vital signs which are depicted in 
these charts.


                       amtrak's financial results


    I would like to turn first to the chart that is entitled 
Amtrak's Operating and Cash Losses, 1990 to 2000, the blue and 
yellow graph lines. Amtrak's financial results have not yet 
turned the corner. Amtrak's $944 million loss in 2000 was more 
than its 1999 loss. In 2000, their cash loss, which is 
represented by the yellow line, and that is the true test of 
operating self-sufficiency, the yellow line, was $561 million. 
It is modestly better than last year, but still around $120 
million worse than Amtrak had planned.
    Now if you could turn to Slide 2, which is entitled 
Systemwide Passenger Revenue and Ridership Growth? Revenue and 
ridership are in fact up. Passenger revenues in 2000 approached 
a record $1.2 billion, which was ten percent better than in 
1999. Systemwide ridership also grew by about five percent, and 
in terms of people that is about 22.5 million people.
    You will see on the chart the blue line indicates the spike 
in ridership from the time that Amtrak's reauthorization 
measure was passed in 1997, and the red line similarly reflects 
the revenue. That line has also increased.
    If you turn to Slide 3, which is entitled Passenger and 
Non-Passenger Revenues, non-passenger revenues were about $880 
million in 2000, which was better than 1999. It is quite 
interesting. The railroad is a passenger railroad, but its non-
passenger revenues are now accounting for about 43 percent of 
its total revenue. Ten years ago that number was around 29 
percent.
    Amtrak has not been successful in curbing expense growth, 
and that is the real down side. That is the real challenge for 
Amtrak. In 2000, the cash operating expenses increased by 
around nine percent over 1999 from about $2.4 billion to $2.6 
billion, and they are increasing in 2001 as well. The bottom 
line is they are spending more than they take in by about $560 
million.
    If you could turn to Slide 4. Slide 4 is an illustration of 
one of the expense items that is greatly increasing for Amtrak. 
It is a chart that depicts the growth in interest expense, 
which, of course, reflects what you are paying on your debt, 
which in turn reflects an increasing debt load that is 
associated with Amtrak's financing of new equipment in recent 
years.
    In 1994, Amtrak's annual interest expenses were about $24 
million, $86 million in 2000, and it is headed up. By 2002, 
that figure is expected to be around $164 million a year. That 
is quite a bit, and you can see that for the several years 
after that it would probably be in the same neighborhood, so 
there is a big plus up in interest on debt.


                      operational self-sufficiency


    I would like to speak to Amtrak's mandate for self-
sufficiency. We think that Amtrak's ability to reach self-
sufficiency by 2003, and this is operating self-sufficiency, 
not self-sufficiency from capital is in serious jeopardy. They 
still have an opportunity to turn the corner.
    Last September we said that time was running short for 
Amtrak to close the holes in its business plan, and I think the 
Chairman is right in how he characterized our position. Last 
year I have to say I was more optimistic than I am at the 
present time. I think they are in serious jeopardy.
    I think the capital shortfall is in effect driving up 
operating expenses because when you cannot get new equipment 
and replace new equipment or replace catenary in the northeast 
corridor, you end up spending more money on maintenance and 
fixing things when they break. We said there were holes in 
Amtrak's business plan. Today, the gaps are fewer, but they are 
still significant, and Amtrak's time is almost up.
    That said, it is too early to say, Mr. Chairman, that 
Amtrak will not meet its deadline, but Amtrak will have to do 
three things to make it happen.
    First, they are going to have to fully implement high speed 
rail in the northeast corridor. You will recall that the Acela 
high speed trains were about a year late in becoming 
operational, but this year they have to ramp up. Just because 
there are one or two trains there now is not enough. They have 
about 20 train sets coming, and they have to ramp all those up 
this year in order to generate sufficient revenue.
    Second, they have to fully ramp up the mail and express 
business. Amtrak projects their revenues here to total about 
$402 million by 2003. They are now at $122 million, so we are 
talking phenomenal growth in that category.
    Third, they have to make significant strides in curbing 
expense growth. We found in our last report there are about 
$737 million in undefined management actions Amtrak was going 
to take. They have tried to fill some of those gaps, but not 
all of them. We can go into in the Q&A period what some of 
those gaps still are. Also, just because you define an action 
that you are going to take in a plan does not mean that you are 
going to deliver on that action.


           northeast corridor high speed rail implementation


    Acela Express is delayed approximately one year, and that 
is going to hurt Amtrak's revenues in 2001, this year, by about 
$83 million. Amtrak expects to make up for the lost revenues 
with other actions this year. If Amtrak can meet its current 
target of 2001 to have all 20 train sets and 15 high horsepower 
locomotives in service, they ought to see full revenue in 2002. 
In other words, by the time we come back next year, we ought to 
see the proof in the pudding. In fact, if the airline delays 
continue to flood the northeast, Amtrak's projections could 
turn out to be conservative.


                         capital funding needs


    I would like to say a word about capital at Amtrak, the 
short- and long-term capital needs. Amtrak is not going to 
survive if the Congress does not address the capital shortfall 
at Amtrak. Even if they were somehow to meet their operating 
self-sufficiency by the due date, they are going to need 
substantial amounts of capital. We do not see any set of 
circumstances in the foreseeable future where Amtrak will be 
able to operate without substantial capital.
    Amtrak values their capital need at about $970 million in 
2002 and 2003. We see their minimum capital needs during those 
years at about $370 million and $409 million, and that is the 
bare bones minimum.
    It is going to continue to need significant long-term 
capital funding beyond 2003. Amtrak estimates that it will need 
about $1.5 billion each year to address overall capital needs. 
About $1 billion of that is for what it has now and another 
half a billion to improve the other corridors and enhance high 
speed rail and things like that. I do not think the $1.5 
billion estimate of Amtrak is far off base, Mr. Chairman.


                         amtrak's safety record


    I also would like to say something in light of the events 
over the weekend with the derailment, about Amtrak's safety 
record, which is the last slide. Despite several high profile 
accidents in the past few years, you should know Amtrak's 
safety record overall has been excellent and better than the 
combined average of all other railroads in the U.S. Of the 12 
most notable Amtrak accidents since 1993, only one has been in 
the northeast corridor.
    Outside of the northeast corridor, and this is important to 
realize, Amtrak does not own the track so they are dependent 
upon other people to maintain it, as well as deal with the 
grade crossings. In the northeast corridor Amtrak is 
responsible for that, and that is where its record is very 
good.
    We have had some concerns with some of the freight's 
efforts to fix deficiencies noted during inspections by the 
Federal Railroad Administration, and we are going to be 
reporting on our findings this summer.
    That concludes my oral statement, Mr. Chairman.
    [The accompanying files, prepared statement and biography 
of Kenneth Mead follow:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


            U.S. General Accounting Office Opening Statement

    Ms. Scheinberg. Thank you, Mr. Chairman, Members of the 
Subcommittee. I am pleased to be here today to have the 
opportunity to testify on issues surrounding the federal 
commitment to Amtrak and intercity passenger rail, particularly 
high speed rail.
    We believe the time is right for the Congress to begin 
considering the future of intercity passenger rail service in 
the United States. There are two reasons why this discussion 
should begin now. One reason is Amtrak's uncertain future. The 
second is that Amtrak and designated rail corridors will 
require tens of billions of dollars in federal investments to 
maintain and improve intercity passenger rail service.
    Before making any decisions on long-term funding of these 
magnitudes for Amtrak, the Congress needs to decide whether the 
magnitude of the benefits to the public and the nation's 
transportation system justify such large investments.
    First, despite its concerted efforts, we believe that 
Amtrak will very likely continue to require federal operating 
assistance after 2002. As you know, for the most part the 
Amtrak Reform and Accountability Act prohibits Amtrak from 
using federal funds for operating expenses after 2002, and if 
it does not meet this requirement then the railroad has to 
submit to Congress a plan for its own liquidation.
    Using Amtrak's own measurement tool, the budget gap, the 
railroad has made only limited progress towards operational 
self-sufficiency. In the last six years, it has reduced this 
gap by less than 25 percent of the total. As a result, within 
the next two years Amtrak must reduce the gap by three times as 
much. This is a major hurdle for Amtrak, especially when we 
note that last year Amtrak reduced its budget gap by only $5 
million, achieving very little of its planned $114 million 
reduction.
    The second reason for beginning a discussion now on the 
future of intercity passenger rail is that the federal 
government is being asked to commit tens of billions of dollars 
in federal capital support for Amtrak in high speed corridors.
    For example, Amtrak's latest strategic plan calls for the 
federal government to provide $30 billion over the next 20 
years to address many, but not all, of its capital needs. This 
amount is nearly double the federal support provided over the 
previous 20 years.
    In addition, legislation was recently introduced that would 
allow Amtrak to issue up to $12 billion in tax credit bonds for 
capital investments in equipment and infrastructure on ten 
designated high speed corridors and on Amtrak's northeast 
corridor. These ten designated corridors are all in various 
stages of planning, and no one knows the total cost. However, 
it is very reasonable to expect that these corridors could 
require much more in federal assistance than the $42 billion in 
Amtrak's plan and the bond bill combined.
    Before large additional investments are made, we need to 
thoroughly understand the benefits to the public and to the 
nation's transportation system resulting from such investment 
in intercity passenger rail.
    For example, advocates of intercity passenger rail cite it 
as a solution for air travel delays. Yet, intercity passenger 
rail will never be time competitive with air traffic for longer 
trips. In this regard, intercity passenger rail works best when 
it is designed to be time, price and service competitive with 
other modes.
    Advocates also cite intercity passenger rail as a solution 
for our nation's overcrowded highways. If this is the case, 
then investments should be targeted to areas that are now 
experiencing or are likely to experience congestion. High speed 
rail may work best for relatively short trips, say of a few 
hundred miles, when it connects densely populated cities with 
substantial travel between those cities. Amtrak's Metroliner 
service between Washington, D.C., and New York City is an 
example of this.
    Making rail service available is not enough. For rail 
passenger service to fulfill the promise many see for it, it 
must be competitive with other modes. It must induce people to 
leave their cars--no small task.
    Intercity passenger rail may have a place in our nation's 
transportation system, but we need to thoroughly understand the 
conditions under which it can help further goals such as 
relieving congestion and offering travel choice so that we as a 
nation can make smart investment decisions.
    In conclusion, we believe the time is right for the 
Congress to begin considering the future of intercity passenger 
rail and to bring all the affected parties into the discussion. 
This discussion should start with realistic assessments of the 
public benefits and costs of investments in intercity passenger 
rail and other modes.
    Such analyses would precede reaching agreement on the goals 
that would be pursued, the extent to which Amtrak and other 
intercity passenger rail systems can contribute to those goals 
and the commitments of large amounts of federal funding.
    Mr. Chairman, that concludes my statement.
    [The prepared statement and biography of Phyllis Scheinberg 
follow:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


          iowa accident on burlington northern santa fe track


    Mr. Rogers. Thank you, Ms. Scheinberg.
    President George Warrington, first before you respond to 
those statements would you care to briefly tell us where we are 
on the crash that occurred over the weekend perhaps first?
    Mr. Warrington. Yes. That train was traveling between 
Chicago and the west coast. It is a daily service in both 
directions. That particular stretch of track is owned, 
maintained and dispatched by the Burlington Northern Santa Fe 
Railroad, who we actually have a very good working, operating 
and commercial relationship with.
    That particular stretch of track in Iowa was inspected by 
the Burlington Northern with its sperrey car, which is a track 
geometry car, which they do every 30 days on all those 
stretches of their territory that carry Amtrak passenger 
trains.
    Their inspection, done in mid-February, had found a defect. 
These types of inspections are intended to pick up those 
defects which cannot be detected by the naked eye. As they 
should have, they replaced that section of track that the 
sperrey car had identified as having a defect.
    There is not a final conclusion here, and the NTSB will 
have to make that, but I believe that the preliminary evidence 
suggests that that section of track that had been replaced had 
some sort of manufacturing or internal defect. It appears that 
way. Under the force, the lateral forces of our train, it 
broke.
    That will happen. If a rolled piece of steel rail has in 
the manufacturing process a defect it will fail, and it 
appears, Mr. Chairman, that that is what happened in that 
situation.
    Mr. Rogers. All right. Thank you.
    Mr. Warrington. Mr. Chairman, I do have a formal statement 
that I will put on the record, but what I would like to do is 
just sort of make a few remarks to open. I would be happy, 
then, to answer all of your questions.


                        amtrak opening statement


    Mr. Rogers. We will enter your written statement in the 
record. If you could summarize it for us?
    Mr. Warrington. Thanks, Mr. Chairman.
    I guess the first thing I would like to do is state 
emphatically that we at Amtrak and I personally am absolutely 
and entirely focused and fixated on achieving the Congressional 
mandate to become operationally self-sufficient in Fiscal year 
2003. It will not be easy, and we all know that, as Ken and 
Phyllis have indicated.
    I can only tell you that we are fixated on it happening, 
and we have made significant progress over the past three years 
to achieve this mandate. The basic measuring stick for our 
success within the context of the Congressional mandate is the 
amount of federal money that we do receive from our 
appropriation that we actually draw down and apply to 
operations, and the facts are that over the last three years we 
have conformed to our business plan for that portion of 
appropriations that is devoted to operations.
    Nevertheless, we have a number of challenges, as Phyllis 
and Ken have outlined, facing us this year and next. I am well 
aware of those difficulties. These problems did not arise 
overnight, and I have to tell you that we have a business plan 
that will effectively, with a lot of hard work and a lot of 
focus, deal with them. It is not easy, and there is no silver 
bullet.
    Frankly, this year to year survival is what Amtrak has been 
doing since its inception. The big difference between then and 
now--you referenced the beginning of Amtrak in the early 1970s 
in the aftermath of the freight railroads exiting the passenger 
business and Amtrak being charged with the franchise 
responsibility to take these neglected assets and try to make 
this work.
    The big difference, frankly, I believe between then and now 
is that the nation itself is now embracing rail as a way to 
ease the growing congestion we all face around the nation. 
Frankly, I believe, Mr. Chairman, that Amtrak is increasingly 
well positioned to take advantage of this change that is going 
on in the travel market.
    In other words, I want to make this place work because I 
believe--we believe--that we all have a real opportunity here 
if we can make this work right. It is an opportunity for Amtrak 
to make a real difference around choices and alternatives in 
the national transportation system and to make a real 
difference in people's lives on a day to day basis.
    I watched your hearing on the state of aviation system last 
Thursday on C-SPAN, Mr. Chairman, and it was very clear that 
there is a lot of frustration, around late flights and airport 
congestion. We very much believe that with the right capital 
investment and the right long-term planning we can make a 
difference in the marketplace around travel choices and 
alternatives for Americans.
    What used to be a northeast phenomenon is really a 
phenomenon that is occurring all across this country. We have 
compiled healthy ridership and revenue numbers over the past 
few years, which Ken mentioned. Last year our ridership was up 
to 22.5 million, and ticket revenue grew over ten percent, 
which is a good barometer of what is going on in the 
marketplace. In fact, including all lines of business we 
generated revenues totaling $2.1 billion last year.
    We also launched--though a year late--our high speed Acela 
service in the northeast. We began to institute our network 
growth and connectivity program, and we worked very hard to 
improve our relationships with the freight railroad industry, 
who we depend upon deeply, as was the case this weekend. We 
depend upon the freight railroad industry for the performance 
of a large portion of our passenger network.
    Mr. Chairman, my strong message today is to reinforce how 
important capital investment is to any railroad. This business 
is one of the most capital intensive businesses in the western 
world. Our ability to create greater market reach, strengthen 
the national system and develop market rich corridors as 
Phyllis referenced is directly tied to the level of capital we 
choose to make on this system.
    We are not any different than any other modes of 
transportation. We can show you the business plan, our vision 
of passenger service over the next 20 years, and we can talk 
about some of our successes and our challenges, but at the end 
of the day we as a nation really need to decide what we all 
want out of our national passenger rail system and whether we 
are willing and able to pay for it. There is a cost. In the end 
you are right, Mr. Chairman. It is all about money.
    As the country has this debate, it is critical that Amtrak 
continue to receive a level of capital support from the federal 
government through the appropriations process. Amtrak was 
authorized to receive $955 million in funds for FY 2002 and has 
officially requested that level of funding through our grant 
request.
    We have indicated, as you mentioned, that the President's 
budget request of $521 million, if it were provided at a 100 
percent outlay rate, is actually a very positive recommendation 
and one which I fully embrace and support. It actually gives us 
a better capital program, early in the fiscal year, that makes 
more of a difference than a $955 million scored at the 
traditional 40/60 scoring, which is what the tradition has 
been.
    I would like to make one more point on this subject. Even 
under the best business plan scenario, I cannot and we cannot 
make every train in this system profitable. It simply is not 
the reality and will not happen. In fact, we should not be 
distracted by the notion that passenger train operations are a 
profitable venture in a classic P&L sense as a commercial 
enterprise. That ended in the late 1940s.
    What I can do is leverage all of the assets that we have--
commercial development, commuter service contracting where we 
are an operator of eight large commuter systems in this 
country, mail and express business as Ken mentioned earlier--to 
generate additional revenues to cross subsidize the critical 
passenger services that by nature will never fully cover all of 
their costs on a fully allocated basis.
    In this manner, we will get the government out of providing 
operating subsidies to passenger rail for the first time in 30 
years. I am convinced we will do that. In doing so we can make 
this railroad a contributor to the nation's transportation 
system.
    After all is said and done, passenger rail investments 
represent less than one percent of the total amount of federal 
transportation funding we spend in America. I will tell you, 
though, that it seems to buy about 99 percent of the attention 
in the annual appropriations process. At first I did not 
understand that when I came to D.C. three years ago, but now I 
have come to accept that, and I understand that.
    Mr. Chairman, I honestly welcome your questions and your 
observations as we begin this association. I know, Mr. 
Chairman, that Amtrak comes with baggage. I know the history of 
Amtrak with some Members of Congress. I make no excuses for 
that at all.
    Instead, I want you to know that we are working very hard--
very, very hard--to shed the baggage that has been wrapped 
around our neck for about 30 years, and I commit to you, as I 
did when we met last month, to be very direct and very honest 
with you and with this committee.
    I really believe we have an outstanding opportunity before 
us, and I hope that we can move forward in a constructive way. 
I understand your concerns, Mr. Chairman, and the concerns of 
the committee.
    I just want you to know that we are focused and fixated on 
dealing with the challenges that lie ahead of us. Frankly, the 
operating self-sufficiency test provides the kind of discipline 
and focus that is necessary for management and the troops in 
this company, and we are working very hard to get there.
    There are no guarantees, and I am not going to sit here 
before you today and make an absolute guarantee. I cannot do 
that. There are too many factors that I cannot entirely 
control.
    We would be in much better shape today--in fact, the $100 
million loss last year would have been a $36 million positive 
if our high speed service was able to be introduced when our 
plan assumed it would have been. Even with those challenges and 
those negative influences, we are working very hard to 
compensate and overcome in order to meet the mandate that the 
Congress has directed us to meet.
    Thank you, Mr. Chairman.
    [The prepared statement and biography of George Warrington 
follow:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Rogers. Thank you, Mr. Warrington.
    First, let me express on behalf of all of us here with you 
our condolences to the family of the lady who was killed in the 
crash in Iowa and to those who were injured there and their 
families. We hope for a speedy recovery of those who were hurt.


                      operational self-sufficiency


    Mr. Warrington, you are headed for another train wreck 
here. 2002 is the end of the line, and there is a big abyss 
beyond that as far as the Congress is concerned toward future 
subsidization of Amtrak any further. We need a national debate 
about what is going to happen then.
    These folks say that they do not think you have a chance to 
meet the deadline. You say you think you can make it. It is a 
daunting challenge, I think you have admitted at the outset.
    In the event that you do not think, what should we do, the 
Congress and the people? How can we generate a national debate 
about whether or not the taxpayers of the country want to 
continue to subsidize a money losing operation to transport 
people essentially between Washington and Boston on the eastern 
corridor? That is essentially where your traffic is. How do we 
generate that debate?
    Mr. Warrington. It is interesting. You know, when I first 
came to Amtrak six years ago, I was hired on as president of 
the northeast operation in Philadelphia. I have been here in 
Washington responsible for the national network, now for nearly 
three years. You know, even in my own head my own thinking has 
evolved over the last couple of years.
    In fact, there was a great story that a syndicated 
columnist, Robert Reno, did about three weeks ago for News Day 
New York. He basically said for 30 years Amtrak has sort of 
survived as a political entity based upon the fiction of 
necessity in many parts of this country.
    What he pointed out was that, fortunately, we have 
preserved that skeleton, and it really is a skeleton of what it 
once was, the long distance train network, and he observed that 
we have, fortunately, considering all the market forces going 
on out there on the highways and aviation side, that we have 
preserved that skeleton.
    It has been difficult. It has been hard. And, it has not 
been perfect, but there is increasing opportunity to use what I 
characterize actually as America's most under utilized asset, 
which is its railroad system for both shippers, as well as for 
passenger traffic.
    I think what has really happened over the past couple of 
years in the context of the aviation/highway discussion and 
frustration is a matter of relevance. I think this is really 
all about whether or not intercity passenger service, however 
we define it, as long distance service or corridor services or 
some mix, is whether or not we believe that that network is 
relevant looking forward.
    I think I could argue that for a number of years that some 
long distance service and that parts of ``the system'' were not 
necessarily relevant, as the writer in that story pointed out. 
Yet, I will tell you that I regularly travel around the country 
and I meet with lots of CEOs, business leaders, chambers of 
commerce, governors and mayors, Republicans and Democrats, in 
virtually every region of this country. I have to tell you that 
there has been an incredible momentum building about the 
frustration out there and about the role that rail service and 
investment in rail service capacity, reliability, speed, travel 
time, can make in providing frustrated travelers with better 
choices and alternatives.


                     ridership on eastern corridor


    Mr. Rogers. What percent of your ridership is along the 
eastern corridor, the Washington-Boston corridor?
    Mr. Warrington. We carry 22.5 million trips a year. Let me 
answer that question directly, and then I will give you a 
context for it. About 12 million of those trips occur between 
Washington and Boston.
    Mr. Rogers. So it is about half?
    Mr. Warrington. About half, and that has been the tradition 
generally.


                          ridership corridors


    Mr. Rogers. And where are the other big loads of riders?
    Mr. Warrington. It is pretty much spread out across the 
system, although the second largest corridor we have is San 
Diego to Los Angeles, our Surfliner corridor.
    Mr. Rogers. And what percent of your ridership takes place 
on that?
    Mr. Warrington. I cannot tell you off the top of my head, 
but it ranks number two with 1.7 million trips last year. Our 
Cascades corridor, Portland-Seattle-Vancouver, is also one of 
our heavy corridors. Chicago-Detroit is also a heavy corridor.
    Our Florida trains, our auto train are all very attractive, 
and several of our long distance trains also have been 
significantly improving their performance, both in terms of 
ridership demand and revenue cost ratios.


                        mail and express service


    Mr. Rogers. Now, let me ask you. Was Amtrak set up for a 
fall from the very beginning? I mean, in the pre-Amtrak days 
when railroads all hauled passengers, they made their revenues, 
did they not, not from passengers, but from the freight they 
hauled, and the passengers that rode on the same trains in many 
cases were sort of getting a free ride based on the revenues 
that the freight was paying for that railroad. Is that 
generally correct?
    Mr. Warrington. That is a very interesting observation. 
Generally that is correct.
    Mr. Rogers. But now when Amtrak was put into place, you are 
not allowed to haul freight. You can only haul people. We can 
qualify that a little bit, but you are not allowed to make the 
revenues from hauling freight that would possibly subsidize 
your passengers on the train, correct?
    Mr. Warrington. That is not entirely correct, Mr. Chairman.
    Mr. Rogers. Straighten me out.
    Mr. Warrington. If you go back to the 1950s and early 1960s 
and you look at the P&Ls for the private freight railroads, the 
Pennsylvania Railroad, Erie Lackawana, and the New Haven 
Railroad, what you will find is that a significant share back 
in the days when, you know, passenger trains were 
``profitable,'' you will find is that on the tail end of those 
``profitable'' passenger trains was an extraordinary amount of 
mail business. In fact, in those days the mail was actually 
sorted on board those trains.
    When Amtrak was created, Amtrak basically was vested with, 
and you talk about being set up to fail--with assets, both in 
the northeast corridor as well as an equipment fleet that was 
essentially out of gas from suffering through decades of 
neglected maintenance. We got the discarded remnants and a 
system that the private railroads just did not want to run 
anymore, so the assets and infrastructure base were woefully 
inadequate.
    Amtrak never effectively pursued what I believe were its 
rights under the law to exploit what we call mail and express 
business on the tail end of its long distance trains. We 
recently have been developing Mail & Express as a business 
simply for the purpose of improving the underlying economics of 
our long distance trains. It has been difficult, and it has 
been slower than we would have liked.
    In fact, our numbers, which Ken and Phyllis talked about, 
for the past two years have been below where we want them to be 
in part because it has been hard for us to enter that market. 
It requires, once again, cooperation and commercial agreements 
with the freight railroads like the Burlington Northern-Santa 
Fe, Norfolk Southern, CSX and UP. We have made some significant 
progress there. We will make more progress with the freight 
railroads commercially I know over the next several months.
    The short answer is we were not in that business, and it 
did in part contribute to our difficulty. We have reinvited 
that business within Amtrak as a niche, and most of that focus 
is around contracts with the Postal Service, as well as 
refrigerated business which does not travel on the railroads 
today in any significant amount.
    Mr. Rogers. Well, after years of negotiations Amtrak still 
does not have the necessary freight access agreements to fully 
implement your mail and express plan, correct?
    Mr. Warrington. Correct. We do not have all of the 
agreements that we would like.
    Mr. Rogers. Do you think the freights will ever let you 
carry the amount and kind of express traffic that you need to 
achieve self-sufficiency?
    Mr. Warrington. As long as our business is focused on non-
competitive commodities and goods and we are not in any way 
competing with or stepping on each of those railroad's 
franchises, I am very optimistic that we will be able to 
execute more commercial arrangements with freight carriers.
    Mr. Rogers. But you have to do that in the next year and a 
half. You have to reach these agreements with the other 
railroads in a year and a half and then get it in operation in 
time to save yourself, right?
    Mr. Warrington. Yes. Right now we generate about $125 
million a year in gross revenue on our mail and express 
business. We want to grow that business to about $250 million, 
which is probably a conservative number.
    That increment does require as I have mentioned, commercial 
agreements with freight carriers. I will tell you that we have 
been at this for about 18 months with the carriers, and each of 
them is a different case study. I am optimistic, however, based 
upon discussions that have been going on literally over the 
past two weeks, that we will see some breakthroughs there in 
the very near future.


                   operational self-sufficiency plan


    Mr. Rogers. Now, the Inspector General and the General 
Accounting Office have both testified previous to you this 
morning and are saying even though you have a plan, it is not 
working. You say it is, but last year you planned to increase 
revenues and reduce expenses by $114 million, but you only 
closed the gap by $5 million, not $114 million.
    The Inspector General has said that you have to reduce your 
cash losses by almost $100 million each year to reach the goal 
of self-sufficiency. How can you do that? I mean, one of them 
very pessimistic; the other becoming more pessimistic. You are 
still saying yes, we can do it. We are the little engine that 
can. We can do it. We can do it.
    Help us become a little bit less pessimistic up here. How 
can you possibly do it?
    Mr. Warrington. We have a clearly identified plan, and the 
plan has literally hundreds and hundreds of internal actions 
relating to both revenue enhancement, as well as cost 
management. The ground rules are that cost reduction or cost 
management cannot reduce the quality of our service, and we do 
not want to begin dismantling the network because it thrives on 
connectivity.
    This is really all about the history of Amtrak not 
attacking the basic internal business management systems that 
are hard to do but require good management to find where the 
money is. I will tell you, frankly, given the political kind of 
structure of this organization over 25 years, the easy way out 
was always, and I had watched this from the outside, and now I 
have observed the culture from the inside, to hold up a couple 
of trains as Washington cuts, and extract from Congress enough 
money to restore those trains.
    I will not do business that way. My challenge is to try to 
hold this national network together on the promise that it has 
opportunity looking forward. That is not the easy way out, by 
the way, Mr. Chairman. My focus therefore, has been to attack 
the business systems inside the company, the way we run our 
business, the way we buy our goods and services, the way we 
deploy our forces so that we are as efficient as possible.
    I will tell you that we now have 51 cost management teams 
across the entire company who are focused on delivering between 
now and 2003 $96 million of incremental revenue actions and 
$340 million of expense actions. That is in the context of a $3 
billion operation. That is manageable. It is reasonable. It is 
hard. But, it is doable and achievable. It requires management 
focus.
    I will give you a small example, Mr. Chairman. Every 
Tuesday morning I run a meeting, and I have every president and 
every senior officer of the company around the table. We review 
every seven days where we are on our cost management efforts 
across the company, as I said, with two ground rules. This is 
not about the easy way out in eliminating trains nor will we 
degrade service quality. Our goal is to find where the money is 
in this place, and we need to operate and behave smartly.
    I will give you an example. Amtrak consumes 80 million 
gallons of diesel fuel a year. The first thing we did a year 
ago was to introduce a hedge program. Thirty-three percent of 
our fuel is on a hedge program. Our fuel budget actually went 
up by $28 million.
    You know, Ken talked about budgeting expense increases. Our 
fuel budget went up $28 million over the past year, and one of 
the first things we did was go into a hedge program.
    Mr. Rogers. What is a hedge program?
    Mr. Warrington. We basically buy fuel prices at a locked in 
rate to hedge against increases or decreases. Now, if the 
bottom drops out you end up paying more than the market, but if 
you lock in at a certain rate and prices keep rising and if you 
are smart enough to do it early on, you can save a lot of 
money.
    Because we did not want to tie up the entire supply that 
way, given the riskiness of the up and down cycle, we took 
almost 40 percent of our fuel supply, and we hedged it. We 
secured prices of about 53 cents a gallon compared to a market 
price of 78 cents a gallon. That is just basic business 
management. That will save us $5 million this year.
    At the same time, we have 250 diesel locomotives that are 
running 24 hours a day plus switch engines across the system. I 
instituted an operating practice which requires that every 
diesel locomotive now be shut down within 15 minutes of its 
arrival at its termination point. This, by the way, is not the 
tradition in the railroad business. Shutting down a locomotive 
within 15 minutes--of its arrival--at a terminal if it is not 
going to be put back in to service within the next hour will 
save us $5 million a year.
    I can share with you, Mr. Chairman, literally hundreds of 
examples of those kind of focused approaches to cost management 
and revenue enhancement. Some of them are a stretch. I cannot 
even guarantee that all of them are going to happen, but I have 
a ready reserve of those kinds of items, and it just requires 
focus and discipline.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Rogers. In the past years, Amtrak has been able to 
supplement its annual appropriations bill monies that we give 
you. You have been selling off excess real estate and excess 
equipment in order to keep going. Is that true?
    Mr. Warrington. We have been doing a couple of things. 
Before I came to Amtrak, Amtrak did not have commercial--
frankly, commercial smarts. We have lots of assets, 
particularly in the northeast corridor, that were not 
effectively exploited from a revenue point of view.
    We were challenged with operating self-sufficiency. 
Implicit in that is that some trains are not going to be 
profitable, and we need to cross subsidize this system. In 
other words, we need to take every asset we have and find as 
much money as we can in those assets to help cross subsidize 
the system.
    We have grown our commercial division within Amtrak from an 
operation that was producing about $5 or $6 million a year to a 
$75 million a year profitable business. Much of that is around 
telecommunications and real estate development on the northeast 
corridor particularly around Baltimore Union Station, 30th 
Street Station in Philadelphia.
    We have dozens and dozens of agreements with cellular 
companies and telephone companies for the use of conduit that 
was originally put under the railroad in the northeast corridor 
in 1930 and 1932, conduit that is available for either fiber 
optic or other cabling needs.
    I just want to tell you we have exploited those assets as 
much as possible to extract as much revenue to help deal with 
the cross subsidy requirement and hold this system together.


                       federal capital subsidies


    Mr. Rogers. Well, I am going to yield to others to ask 
questions now, but I think America needs to reflect on this 
question.
    In the event that you are not able to reach self-
sufficiency as we directed soon to be five years ago, America 
needs to decide if they want to spend a half a billion dollars 
a year or so to operate Amtrak in very limited parts of the 
country geographically. As you have said, there are only three 
or four major users as far as regions go of Amtrak in the 
country.
    The rest of the country needs to decide whether or not they 
want to have us appropriate a half billion dollars or so every 
year to subsidize those operations, and that is the question 
that I think the first two witnesses were saying. We need a 
national dialogue. Folks, what do you want us to do? I think 
the day is coming when we will face that question.
    Mr. Sabo?
    Mr. Sabo. Thank you, Mr. Chairman. I would agree. The 
question you raise is fundamental.
    I always have strange feelings in all these hearings on 
Amtrak. I have been going to them for many years now, and my 
hunch, Mr. Chairman, is they are going to need some subsidy, 
but the question then gets to be if you do a subsidy how do you 
do it in a fashion that still keeps the management edge on 
doing good management. I am not sure I know the answer to that.
    You know, I suppose I, like many others, drove in today. 
With rain, the traffic was slower. It took longer than I 
expected, but I would hate to think of trying to have driven in 
this morning if Metro did not exist.
    We do not, but the locals subsidize that operation. They do 
not pay for capital. They do not depreciate. They have a 
revenue base that they do a fairly good job in comparison to 
other systems in getting operating revenue, but they are still 
subsidized. It would be chaos if we did not have it.
    I expect that would be true of the northeast corridor if 
Amtrak did not exist, but we make these comparisons, and you 
make reference to percentage of transportation funds. The bulk 
of those come from trust funds that are related to usage.
    On the other hand, Mr. Chairman, because of the last 
airport air bill we put over $2 billion in operating subsidy 
out of the general revenue fund into FAA last year, and we are 
going to have to continue to do it. Congress, in its wisdom, 
said the first priority of the trust fund was runway 
construction and construction of facilities and equipment, and 
any money left over went to operations. Beyond that, we had to 
use over $2 billion of general revenue fund to operate the FAA 
in this country.
    Highways, while all our funds come from the trust fund, 
when you get to the state and local level are heavily, heavily 
subsidized by local property taxes for the operation of the 
highway and trucking system in this country.
    You know, I do not think your comparison is accurate. On 
the other hand, we have immense public involvement in other 
major modes of transportation, so I listen, and I hope you make 
self-sufficiency by 2003. I think it has to be your goal.
    If it is done, I hope it is done in such a fashion that it 
does not mean that it can show a net zero for one year and then 
quickly falls off in the future because decisions are made to 
get there in the short term which actually hurt the long term, 
but we fundamentally have to sort through this.
    Now we have this big enthusiasm for major expansion of high 
speed rail, and I have the sense we should figure out or 
probably should first figure out how we get what we are doing 
today going in a fashion that we are willing to support 
politically in this country before we start major expansion, 
and I would agree that we need some good analysis. There is 
wild enthusiasm for it with great expectations with no numbers 
or real understanding on what it may or may not cost.
    I never totally understand the relationship between you and 
the freight companies or the freight rails when you use their 
rails, and I gather that any major expansion to speed up high 
rail would most fundamentally involve using those rail lines, 
maybe some of your own lines in some places. I do not know, but 
I am told you coordinate okay, and I notice in I think some of 
your materials or someone's you want priority for passenger 
rail over freight trains.
    I never quite fully understand that coordination and if you 
run into competing demands how that actually works because I 
suppose we had a history at one time of expecting freight to be 
chaotic in schedule, but I am told that today rail freight has 
to be on time. It cannot be early. It cannot be late because 
more and more customers want the capacity there at times, so I 
am just curious.
    I guess this is the wrong time. There are other folks that 
have questions, and that is more theoretical than the immediate 
budget of next year. I do not know that I have a specific 
question or an answer to I think the fundamental question the 
Chair raised, but I think it is one we have to sort out.
    I am curious. You know, if we do not meet the goal, I do 
not think there is any way we all of a sudden close Amtrak 
down. That would be very expensive also. I forget what the 
closing costs are. They are immense.
    If we do move beyond that on an ongoing subsidy, how do we 
deal with that issue of making sure that management stays sharp 
and that increasing subsidy just is not the answer for not 
doing good management?
    Mr. Warrington. Let me try and deal with that in a couple 
of ways. First to your question about if we get there what 
happens and do we then sort of fall off the edge. The answer is 
yes, we will get there, and we will fall off the edge, and it 
will all have been for naught unless we fix the capital 
investment problem on a sustained basis.
    Mr. Sabo. We have so many capital issues related to either 
Amtrak or high speed rail. I just wanted to make sure that when 
you are speaking of it if you are speaking to the existing 
system, the existing service, or the hopes others have of 
substantial expansion?
    Mr. Warrington. I am speaking of both. In fact, the capital 
program that I outlined in January, really the first--in fact, 
Phyllis and Ken were always challenging me and us to, you know, 
do a multiyear capital program because we never had one in 
place. We did one. It is a 20 year program. It calls for about 
$1.5 billion a year in federal capital.
    What is interesting is in the first five years, the program 
is much more oriented toward the existing system. That, 
reflects a large measure of modernizing and overcoming a lot of 
neglect both in terms of plant and equipment.
    What happens on a sliding scale in that the level of effort 
moves in greater proportions to expansion. What I do not want 
to do, Mr. Sabo, is get overly preoccupied with all of the, you 
know, sexy, high speed programs and not deal with the 
fundamentals. We have fundamentals that we do have to deal 
with.
    So my answer is we need to do both, and it is vital that we 
do both. Number one, under our plan, reliability and travel 
time in the existing system would be improved. Safety would be 
improved significantly. Our single biggest safety issue out 
there today is grade crossings, and a large part of that high 
speed program will actually improve or eliminate grade 
crossings and that will have a material effect on our 
operations, including travel time savings, reliability and 
safety on our existing long distance network.
    A couple of other points about freight railroad 
relationships. The simple fact is we have the right under the 
law to operate our trains over their tracks. We are to 
compensate the railroads for incremental cost associated with 
our presence, whether that be to address capacity related to us 
or maintenance requirements associated with our track speed 
requirements.
    When you add it all up about $100 million a year in access 
fees and performance fees associated with running our trains on 
their railroads.
    Mr. Sabo. But if one is to assume that one significantly 
increases speeds of trains outside the northeast corridor, I 
would assume that that level of support for capital to improve 
trackage would have to jump and jump immensely.
    Mr. Warrington. It is about incremental improvement, Mr. 
Sabo. You start with grade crossings. You start with passing 
sidings. You start with high density signal systems, which 
improve the capacity for shippers on the freight railroads, as 
well as for passenger trains. Virtually all of these 
improvements would be done on existing rights-of-way.
    Where there is physical capacity it is simply a matter of 
adding additional track capacity, higher density signaling 
capability, passing sidings, and by reducing or eliminating 
hundreds, if not thousands, of grade crossings.
    Mr. Mead. I think, Mr. Sabo, that your point about 
understanding better what the numbers look like for high speed 
rail is an important one. I would underscore, though, there is 
even a more fundamental question, especially with this high 
speed rail bill being discussed, the bond bill.
    It is not really realistic to look at Amtrak's financial 
picture by saying well, we have the Appropriations Committee 
here and we have come in and asked for half a billion dollars a 
year from them, because that is not the entire picture. The 
other part of the picture is this $12 billion bond bill.
    I know that the banner for that bond bill is high speed 
rail, but what is high speed rail? If the people out there in 
the hinterland think that they are talking about a train that 
will go 125 or 150 miles an hour, they should call Amtrak to 
find out just how fast that train will go and how much of what 
is going to happen in that corridor is really just putting it 
in a state of good repair or enhancing it so you can get 
incremental gains.
    I worry on this high speed rail bond bill that there are a 
lot of people that think they are going to get high speed rail 
in their community. High speed rail is very expensive, and we 
need to finish what we started here in the northeast corridor 
and see how that works.
    Perhaps Mr. Warrington was implying that as well, but I 
think there are a lot of people that have an expectation there 
is going to be high speed rail all over this country. It is 
very expensive.
    Ms. Scheinberg. Mr. Sabo, could I just add to what Ken is 
saying that the Amtrak plan is talking about $42 billion, and 
that includes developing these ten not, even planned, yet 
corridors.
    It is going to cost much more than that. It is going to 
cost much more than that $42 billion, and those corridors and 
the groundswell that is coming from the states are looking to 
80 percent federal funding for the development of these 
corridors. This is a huge federal commitment.
    We really need to be sure what we are getting into before 
we start down this road. It is not going to be $30 billion. It 
is not going to be $12 billion. It is not going to be $42 
billion. This is huge. As Ken said, the expectations are out 
there, but they are looking to Uncle Sam to pay for it.
    The other issue having to do with the freight railroads is, 
as you said, that the freight railroads are increasing their 
traffic and having their own issues with congestion on their 
tracks. Expanding passenger rail on freight tracks is going to 
be a congestion issue on those tracks.
    Amtrak has priority on the tracks, but they do not always 
get priority. I mean, we can discuss that if we want, but 
freight railroads have their own needs, and competing with 
Amtrak and the commuter rails is going to be a real issue. In 
addition to money, there are other issues; such as capacity.
    Mr. Mead. I have a number for you just to keep in mind. 
Over the next five years, the way we see it, we are probably 
looking at $900 million to $950 million to maintain the current 
system.
    This $1.5 billion figure you have, everything over about 
$950 million for the next five years is probably in the growth 
category. It would be in the corridors, new corridors. That is 
the split I would make and I think the committee should keep in 
mind.
    Mr. Rogers. Thank you, Mr. Sabo.
    Mrs. Emerson?


                        national railroad system


    Mrs. Emerson. Thanks, Mr. Chairman.
    My question is for you, Mr. Warrington. You know, as a 
citizen of the United States, I am just a great fan of Amtrak, 
and I believe that you all are really providing a great service 
for many people throughout the country, and I think we have to 
do everything that we can to help keep Amtrak up and running in 
as many parts of the country as we can. That is on the one 
side.
    On the other side, as a Member of Congress who represents 
26 extraordinarily rural counties in southeast and southern 
Missouri, I hear from my constituents all the time about why 
are you all forcing we taxpayers to fund Amtrak, a system that 
not only is continually in debt, but continually loses money, 
and so they have asked, and so on behalf of my constituents I 
am going to ask this question.
    You know, I am looking at the map of where Amtrak routes 
go, and obviously you can see that a majority of rural America 
is not within hundreds of miles of the nearest rail station, so 
I want you to help me, if you would, answer my constituents who 
are always on my back about this and confirm about us being or 
them as taxpayers being stuck paying your bills year after year 
when there are other modes of transportation on which they must 
rely to get to where they need to go in the larger cities like 
St. Louis or even Memphis, Tennessee, or Kansas City. What can 
I tell them? How do I justify this?
    Mr. Warrington. I guess you could start with what I hear 
from all of the folks in the northeast that they do not 
appreciate the fact that the income that I earn on Metroliners, 
from commercial development on the northeast corridor and all 
of the other positive revenue streams that we generate on the 
successful pieces of the business are used to cross subsidize 
trains that do not make money and will struggle to be 
profitable. Frankly, most of those trains travel through rural 
America all across the country and those trains tend to be less 
than good performers.
    I would also say that this is really about regionalism as 
well. It used to be about just the northeast versus the rest of 
the country. As I was mentioning earlier, this is not just a 
northeast phenomenon anymore. It is a midwest phenomenon. It is 
a Pacific northwest. It is a southeast phenomenon.
    Just two days ago, all of the southeast chambers of 
commerce were pulled together by Bank of America in Charlotte, 
North Carolina. Governor Hodges, elected officials and many 
CEOs from the southeast who previously had a similar regional 
point of view about, you know, the fixation on the northeast. 
They are increasingly recognizing that there is value here.
    There is value to the nation if we deal with regional 
issues, and increasingly more and more regions are experiencing 
the kind of chaos in the travel marketplace. They are calling 
for better choices and better alternatives. It does not work 
everywhere and it will not work everywhere, but there are 
places where it is vital.
    In fact in your hearing last week, Mr. Chairman, somebody 
mentioned Essential Air Service, which is no longer the program 
it once was, I understand. However someone was suggesting it as 
a way to get around the aviation hub issue and recommended the 
government be involved in restoring the concept of essential 
air service to more rural communities in America.
    In a sense, in many ways it is what we do today under 
extraordinary fiscal pressure. Although we may not be serving 
your individual communities in Missouri, we do provide an 
essential service, but we are not explicitly compensated for it 
because there are many communities and parts of America that 
are served by our long distance transcontinental network who in 
a sense receive an essential service.
    We factor those costs into our basic plan. We try to hold 
it together. You know, if we are moving in the direction of 
essential service on the aviation side it is something we may 
want to consider as part of the national debate consider as a 
policy matter for America's intercity rail system as well.
    Mrs. Emerson. Well, let me say that, you know, I know a lot 
of people who would probably prefer to use rail service if it, 
first of all, was there and it was an option, which it is not 
in most all of our communities.
    Certainly even just making the St. Louis-Kansas City route 
by train, I mean, that is obviously a very good opportunity, 
particularly in a high speed mode, because I do not recall that 
I have ever had a plane ride between the two that is either on 
time or has not been canceled, so that is a potential source of 
some revenue for you, but it is a tough question.
    I do not like to pit urban against rural because the fact 
is that we really share many similar challenges, and 
infrastructure is definitely one of the challenges that we 
face, and anything we can do to improve it would be a help. I 
do appreciate your answer. I am not sure how to sell that, but 
I am going to do my best.
    Let me ask you. Are you working with any other surface 
transportation providers to try to develop any kind of an 
intermodal surface transportation that could help benefit our 
rural communities where, you know, you might work with a bus 
service that hooks then up to your train service because we 
have so many folks who they cannot even get to the hospital in 
many instances in St. Louis.
    I talked to a constituent the other day who said, you know, 
can you help me figure out how to get this woman up to the VA 
hospital in St. Louis. I mean, some sort of an intermodal 
surface transportation system would be very helpful as well.
    Mr. Warrington. The concept of intermodalism is contained 
in, you know, the legislation.
    Mrs. Emerson. Right.
    Mr. Warrington. As a practical matter, I firmly believe 
that it is more of a cliche than anything else. As a practical 
matter, the system does not work like a system in this country. 
You have to go to Europe to find planning and investment being 
well coordinated in a way so that the transportation system 
behaves like a transportation system.
    America's transportation system does not behave like a 
system at all. Everybody is in their short term, competitive 
boxes within the airline business, within the railroad 
business, within the bus business and then amongst each other. 
I think it takes statesmanship and leadership by folks who 
manage those businesses to recognize that there is a purpose 
here that better serves customers, and it has to do with 
working together to plan and invest together to provide 
seamless opportunities to customers.
    I will tell you that one of the hallmarks of my leadership 
at Amtrak is breaking down those insular barriers and 
recognizing with my colleagues in the transportation business 
that it is better for the customer and it is better for us if 
we figure out ways to serve them better together. We can all 
save some money together.
    I think we have done that very successfully with Craig 
Lynch at Greyhound. He and I are very good business partners. 
We find extraordinary opportunities to work together and save 
costs together, to use the bus system as a feeder. Ten years 
ago we were at war with one another.
    As I mentioned, we are finding ways to work with the 
freight railroads so that we can provide a premium niche 
service in the movement of mail or refrigerated express service 
on the tail end of our trains to better serve intermodal 
shippers. We will share the revenues, and we will not compete.
    Probably the most significant example occurs with 
Continental Airlines. This is something Greg Brenneman and I 
have worked very hard on to change the culture of our 
organizations. In Newark, New Jersey, for example, which is 
Continental's hub, they fly a lot of short distance as they 
call them eggbeaters from 200 or 250 miles into Newark Airport 
and then, move on to higher yielding, longer distance trips.
    We have had lots of discussions about opportunities with 
our newly-launched high speed rail service to, in effect, 
substitute as a feeder. There is under construction a brand new 
station in Newark and within the year a monorail connection 
right to the air side of the terminal with baggage handling 
will start. We have opportunities there with Continental.
    We have opportunities at BWI in Baltimore to basically be 
the feeder with good quality, frequent high speed service 
literally right to the airport. It makes money for us, saves 
money for the airlines and as a practical matter frees up gate 
capacity for longer distance flights.
    Twenty percent, generally, 20 percent of the gate capacity 
that is consumed on a daily basis at our nation's major 
airports is devoted to relatively short distance trips. You 
know, 800,000 pound 737s were not designed to go up and come 
down in 45 minutes. I am not going to get in the middle of the 
airline thing, but, you know, there is a role for Amtrak here.
    In fact, Mr. Olver mentioned this in the hearing last 
Thursday. There is a role here on certain corridors to off load 
short distance air trips to quality high speed rail passenger 
service, and there are corridors all around this country where 
that is an opportunity. In the end, it probably improves the 
economics of air carriers as well and certainly helps our own 
revenue position.
    My point is that there are lots of ways for us all to work 
better together, plan together, and invest together, which in 
the end serves customers better. This is what it is all about; 
building loyalty and letting them know that we are not fighting 
with one another, but figuring out ways to better serve them.
    Mrs. Emerson. Thanks. I appreciate your answers.
    I probably have run over my time, Mr. Chairman. Thank you, 
Mr. Warrington.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Rogers. Thank you, Mrs. Emerson.
    Mr. Olver?
    Mr. Olver. Mr. Chairman, can you move on? I would like to 
be refreshed on where you have already been before I start.


                      operational self sufficiency


    Mr. Rogers. Sure. Ms. Kilpatrick would appreciate that.
    Ms. Kilpatrick. Thank you, Mr. Chairman and Mr. Olver. I 
very much appreciate it. We have had a lot of discussion this 
morning, and I am trying to cover three ten o'clock hearings at 
the same time, so forgive me if some of this has already been 
asked.
    It has been said earlier both by the IG and GAO that you 
are not going to make it. I think we feel as a committee that 
you are not going to make it. In the most positive terms we 
support you and want you to make it.
    In 1971, when Amtrak came into existence, and right up 
until reauthorization and again the last bill in 1996, this 
country I do not think has ever decided that yes, we want to 
have this, and, yes, we are going to invest in it like other 
countries have done that in Europe and otherwise. They have a 
different need. They have a different configuration. Some of 
them have been successful because in many instances they 
receive more public support, as well as other things.
    Mr. Warrington, and I did not hear you clearly say, and I 
know you have every expectation that you are going to make it 
by December 2002, which is 18 months or so away. Is that 
realistic?
    Mr. Warrington. As I said to the Chairman, I am not going 
to guarantee it. I cannot guarantee anything in this life. I 
have learned that after 48 years. You know, who would have 
predicted that it would take two months to figure out who the 
President was, and we would be out of electricity in 
California?
    Ms. Kilpatrick. But you have to be better than that.
    Mr. Warrington. Yes.
    Ms. Kilpatrick. You have to be better than both of those.
    Mr. Warrington. I cannot guarantee it because I am not 
foolish, all right, but I----
    Ms. Kilpatrick. Let me go with what the IG said. He said 
you need to do three things in order to reach it, if you reach 
it, and all of those are very technical. If they are real, they 
are going to be awfully hard to get to.
    I think the easiest of the three might be to curb expenses. 
I am not sure if you went over that. Do you have a plan to curb 
expenses?
    Mr. Warrington. Yes. Absolutely. Very much so. In fact, I 
referenced that earlier.
    You know, frankly, one of the difficulties we have had is 
that with our capital program, and I will mention this because 
it is a real world issue that we deal with every day. Our 
capital program this year is one-half of what it was last year 
because the Taxpayer Relief Act funds are basically spent down, 
and we are out of capital at the end of this year. We have had 
to have the size of our capital program this year from last 
year's $837 million, mostly funded through Taxpayer Relief Act 
money, to $476 million.
    One of the consequences of that is that there are capital 
related overhead costs, for example, in our shops. We have a 
big shop in Beech Grove, Indiana. We have shops in Bear, 
Delaware, and Wilmington, Delaware. In those shops there are 
capital intensive overhaul programs, locomotives, electric 
locomotives, cars, major remanufacturing and overhauls.
    When you do not have the capital to invest in those cars 
and you have to cut back your production line significantly, 
which, unfortunately, is what we have had to do, there are 
still overhead costs associated with that program. For 
instance, you still need lights in that shop. Even if you are 
doing half the cars you were doing before, you still need 
lights, and you still need all the basics. Those costs, which 
we can no longer charge off to our capital program, spill back 
to our operating budget.
    As a matter of fact, one of the consequences of having the 
capital program this year from last year is I have had to eat 
as part of this year's budget, not originally a part of my plan 
$40 million of costs.
    Number two, effective July 1 of this coming year the 
Federal Railroad Administration will introduce and has put us 
on notice that all railroads are subject to a new requirement 
called the Code of Federal Regulations CFR 238, which requires 
that every piece of equipment receive a certain kind of 
inspection and maintenance practice on a precise, non-
negotiable 120 day cycle. It is for the entire fleet.
    Ms. Kilpatrick. Let me stop you right there because that is 
the point I think I am getting to.
    Mr. Warrington. Okay.
    Ms. Kilpatrick. Your older fleet, and now you have a new 
reg coming in that is going to cause you to update to spend 
more money.
    If you do not get the bonds, with those ever increasing 
mandated costs that you are about to assume is there another 
plan in place? What will you do? The bond that you are 
proposing has a long way to go. You are incurring additional 
costs because of the older fleet, because of the new reg that 
you just mentioned. How are you going to sustain yourself?
    Mr. Warrington. We will muddle through as we have muddled 
through for 30 years, and we will continue to get abused for 
trying to hold it together and trying to do it on sort of a 
shoestring.
    Ms. Kilpatrick. Who abuses you? It would not be your 
Congressmen. We are your partners.
    Mr. Rogers. That was your innermost thought.
    Ms. Kilpatrick. Thank you, Mr. Chairman. Yes.
    Mr. Warrington. You know, all I can tell you is that we 
will try to hold it together, and we will not really be as 
competitive as we can be.
    What would be almost a crime is to have all come apart 
while there is this incredible interest in rail service in 
America. We will not be able to effectively fulfill that need 
and make a difference in people's lives and in economies and 
cities. Without the right level of capital investment.
    Ms. Kilpatrick. All right. Save the editorial. Save that.
    Mr. Warrington. All right.
    Ms. Kilpatrick. You are going to need it.
    Mr. Mead, as well as Ms. Scheinberg, and thank you, Ms. 
Scheinberg, for your graphics on page 3 and 4 because it helps 
for me to put it in context where the lines are and how they 
interact. I appreciate that.
    Your comment on that? I do not know if you knew about that 
new reg that Mr. Warrington just----
    Ms. Scheinberg. Yes. I would like to comment because the 
inspection that Mr. Warrington is talking about, the FRA 
inspections, these are costs of doing business. These are 
operating costs. These are not capital costs. When you have to 
inspect, when you have to keep the lights on at Beach Grove, 
those are operating costs, and those costs have gone up more 
than the cost of inflation for Amtrak. Those are really a 
challenge.
    You are absolutely right. Reducing those costs is a huge 
burden, and I just do not see how it can be done. You cannot 
keep coming back and squeezing and squeezing and squeezing. You 
are not going to have anything left. I think that this problem 
cannot be solved. I do not think that the current system that 
Amtrak has with the 40 routes going to 45 states can be 
operationally self-sufficient.
    This goes back to the Chairman's question about whether 
Amtrak originally was set up to fail. The reason Amtrak was set 
up was because the freight railroads could not pay for the cost 
of the passenger system, and I do think that requiring self-
sufficiency has required Amtrak to become more entrepreneurial. 
It has made major efforts.
    They are doing a very, you know, introspective look at how 
to reduce costs, but I do not think you can get there from here 
for these very reasons that we are discussing.
    Mr. Mead. You know, I think also that Amtrak's management 
is one that I have been fairly impressed with. I think they are 
dedicated to the task. I think Congress put them on the right 
road when they passed the last three authorizations.
    But, let us face it. On midnight December 2, 2002, if 
Amtrak is off its self-sufficiency mark by $400 million or $500 
million, that is quite different, in my judgement, from being 
off by $50 million or $75 million on the operating self-
sufficiency test. I believe that those circumstances ought to 
be weighed in whether or not December 2, 2002, some bell ought 
to ring, and if they have not met it by any amount that it 
would be appropriate, I think, to revisit just where they are 
at that time.
    Secondly, if the capital situation at least for the current 
system is not addressed I do not think Amtrak is going to make 
the self-sufficiency goal, and that is why the appropriation 
this year is fairly important when you are talking about the 
100 percent score rate on $521 million being better than if you 
gave Amtrak $955 million at the normal score rate of 40 
percent.
    They prefer the $521 million at the 100 percent score rate 
because they add on to that several hundred million from last 
year that was subject to the 40 percent score rate that this 
next year they will be able to spend, which puts them in the 
neighborhood of $800 million or $900 million, but that capital 
situation is one that Congress, frankly, does have to come to 
grips with.
    Ms. Kilpatrick. Thank you.
    Thank you, Mr. Chairman.
    Mr. Rogers. Mr. Sweeney? You have been here the longest.
    Mr. Sweeney. Thank you, Mr. Chairman. I want to thank the 
panelists. I am one of the Members from the northeast and 
recognize that this national debate has particular impact on 
the regions that I represent.
    Contextually, given the statements of my colleagues, what 
we recognize especially, Mr. Warrington, is that you have very 
limited service in terms of geography, and the challenge is 
always to justify the expenditures and so the three questions 
are is there enough potential here for the rest of the nation 
to want to continue forward, can somebody bring a cogent and 
understandable vision of that to the American people, how 
realistic is it, how much time is it going to take, how does it 
affect people, and what is its ultimate cost?
    It seems, boiling it down to the more of the moment kind of 
questions, the question of high speed rail is dependent on what 
happens in terms of, as Mr. Mead has talked about directly and 
just alluded to, your need to rob Peter to pay Paul in order to 
try to make that high speed rail prospect anything close to a 
prospect.
    Given the current numbers, the current circumstances, the 
current proposals you have alluded to, and I know Ms. 
Kilpatrick I think tried to get you to be more direct, so I 
will ask it again. What is your plan for the next year?
    High speed rail is where you have the best opportunity to 
make some money. Given the current proposals in terms of 
numbers, what is your plan?
    Mr. Warrington. The plan is fundamentally premised on $521 
million scored at 100 percent. It starts there.
    At the same time, we have a detailed plan internally around 
cost reduction and revenue enhancement this year and next year, 
it requires everything to work and everything to work well, and 
there are things that I do not have complete control over, but 
only if we get a few breaks. If we get a few breaks and we stay 
focused, we can do it.
    I can share with the committee and I would like to share 
with you all of those revenue and expense programs that we have 
and what they are worth on an annualized basis.
    Mr. Sweeney. Okay. I would ask that we do that as a 
continuum of this debate----
    Mr. Warrington. Right.
    Mr. Sweeney [continuing]. In an effort to project it. I 
have a couple of other questions, and we have a vote.
    The first is as it relates to the equity of shared costs 
between the freight carriers and Amtrak. In prior years you 
have testified that the northeast corridor needed I think $12 
billion worth of upgrades. Amtrak was going to pay half of them 
despite the fact that Amtrak's use was somewhere in the range 
of about 20 percent.
    What is the status of negotiations with those freight 
carriers? What is the likelihood that there can be a greater 
equity in those costs, and is that not a place where you could 
solve some of your cash flow problems?
    Mr. Warrington. Yes. Actually, on the northeast corridor we 
did do what is called a south end plan looking at the railroad 
from New York to Washington. It summarized about a $12 billion 
need over 20 or 25 years, and about half of those dollars were 
related to Amtrak related improvements, and half of those 
dollars related to improvements that would benefit not freight, 
but commuter operators on the northeast corridor, Long Island 
Railroad, New Jersey Transit, Maryland, Philadelphia, Virginia 
commuter services.
    Actually, that is based upon our historical level of effort 
by the commuter agencies and ourselves where over the last 
three years we have developed 50/50 partnerships with states 
like New York. Joe Boardman, New York's DOT commissioner and 
I----
    Mr. Sweeney. Right.
    Mr. Warrington [continuing]. Did a terrific $185 million 
50/50 deal for the Empire line, which is great. We have a 
terrific business relationship there.
    We have similar 50/50 capital contribution relationships 
with every state on the northeast corridor. Frankly, it is one 
of those ways that we have been able to get capital that we did 
not have access to other than through this annual 
appropriations process.
    Mr. Sweeney. I would ask that where especially as it 
relates to the private freight carriers, my constituents view 
it as a subsidy to those private carriers in many respects at a 
time when you are very strapped and expanding your services. I 
would ask that you think of ways we can be more helpful in your 
efforts.
    The final question relates to the East River Tunnel, which 
is a choke point----
    Mr. Warrington. Yes.
    Mr. Sweeney [continuing]. To the northeast and throughout 
that corridor.


                              penn station


    Last year, Mr. Mead's office issued a report saying the 
tunnels into Penn Station are a safety hazard. These tunnels 
are federally owned, as you know, and, therefore, the 
responsibility of us I guess to repair and upgrade.
    What is the status of those upgrades? Mr. Mead, maybe you 
could also counsel.
    Mr. Rogers. We will need to do that quickly because we have 
a vote on the Floor.
    Mr. Warrington. It is about a $900 million program. It has 
been a requirement for about 20 years at least and has to do 
with ventilation and evacuation of both the North River and 
East River tunnels into Penn Station, New York.
    We have spent $161 million, together with the Long Island 
Railroad, to date. We have an accelerated program that can do 
most of that work in the next, I believe it is, Ken, five or 
six years to squeeze it, and it is simply a matter of money.
    I will tell you. With the High Speed Rail Investment Act, 
about a third of that money would go directly to the northeast 
corridor and in particular the south end, and the first place 
it will go in partnership probably on a 50/50 deal, not an 80/
20 deal, to the ventilation and evacuation systems in Penn 
Station, New York, Mr. Sweeney.
    Mr. Mead. Under funded in this year's budget. I would 
recommend the committee consider earmarking it at about the $25 
million to $29 million mark.
    Mr. Sweeney. What kind of an imminent threat does it 
present?
    Mr. Mead. I certainly would not counsel shutting down the 
tunnels or anything like that, but I think as in aviation we 
have a concept in aviation called the margin of safety. We get 
very concerned in aviation and other modes when you start 
pealing away different margins of safety. I think that this 
situation is analogous to that.
    Mr. Rogers. We have three minutes left----
    Mr. Sweeney. Thank you.
    Mr. Rogers [continuing]. On a vote on the Floor. We will 
take a recess. There are four votes on the floor, so we will 
resume momentarily.
    [Recess.]


                   northeast corridor high speed rail


    Mr. Rogers. The committee will be in order.
    Mr. Olver, do you have questions?
    Mr. Olver. If I can find my notes again, Mr. Chairman. 
Thank you.
    I know that there has been some discussion of the northeast 
corridor. One of the things that happened recently was that 
there was a fairly long article, and it was either in the Post 
or the Times, showing what the times were, the hours of time 
were, in getting from Washington to New York I think was the 
comparison, driving and rail and air. Now, that was from 
downtown, which is not exactly where everybody, but there are 
some people that go to downtown and coming in at City Hall I 
guess it was in the two cases.
    In that corridor, which is on the order of 300 miles or 
less, the time for air and for rail, for the new high speed 
rail, was within ten minutes or so of each other, whereas 
driving was considerably longer.
    What is the situation of a similar sort from New York to 
Boston now? Is that moving as fast as the section from New York 
to Washington, or is that still in an incomplete state?
    Mr. Warrington. Actually, we travel faster. You know, the 
overall average speed is higher, but the distance is longer.
    The actual travel time that we run on between New York and 
Boston is constrained in part because of the condition of the 
infrastructure between New York and New Haven, Mr. Olver, which 
is owned by Metro North Railroad and has with New York state 
and the State of Connecticut one small piece of the northeast 
corridor that we do not own. Our top speed is constrained there 
to 90 miles an hour, so we are not running at the optimum 
speed.
    Mr. Olver. What is the constraint there?
    Mr. Warrington. It is about 90 miles an hour.
    Mr. Olver. And why?
    Mr. Warrington. Because that section of the railroad is not 
owned by Amtrak, and it is operated for the State of 
Connecticut and the State of New York by the New York MTA Metro 
North Railroad. It is a commuter operation.
    It did not receive the same level of investment that we put 
into the section of railroad between New Haven and Boston where 
we do achieve speeds of up to 150 miles an hour principally 
through Rhode Island.
    The actual travel time between New York and Boston is about 
three hours and 15 minutes.
    Mr. Olver. Is there a plan to get that section to New Haven 
fully upgraded, and how much time would that save?
    Mr. Warrington. We do have incremental plans with the Metro 
North Railroad and the MTA. There is some cost sharing there. 
Once again, it is a matter of money.
    We will pick up, and I cannot tell you off the top of my 
head, a number of minutes over the next two to three years on 
the run between New York and New Haven. We will also pick up 
incremental minutes between New Haven and Boston over the next 
year or so as well as we wrap up some of our investments up 
there.
    I think we can be in a position to be running between New 
York and Boston in the next one to two years, I believe, and I 
have to check the schedule, in about three hours and five 
minutes to three hours and eight minutes. I think we will be 
capable of doing that.
    Ultimately, once again with more money, particularly on 
what is called the Hellgate, which is the section from 
Sunnyside Yard Queens up to New Rochelle, which is our 
territory, with more money invested there as well we should be 
in a position to get that railroad to three hours.
    Mr. Olver. Is the northeast corridor from Washington to 
Boston now profitable if you take all costs on the one side of 
the ledger and your revenues on the other side?
    Mr. Warrington. On a fully allocated basis if you include 
depreciation in a conventional sense, no; with excess railroad 
retirement, no. If you exclude those costs, we are very close.
    Mr. Olver. Is that the line that is closest to profit?
    Mr. Warrington. Yes.
    Mr. Olver. To breaking even?
    Mr. Warrington. Yes.
    Mr. Olver. In making it fully high speed consistent, let us 
say, and getting that other section up so that this is a 
conventional high speed rail obviously, and I do not know what 
the next stage of additional speed might gain in that corridor, 
but in making it so is the additional revenue that you might 
see from additional passengers, is it your belief that that 
does begin to break even on a fully allocated basis?
    Mr. Warrington. On the northeast corridor, yes, but I will 
not include in that depreciation.
    Mr. Olver. You cannot include deprecation?
    Mr. Warrington. I would not go quite that far. Some day 
perhaps, but right now I do not see that.
    Mr. Olver. I am not sure that anywhere in public 
infrastructure we really take into account the total of 
deprecation so that does not really surprise me much, but if 
that is the most profitable, the closest to a break even of the 
line, then where are the other places in this system since we 
keep being told that this is the year where you were supposed 
to become self-sufficient?
    How is it possible to become self-sufficient when that is 
the case on the best of the lines and the one that has the 
greatest potential traffic, it seems to me; how it is possible 
ever? I think we all should have understood that it was not 
possible in a rail system to be able to make it be totally 
self-sufficient and have any rail system left----
    Mr. Warrington. Right.
    Mr. Olver [continuing]. If one wished to have a rail 
system.
    What others are close to that? Could you just identify a 
few of the other runs that come close to the level of possibly 
breaking even, as is true in the northeast corridor.
    Mr. Warrington. Let me start with the northeast corridor 
because our Metroliner service is, on a fully allocated basis, 
profitable.
    Mr. Olver. Now, which is that?
    Mr. Warrington. New York to Washington. Washington-New 
York.
    Mr. Olver. That is on a fully allocated profit?
    Mr. Warrington. That business line on a fully allocated 
basis is actually profitable.
    Mr. Olver. So it is the New York to Boston then that is 
still below?
    Mr. Warrington. That is not, yes.
    Mr. Olver. But this one the Metroliner is fully----
    Mr. Warrington. Yes. That segment of the business is 
profitable on a fully allocated basis.
    Mr. Olver. Even with depreciation or not, or is that left 
out of that one as well?
    Mr. Warrington. I know it is without depreciation, and even 
with depreciation, which in that case would be equipment 
depreciation, we may be close. I would have to check that.


                       high speed rail corridors


    Mr. Olver. Can you just identify two or three other 
segments that are somewhere close to the level of breaking even 
as the one Washington to New York is already----
    Mr. Warrington. Yes.
    Mr. Olver [continuing]. And with the others the full of it 
close?
    Mr. Warrington. Yes. I would say the trains that jump out 
that come closest are Pacific northwest trains in the Cascades 
corridor.
    Mr. Olver. Which is?
    Mr. Warrington. Seattle. Portland-Seattle-Vancouver.
    Mr. Olver. And Vancouver, yes.
    Mr. Warrington. We have several corridors in California 
which are very good performers and have seen a lot of recent 
growth. Our Florida trains, our auto train, our Crescent, the 
Carolinian off the top of my head are trains that are good 
performers.
    In the Chicago hub, some of our shorter distance trains are 
good performers, and we also run 18 routes that are state 
supported trains. Ms. Emerson this morning was talking about 
Missouri. The State of Missouri pays us about $6 million a year 
for running several trains between Chicago and St. Louis.
    Mr. Olver, the detailed list on a train by train basis can 
be reviewed on The Route Profitability System Chart contained 
in our FY 2002 Grant Request.
    Mr. Olver. Are all of those that you mentioned as being 
close, are all of those ones that have been designated as high 
speed rail corridors for consideration?
    Mr. Warrington. All of them travel over corridors or pieces 
of corridors that have been designated.
    Mr. Olver. I am looking at the material that Ms. Scheinberg 
had given us which goes into the whole route structure, but 
also the high speed rail corridors.
    I would expect what essentially seems common to me is that 
these are relatively short runs with a fairly high population 
metro area or three or four of them that are connected from 
Vancouver-Seattle-Tacoma-Portland. At least that portion of 
it----
    Mr. Warrington. Yes.
    Mr. Olver [continuing]. Is, while the population there is 
so much less than in the northeast corridor. California's are 
certainly between the big northern and southern metropolitan 
area.
    I notice in Ms. Scheinberg's testimony that the cost for 
the upgrading to high speed rail in the northwest corridor, the 
Seattle corridor, I think I calculated $35 million a mile for 
upgrading to high speed rail. There was the suggestion of $25 
billion for 700 miles.
    No. That was in California. Which one was it? Was that the 
northern one?
    Ms. Scheinberg. That was California.
    Mr. Olver. Okay. The California one that I am mixing up 
with the northern one.
    Is that a typical set of numbers? Is that about what you 
would expect to upgrade to high speed rail anywhere in the 
system?
    Mr. Warrington. We did an analysis not too long ago of what 
the relative costs and capacity is of an incremental lane of 
interstate highway versus an incremental track mile. Generally, 
to use the northeast corridor as an example, a lane mile of I-
95 in Connecticut, now the precise number will vary exactly 
where that mile is and the extent to which structures are 
involved, but generally in 1996 dollars the cost of a lane mile 
on I-95 in Connecticut was about $50 million a lane mile.
    If you go a stone's throw away over to the northeast 
corridor, you can add a third track signal for 125 miles an 
hour on an existing right-of-way that is not disruptive 
environmentally or to any community standards, and you can 
build that track signal for 125 and electrified for a range of 
$8 million to $10 million or $11 million for a track mile.
    Mr. Olver. For a track mile?
    Mr. Warrington. For a track mile.
    Mr. Olver. And you are saying that for Interstate 95 it is 
$50, five zero, million per lane mile?
    Mr. Warrington. In that particular case, $50 million versus 
$8 million to $11 million.
    Mr. Olver. Well, that is a very provocative set of numbers. 
I have not seen that kind of thing laid out in various places, 
nor have we had anybody from the other side say what is not 
included or whatever, you know, a kind of an audit, a real 
balance sheet of----
    Mr. Warrington. Yes.
    Mr. Olver [continuing]. The two sources situation, but with 
the sets of numbers you have just given it is a dramatic case 
for the high speed rail in these heavily used corridors, it 
seems to me.
    How many trains are there going north and south in the 
Metroliner today?
    Mr. Warrington. On Metroliner we run 15 in each direction 
or 30 a day.
    Mr. Olver. Thirty a day?
    Mr. Warrington. Yes.
    Mr. Olver. Okay. How many are being run in a line like 
Chicago to L.A. or Chicago to Seattle, the ones from the 
Chicago hub area across the rest of the country?
    Mr. Warrington. Typically one a day in each direction.
    Mr. Olver. One a day in each direction. So in essence, the 
purposes of these are not to carry a lot of people at all. They 
are really to provide an alternative way of travel for people 
who may want tourism mostly, people who want to travel across 
the country and have the experience of traveling across the 
country. Could those ever be profitable?
    Mr. Warrington. Probably not.
    Mr. Olver. Under any circumstances that you could see in 
terms of coverage? There is no major metropolitan area going 
from one to the other along the way once you get--well, there 
are metropolitan areas, but I am not even sure that those lines 
go through them.
    Mr. Warrington. I think there are segments that are and 
could be, but I think overall that network is not a profitable 
network and will never be a profitable network.
    As I said before you joined, Mr. Olver, if you go back to 
the old days of the private railroads running passenger trains 
like the Pennsylvania Railroad, even passenger trains in those 
days that were considered profitable were only profitable 
because of an extraordinary volume of mail business on the tail 
end of those trains.
    We are trying to recreate some of that, but they are not 
going to be the difference between losing a lot of money and 
being profitable in a commercial sense.
    Mr. Olver. Okay. The rail system you have commented about 
well, maybe the High Speed Rail Investment Act with $12 
billion, which, you know, if the real number for doing the 
California system is $25 billion for that 703 miles, you would 
not get a lot done out of one $12 billion. That is really a 
drop in the bucket if you route a serious effort to try to get 
from major metropolitan areas to others with a high speed rail 
in places where it might work.
    I think your implication is from what you have said that 
the California corridor, the northwest corridor and some others 
could break even short of depreciation essentially. Maybe I am 
inferring here if you had the investment to make them high 
speed that they could come close to breaking even.
    Mr. Warrington. Either they will break even, or states and 
governments will be interested in offsetting whatever the costs 
might be. We would work together with them on the long-term 
plan for both capital investment, as well as any operating 
support that might be necessary.
    You know, I will give you a good example. In the State of 
Florida you have a 40 percent growth in population envisioned 
over the next ten years creating serious, serious problems in 
terms of transportation mobility. Clearly a high speed service 
between Tampa and Orlando and between West Palm and Miami is 
the right thing to do.
    Mr. Olver. But why does that not connect between Orlando 
and Jacksonville, making a complete system down the east coast 
among the high speed corridors?
    Mr. Warrington. It would ultimately. It would ultimately, 
and the vision is to really have an Atlantic coast corridor 
that extends from Washington to Richmond to Raleigh, Charlotte, 
Atlanta, and on to Jacksonville, but you cannot do it all 
overnight.
    The pace with which we would spend that money and invest 
those dollars is in part going to be driven by the states and 
regions not by Amtrak. This it not a program for Amtrak. This 
is a program for states and regions, and there needs to be a 
willingness to contribute.
    Phyllis said that it is an 80/20 program. It is a minimum 
20 percent program for states and I would envision places where 
the contribution would be more than that. The criteria we will 
use will be weighted around the amount of local or private 
contribution that would match the federal share here. It does 
not have to be an 80/20 program. A 20 percent match is the 
minimum.
    There are places like Florida, which are a classic case, of 
taking the long distance network, building incrementally the 
current corridor between Washington, D.C., Jacksonville and 
Miami. It benefits our existing services like the auto train 
and our Silver Service where we run three trips a day in each 
direction to Florida, and at the same time it will connect to a 
local high speed corridor set of services between Tampa and 
Orlando and West Palm and Miami. The pace and the amount of 
money which we invest is in large measure going to be driven by 
the degree of local interest in making this happen.
    I had a terrific meeting with Governor Bush three weeks ago 
in Tallahassee. The State of Florida has a constitutional 
amendment which requires them to begin an incremental high 
speed program that runs at least 120 miles an hour by 2003. 
Given the market forecasts and the research that we have done, 
it is an ideal location for just that kind of service.
    With the High Speed Rail Investment Act, we could begin to 
build that service in partnership with the states on two 
rights-of-way that are already publicly owned, the I-4 corridor 
between Tampa and Orlando and the publicly owned corridor that 
Tri-Rail runs on between West Palm and Miami.
    It is a perfect situation where we can improve our long 
distance train network to Florida and connect them to high 
speed services that are connecting the critical population 
centers within the State of Florida.
    Mr. Olver. Okay. That makes very good sense. There are some 
other pieces of corridor in looking at this. Major populations 
and major industrial areas are certainly covered in a long line 
that goes from Atlanta up to Washington or from New Orleans or 
even Houston, that line that maybe makes some sense.
    I am trying to look for those places that have something 
like the characteristics of the northeast corridor, although 
the population in the northeast corridor is still substantially 
higher. Over time that may not necessarily in all cases be the 
case.
    Then I look at it and I did not even know we had an Amtrak 
running from Boston directly to Montreal. Do we?
    Mr. Warrington. We do not today.
    Mr. Olver. We do not. Who has conceived of there being a 
market for a high speed rail there or even Amtrak?
    Mr. Warrington. I have not.
    Mr. Olver. Yes. Okay. I guess it must have been out of this 
committee.
    Mr. Rogers. Mr. Olver, we are running short of time. I want 
to get us to a conclusion. If you could begin to wrap up, I 
would appreciate it.
    Mr. Olver. Okay. All right. I will try to do that.
    I do not know everything that went into the designation of 
these corridors, but I see the major New York corridor as 
Albany and Buffalo, and then there is no connection. There is 
no cohesion to this high speed rail link, either a connection 
from Pittsburgh to Cleveland or from Buffalo to Cleveland or 
from Buffalo across to Detroit or something like that.
    There are some pieces of those that really do begin to look 
a little bit like the places where you have said you could come 
close to breaking even. On the other hand, I am not opposed to 
keeping going a system that has one train a day for the sake of 
the overall system, but we have to recognize that it is never 
going to be profitable. It is there for having a system.
    We ought to be honest about that and try to put our 
investments in the places where we can have a significant 
impact upon the air traffic with metropolitan areas that are in 
the same range of distances of 100 or 200 miles or 300 miles 
apart. In the New York to Boston corridor you have at least 25 
million people in the major metropolitan areas that are 
included there.
    I guess I have said enough. Whether you will allow anybody 
on that panel to respond in some kind of a way, that is up to 
you.

             RESTRUCTURED NATIONAL INTERCITY PASSENGER RAIL

    Mr. Rogers. I thank you, Mr. Olver, for the very thoughtful 
questions.
    We need to get the panel out of here. It is 12:45, and we 
have other hearings coming up at 2:00.
    Let me pose this question. If I understand correctly, Mr. 
Warrington, you only have one or two segments that make a 
profit at the moment. The Washington-New York segment. Is there 
another?
    Mr. Warrington. No, not on a stand alone basis.
    Mr. Rogers. All the other segments are losing money and, 
therefore, are not self-sufficient. I am wondering whether Ms. 
Scheinberg's conclusion about your inability to make the 
deadline is coming more to the forefront.
    If you do not make it, if you cannot make the deadline of 
self-sufficiency by 2003, the Act of Congress requires that the 
railroad submit to the Congress a liquidation plan and that the 
Council submit to the Congress a plan for a restructured 
national intercity passenger rail system.
    Are we looking at a time when we look at the Amtrak's 
national plan or routes and say we are going to have to forego 
this route. We cannot afford that route. We have to begin to 
refocus on the most traveled routes. Is that where we are 
headed?
    Mr. Mead?
    Mr. Mead. Yes, you could very well be. At the same time, 
because none of the routes or only one of the routes is really 
break even, those other routes that you decide to keep you are 
going to end up subsidizing them anyway. I think that is 
probably pretty important to keep in mind.
    You know, there have been in the past proposals to have 
something akin to a base closure commission. It never became 
law, but that is probably what you may end up facing.
    Mr. Rogers. Is that not what we did, the Congress, in 1997? 
After that five year period of time, we prohibit Amtrak from 
using federal dollars to operate the Amtrak system. Is that not 
what we said.
    Then we also said if they do not become self-sufficient 
recommend to us an intercity passenger rail system that we can 
afford. Is that not what we said? Is that not a base closing 
commission type of order that the Congress put forth in 1997?
    Mr. Mead. Well, in effect except it is not clear whether 
the criteria for the rest of the system has to be one where it 
breaks even or not.
    In other words, could you come up with one that says well, 
we are going to X out the Pacific northwest route because we do 
not think that that is popular enough. It is used basically by 
tourists. Somebody makes a judgement that we are not going to 
use that one, but we will keep the Washington to Chicago run 
because that has more popularity.
    Mr. Rogers. Well, I mean, that is what we are expecting 
Amtrak and the council that we created to recommend to us in 
2003, I assume, if Amtrak does not make their deadline, so I 
guess we will be faced with that question at that time. I do 
not think we have prejudged that, have we, in the law?
    Mr. Mead. No. I do not think the law prejudges that.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                       ALTERNATIVE TRANSPORTATION

    Mr. Rogers. Much was made earlier in the hearing about the 
fact that Amtrak is taking a lot of air travelers and a lot of 
automobile travelers off the roads and the skies and what would 
we do if we suddenly had all those people back on the roads and 
in the skies. Is that a major problem?
    Mr. Mead. In the northeast corridor a case could be made 
along those lines.
    Mr. Rogers. Ms. Scheinberg, do you agree with that?
    Ms. Scheinberg. I agree that the northeast corridor makes a 
lot of sense for that reason and for other reasons, but outside 
the corridor I do not think that anybody is going to take 
Amtrak from Washington to California or from Chicago to Seattle 
if they need to get there quickly. If they need to get there 
quickly, in any reasonable amount of time, they are not going 
to take Amtrak. It is not going to take airplanes out of the 
sky.
    Mr. Rogers. In your prepared statement you dealt with this 
to some degree.
    Ms. Scheinberg. Yes.
    Mr. Rogers. You say, ``At a national level . . . ,'' and I 
am quoting from page 8. ``The potential to relieve traffic 
congestion on highways and air travel at a national level. This 
potential is not likely to be realized because intercity 
passenger rail currently represents about three-tenths of one 
percent of intercity travel across all modes. Even if rail 
travel quadrupled, it would account for only about one percent 
of the nation's travelers.''
    Can we not accommodate that three-tenths of one percent 
increase in travel on airlines and roads and not be a problem?
    Ms. Scheinberg. I think we can accommodate it. I think it 
would be a little bit tight in the northeast, but elsewhere I 
do not think we would notice it.
    Mr. Rogers. You say on page 9----
    Ms. Scheinberg. Exactly.
    Mr. Rogers [continuing]. Quoting, ``For example, in 1995 we 
reported that each passenger train along the busy Los Angeles-
San Diego corridor kept about 129 cars off the highway, about 
2,240 cars each day.'' Do you know what the total volume of 
carson that stretch of road is?
    Ms. Scheinberg. I do know that it is about one percent. If 
you look at the I-5 freeway in southern California that goes 
between L.A. and San Diego, this is about one percent of the 
total number of cars.
    Clearly that one percent can be accommodated if the trains 
were not there, and this is one of Amtrak's busier routes that 
Mr. Warrington said had the potential of reaching and covering 
its costs. It is really only covering one percent of the 
travel.
    Mr. Warrington. Mr. Chairman, could I say a few words about 
this?
    Mr. Rogers. Please.
    Mr. Warrington. I think it is important to put this in 
context.
    Amtrak is often compared, as I think Phyllis has done, 
within the context of the aviation industry as an industry. In 
this country, there, in round numbers, are about 900 million 
domestic aviation trips a year. Twenty-one of the largest 
carriers carry about 900 million domestic trips a year.
    If you break out those 21 carriers and you do not juxtapose 
Amtrak against the entire aviation industry, but you put Amtrak 
within the context of individual carriers in this country which 
is what we are--we are an individual carrier--Amtrak ranks 
ninth out of the top 21 carriers in terms of the number of 
people who we carry. We are right behind TWA and right ahead of 
America West.
    In the next three years, as we develop high speed service, 
we will be bumping up on Continental Airlines, which is number 
seven.
    Mr. Rogers. Question.
    Mr. Warrington. Yes?
    Mr. Rogers. The New York-Washington connection is the only 
profitable line you have. If you took off of that passenger 
list all of the people that travel to Washington to lobby us to 
keep the line open, would it still be profitable?
    Mr. Warrington. I do not encourage them to do that. It is a 
free market, Mr. Chairman.
    Could I say one other thing also?
    Mr. Rogers. Yes.
    Mr. Warrington. This gets back to, you know, what makes a 
difference in terms of Amtrak's plan and putting these numbers 
within a context not only of the aviation business as an 
individual carrier, but also within the context of our own 
business plan.
    We often get criticized, and I sort of sensed this in 
Phyllis' remarks, that we only carry about one percent of the 
travel market in the country. We carry actually 1.2 percent of 
all the travel that goes on, air, rail and automobile. That 1.2 
percent of travel demand translated last year into $1.2 billion 
of revenue to Amtrak. Each tenth of a percent, if we were to 
move that 1.2 to 1.3, is worth $114 million a year in revenue 
to Amtrak's bottom line.
    The point is you do not have to move that needle much--it 
is literally fractions of a percentage point of market share--
to actually make a difference in Amtrak's bottom line. I would 
argue philosophically that rather than--well, let me put it 
this way.
    Looking forward, considering the congestion and chaos that 
Americans face with all of the projections about aviation and 
highway difficulties, achieving those kinds of numbers, one-
tenth, two-tenth, three-tenth or one percentage point of market 
share, in the kinds of corridors we are talking about here is 
the difference between being way behind the curve and being a 
successful business enterprise which could generate enough 
income if we do it right and we invest capital the right way to 
help us, to help us underwrite the cost of a national long 
distance network.
    I think the question of a national long distance network is 
in fact a public policy question that we have all avoided in 
this town for 30 years. I would welcome a discussion about what 
it is, whether we want to consider those services even if they 
are unprofitable, even if we work very hard to reduce their 
losses, which is what we are trying to do. What do we want? Do 
we want them or do we not want them? Are they essential or are 
they not?
    Mr. Rogers. You got it, and we are headed toward that 
discussion, I mean, next year. When we have this hearing next 
year, we are appropriating for 2003.
    Mr. Warrington. Yes.

                        FISCAL YEAR 2002 REQUEST

    Mr. Rogers. There cannot be appropriations unless the 
Congress has decided to waive the profitability of Amtrak past 
that date, so we are into the discussion, and it is going to 
take place. It is time we had that discussion.
    Now, I am puzzled. In your budget submission earlier on you 
had requested $955 million, all of it to be paid out in fiscal 
2002. Then the President's budget comes along with $521 
million, all of it in 2002, and you say that is fine. That is a 
difference of $434 million less than you asked us for in mid 
February.
    What if we said okay, you have $200 million? Are you going 
to say that is okay?
    Mr. Warrington. No. No. No.
    Mr. Rogers. Well, why did you come down so quickly almost 
half again?
    Mr. Warrington. We requested our authorized level. Frankly, 
we recognized that there are serious constraints and that the 
baseline number of $521 million would not only work for us, but 
it actually gives us a better capital program early in the 
fiscal year if it were scored at 100 percent because 
traditionally we have been scored at 40 percent at the 
beginning of the fiscal year, and we do not get the other 60 
percent until the first day of the next fiscal year.
    The way the numbers work is $955 million scored the old way 
or $521 million scored at 100 percent, and actually $521 scored 
at 100 percent gives us the opportunity for a better capital 
program than $955 million scored the old way.
    Mr. Mead. Mr. Chairman, I think I have seen what you are 
referring to. I think it is inconsistent. It is inconsistent 
because both literally speak to scoring at 100 percent.
    Mr. Rogers. That is correct.
    Mr. Mead. So it is $950 million or whatever the figure was 
scored at 100 percent is obviously more than $521 million 
scored at 100 percent. I think it is textually inconsistent.
    Mr. Rogers. Well, the request, as I think I pointed out, in 
February was for $955 million scored at 100 percent, and now 
the President's budget, which you have agreed to, is $521 
million scored at 100 percent.
    Mr. Warrington. Actually it was $955 million, but our 
assumption was, based upon the way that we have been 
traditionally scored, that the $955 million would have been 
scored at 40/60 percent, Mr. Chairman.

                 Fiscal Year 2002 Capital Grant Request

    Mr. Rogers. What impact would a $521 million appropriation have on 
your ability to reach operational self-sufficiency if the appropriation 
were held at the 40 percent outlay rate as has been customary in past 
years?
    [The information follows:]
    If Congress were to appropriate $521 million for FY02 at the 40% 
outlay rate, Amtrak would receive only $521 million in cash in FY02 
(60% of the FY01 appropriation plus 40% of the FY02 appropriation). The 
first $230 million of this cashflow would be used for excess RRTA 
obligations ($190 million) and operating expenses ($40 million), 
leaving only $291 million for Amtrak's entire capital program. Amtrak 
would first need to ensure that debt service payments of approximately 
$87 million are paid as well as approximately $30 million in mandatory 
capital programs for items such as environmental projects. This would 
leave an insufficient $184 million of funding to support the basic 
capital needs of the national network--this amount is not enough to 
support the minimum requirements for operational reliability on the 
Northeast Corridor and the minimum equipment progressive overhaul needs 
of the national fleet. No investments could be made in tunnel life/
safety, equipment overhauls, other infrastructure, technology, stations 
and facility needs. Trip times on all routes, including the new high-
speed service would be negatively impacted.
    The Administration's recommendation of $521 million at 100 percent 
reflects their view that the achievement of operational self-
sufficiency will have a much greater chance of being achieved if 
Congress were to enact this recommendation.

                         AMTRAK'S BUSINESS PLAN

    Mr. Rogers. Mr. Mead, in Amtrak's new business plan do you 
think it is well enough defined to believe that with some 
degree of confidence they could significantly reduce the $737 
million gap between what they are taking in and what they spend 
in the next two years?
    Mr. Mead. We just started reviewing that, but the short 
answer to your question is no. We think we need to sit down 
with Amtrak. We believe they have improved it, but we will 
still see around $400 million or $450 million where it is too 
imprecise for us to grasp what it is saying.
    Mr. Rogers. Perhaps we can ask Mr. Warrington while he is 
here. In your business plan, what percentage of the actions 
that you set forth, what percentage is based on firm, well 
defined plans compared to just general notions of areas to see 
savings?
    Mr. Warrington. I would say off the top of my head probably 
70 percent are firm.

                     TERMINAL AND MECHANICAL COSTS

    Mr. Rogers. How will you reduce mechanical and terminal 
costs by $25 million per year when your labor costs are fixed 
under your current labor agreements, and work rule changes must 
be negotiated, of course, with the unions? How can you say that 
you are going to cut those terminal and mechanical costs by $25 
million a year?
    Mr. Warrington. We have formal reviews that have been 
underway in many of our terminal operations and our shops, and 
there are significant opportunities to program work 
differently, purchase materials differently, inventory 
materials differently. It is about management of the assets and 
management of the service. Those are very real, Mr. Chairman.

                           FLEET EFFICIENCIES

    Mr. Rogers. On that point, in your plan you say you can 
save $10 million in what is called fleet efficiencies; that is, 
reallocating equipment, cars and engines and so forth to places 
where they are most needed----
    Mr. Warrington. Right.
    Mr. Rogers [continuing]. And that you can save $30 million 
in 2003 in that fashion, but your most recent attempt at that 
resulted in a $1.7 million loss; that is, the addition of the 
line from Chicago to Janesville, Wisconsin. How can we be 
expected to believe that?
    Mr. Warrington. Well, I will give you an example of how 
that works. It is about deploying our equipment, particularly 
our sleepers, to trains that have the highest demand, and I 
will give you a specific example. During the past two years, we 
ran a section of the Texas Eagle one day a week from Chicago to 
Los Angeles. We ran it through San Antonio to Los Angeles and 
in effect had that equipment tied up there for several days in 
Los Angeles.
    We will end up saving several million dollars of operating 
cost, number one, by not running that train through and tying 
up that equipment in Los Angeles. Two, we will redeploy that 
equipment to other routes where they will produce more revenue 
so in the end that one move associated with eliminating a 
frequency between San Antonio and Los Angeles and redeploying 
the equipment is worth millions of dollars of improvement.
    On the Lake Country Limited Service, Mr. Chairman, that was 
a train that we started last June, and it was not really 
envisioned as a passenger train. It was really envisioned as a 
mail and express train. The express market there was primarily 
around food products produced by General Mills and some other 
producers.
    It really did not have the kind of attractiveness or the 
capacity to run longer distances from Chicago west to produce 
the kind of revenue that we wanted, so we decided last week to 
eliminate that train.

                        Strategic Business Plan

    Mr. Rogers. Mr. Warrington, how will you reduce mechanical and 
terminal costs by $25 million per year when labor costs are fixed under 
current labor agreements and work rule changes must be negotiated with 
the unions?
    [The information follows:]
    Labor costs are fixed by labor contracts only on a rate per hour 
basis. Mechanical and terminal operations are being examined as to 
process and indirect costs. This encompasses what is performed and how 
it is performed, including both the labor and materials required. 
Safety and reliability are kept as a focus as processes are re-
engineered for improved efficiency and cost effectiveness. This re-
engineering does not impact hourly wage rates nor require newly 
negotiated work rule changes.
    Mr. Rogers. Mr. Warrington, why do you believe you can achieve $10 
million in fleet efficiencies this year, and $30 million in 2003, when 
Amtrak's most recent attempt at adding routes resulted in a $1.7 
million (or $579 per rider) loss?
    [The information follows:]
    Over the last two fiscal years we have cumulatively achieved $10 
million of savings in fleet efficiencies. Some but not all of these 
fleet cost saving actions were a part of the network growth strategy. 
Some of these savings were achieved through other cost management 
initiatives that the company has taken. Most of these changes have been 
accomplished through more aggressive deployment of equipment to 
specific market needs on each train. In addition, there are other 
seasonal adjustments we make, particularly in the area of sleeping car 
use, which generate savings. We continue to set a goal of $30 million 
dollars of savings in FY 03 and hope to achieve that through 
continuation of cost management initiatives and further implementation 
of the network growth strategy.

                       UNDEFINED BUSINESS ACTIONS

    Mr. Rogers. Now, in your business plan you have at least 
$125 million in undefined business actions or gaps that you say 
will come to fruition. Now, after four years of developing 
business plans we are still getting these big gaps where you 
say we are going to save this amount of money, but you do not 
say how. Explain that for us.
    Mr. Warrington. We have worked hard to reduce the number of 
undefined actions that Ken highlighted last year as part of the 
2000 plan, and we have done that. We have $125 million yet to 
go.
    Over the next five or six months as we put together our 
business plan for next year, we will clearly define those $125 
million worth of actions.
    Mr. Rogers. And when can we know of those specifics?
    Mr. Warrington. We would normally do it, Mr. Chairman, as 
part of our business plan that we adopt in September. We can 
share them with you. If we have them together, we will share 
them with you before then.
    Mr. Mead. I would encourage, Mr. Chairman, to get those 
earlier. The September/October time frame is getting a little 
late.
    Mr. Rogers. Well, I think you are correct. We are going to 
have to write the appropriations bill here in the late spring 
or early summer and take that to the Floor to defend it.
    I am sure the question is going to be asked. Well, now wait 
a minute. You say you are going to save $125 million. How?
    Mr. Warrington. Right.

                         HIGH SPEED RAIL BONDS

    Mr. Rogers. So I suggest to you that if we do not have that 
before we draft the appropriations bill here in this 
subcommittee we may have to rethink the amount of money, so we 
need that defined for us.
    Now let us talk a minute about the High Speed Rail 
Investment Act, the so-called fast trains, high speed rail. 
Under the so-called Biden-Hutchinson bill to increase the 
bonding authority to $12 billion, Amtrak would be able to sell 
$12 billion in high speed rail bonds over the next ten years to 
invest in designated corridors to upgrade its high speed rail, 
to build tracks and to buy high speed rail equipment. States 
would match at least 20 percent of those funds.
    Do you believe, Mr. Warrington, that Amtrak needs that 
bonding authority in addition to the money that you have 
requested of us in 2002?
    Mr. Warrington. Very much so, Mr. Chairman.
    Mr. Rogers. You say in your business plan that Amtrak needs 
about $1.5 billion per year. If we should adopt that bond bill, 
why should we not also then reduce your appropriations request 
to the glide path level of $521 million at the 40 percent 
layout rate?
    Mr. Warrington. The way the arithmetic actually works is 
that bond bill was originally a $1 billion bond bill, and while 
the value of it has increased to $1.2 billion, what that 
additional $200 million will buy annually is simply more 
incremental high speed program development, but it will not 
cover the basic non-matching network requirements that are 
ineligible under the bond bill.
    In other words, Amtrak has a basic, in round numbers, $550 
million annual need for non-matching capital for its basic 
equipment overhauls, basic infrastructure, business systems, 
reservation systems, that are not eligible programs for a High 
Speed Rail Investment Act. Now, a large piece of the High Speed 
Rail Investment Act, on the other hand, will benefit the 
existing operation in partnership with states.
    For example, about a third of that would be used on the 
northeast corridor to deal with the life safety and reliability 
issues that Ken has raised earlier. Also, Mr. Chairman, what is 
interesting is that about 7,000 miles of our 22,000 route 
system off the northeast corridor would directly benefit from, 
in other words, existing trains would benefit from the High 
Speed Rail Investment Act, which sort of goes to your question, 
Mr. Olver.
    The short answer is we have a basic system need of about 
$550 million a year that I cannot match or partner with anybody 
and that has to do with Amtrak's basic capital needs that 
nobody else cares about but Amtrak. That, coupled with at least 
$1 billion a year, will enable us to partner on the development 
of high speed corridors around the country, and that will also 
benefit our existing train service, including the northeast 
corridor.


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                        rail passenger subsidies

    Mr. Rogers. I have done some calculations, and I do not 
think this is any rocket science, but according to my 
calculations between the amount of money that you take in in 
revenues and the amount of money you are spending, you are some 
$740 million in the red each year. With your ridership, that 
works out to about $33.50 per passenger.
    Am I off base when I say that the taxpayers of the country 
are being asked to subsidize each passenger's fare by $33.50 
each time they ride?
    Mr. Warrington. Let me give you the exact numbers, which is 
dividing the amount of money we use for operating support, the 
amount of our appropriation that is devoted to operations, 
divided into the number of riders that we have and what the 
trend line has actually been looking like.
    In 1999, and we can do this one of two ways. One is with 
the $200 million of excess railroad retirement included within 
the calculation, which is over and above the self-sufficiency 
test or we can do it without excess RTA, which as I said is 
worth about $200 million a year.
    If we include RRTA as an expense, in 1999 that number was 
$22.51 per passenger. In 2000, the number was $16.09 across the 
system. In 2001, $9.80. Next year, 2002, $8.61, and in 2003, 
$7.23.
    Mr. Rogers. But that does not count all of the monies that 
we give to you. It seems to me the simplest way to look at it 
is your revenues are X dollars. Your expenses are X dollars. 
The difference is what we make up, which I think is $740 
million roughly a year.
    Now, your ridership is 22.5 million. If my math is correct, 
that is around $33.50 per passenger per ride. What is wrong 
with that logic?
    Mr. Warrington. Because of the self-sufficiency test, the 
only money we actually use for operations, Mr. Chairman, not 
for capital investment, but for operations, is way less than 
the total appropriations, and it includes excess railroad 
retirement costs.
    I guess what I am saying, Mr. Chairman, is of the $521 
million that we received this fiscal year, only $59 million of 
that in the end--if we make our plan this year--$59 million of 
that $521 million will actually be used to support operations. 
On top of that, another $180 million will be used to pay excess 
railroad retirement costs. Those are mandated benefits that 
must be paid. They are funds that we pay into the railroad 
retirement fund in excess of the benefits that Amtrak retirees 
receive, okay, actuarially.
    So what I am saying to you is that if you take the total 
amount of money that we use for operations, which is $242 
million, $59 million is for actual train-related operations and 
the $180 million for excess railroad retirement, that is the 
actual number that should be divided into our ridership for 
this year.
    That number has been declining. The actual dollar amount 
that we use for actual operations has been declining, and that 
is what is called the ``glide path''. That number is actually 
$59 million this year.

                 amtrak reform council recommendations

    Mr. Rogers. Well, we will save that for another time to 
discuss.
    Finally, the Amtrak Reform Council, which was created by 
the Congress in 1997 to evaluate Amtrak's performance and make 
recommendations to the Congress for reforms and for a new 
system if Amtrak does not achieve self-sufficiency. On March 20 
just passed, in fact yesterday, they released their second 
annual report.
    In summary, the report concluded that Amtrak's fundamental 
problem is a flawed institutional structure. It operates as 
both a commercial enterprise and a government agency. Ownership 
and maintenance of the northeast corridor sap Amtrak's 
resources and divert Amtrak's attention from its primary 
mission as a service provider.
    Now, the report also notes that even if Amtrak achieves 
operational self-sufficiency, it will still lose nearly $1 
billion annually and will require significant federal grants. 
At this time, it is I think safe to say an instable source of 
funding for the railroad.
    The council suggested a variety of structural changes that 
should be considered in the context of reauthorization, if it 
comes to that, to make Amtrak operate more effectively. One, 
they would place Amtrak's own northeast corridor infrastructure 
in a separate entity, possibly a government corporation that 
would deal with that track and the infrastructure.
    Two, they would separate Amtrak's train operations from its 
infrastructure and make each a subsidiary corporation of 
Amtrak. Three, they would involve states much more heavily in 
the planning, development, operation and funding of the 
national rail passenger system and rely on infrastructure 
improvements on federal matching funds administered by a single 
federal entity.
    They also say partial privatization in which Amtrak's 
national train operations would be privatized with Amtrak owned 
northeast corridor infrastructure placed in a separate 
government entity, and then another recommendation is full 
privatization, which is not recommended by them due to the 
experience in Britain.
    How do you assess their report?
    Mr. Warrington. I think there are a whole host of 
structural opportunities looking forward, but Mr. Chairman, I 
consider them a bit premature until we have a debate about who 
we are and what we are and what we want to pay for.
    Until we deal with the matter of what, as a matter of 
national policy, we want our passenger intercity rail system to 
be, I think it is a little premature to be contemplating 
alternate structures.
    I guess what I am saying is I think the public policy 
discussion and debate is important first. I think it is a very 
important discussion we really need to have to decide what this 
system is that we want to run.
    I think there are a whole host of organizational constructs 
that we could consider once we have that discussion and then 
decide what the right and appropriate level of funding should 
be, how it should be paid for; whether it's a federal or state 
government commitment.
    Mr. Rogers. Do either of you have a comment on the report 
of the council yesterday?
    Mr. Mead. Yes. I would like to comment on it. I think the 
chairman, Chairman Carmichael, who heads the Reform Council, 
characterized this as a work in progress, which I think is apt 
because I have a number of questions about it.
    I think the core questions are, one, the report says that 
Amtrak will be losing $1 billion a year, and I think they are 
pointing to the capital area. The capital is either going to 
have to be provided to Amtrak if we are going to have this 
system, or it is going to have to be provided to this new 
bureaucracy or this new corporation or organization. The money 
has to come from somewhere. Where will the money come from? The 
report does not answer that question.
    The second core question is in the northeast corridor. If 
Congress does not want to ante up with the capital for this 
corporation or organization to maintain the infrastructure, 
this new organization, now the owner of this infrastructure 
because Amtrak does not own it anymore, has to collect the 
money from somewhere.
    The only people I can think of are the people that ride 
Amtrak and the many more people that ride the commuter rails 
and the transit systems that also are the majority users of the 
corridor, so I think the council should answer those two 
questions in the coming months.
    Mr. Rogers. Ms. Scheinberg?
    Ms. Scheinberg. Yes, Mr. Chairman. I would agree with my 
co-panelists. In some ways, the best thing about the ARC report 
is that it gives Mr. Warrington and me something to agree on.
    I think it is very premature to have a solution when we 
have not defined the issue. We have not defined what it is we 
want to have in this country for intercity passenger rail, what 
kind of system we want, what the federal role is going to be 
and where the funding for that is going to come from.
    Until you define those things, this corporate structure and 
splitting off and all this stuff are details and are different 
options, but you have to define what we are talking about 
first, what it is that we are dealing with, so I think it is 
premature.
    Mr. Rogers. Well, it is about time we started discussing, 
though, is it not----
    Ms. Scheinberg. Absolutely.
    Mr. Rogers [continuing]. Where we are headed because it is 
going to be very difficult for Amtrak to meet the Congressional 
deadline I think next year. If we do not have something in mind 
before that takes place, we could have some utter confusion, 
and we all know Washington can never stand utter confusion.


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                                             Thursday, May 3, 2001.

    RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION U.S. DEPARTMENT OF 
                             TRANSPORTATION

                                WITNESS

EDWARD A. BRIGHAM, ACTING DEPUTY ADMINISTRATOR, RESEARCH AND SPECIAL 
    PROGRAMS ADMINISTRATION

                            Opening Remarks

    Mr. Rogers. Good morning. We have the acting deputy 
administrator, Mr. Edward Brigham, here today to present the 
budget request for the Research and Special Programs 
Administration (RSPA). We have not had a formal hearing with 
your agency for several years; I think 1996 was the last time, 
and we welcome you here today.
    RSPA ensures the safety of hazardous materials transport 
and oversees the emergency preparedness grants program, 
research and pipeline safety program. RSPA's budget request for 
2002 totals $110 million and represents an increase of 12 
percent over the 2001 enacted level. The request includes a new 
user fee and increases an existing user fee. In fact, the 
budget proposes a total of $74 million in user fees. That is an 
increase of 41 percent over current levels. RSPA's budget also 
asks for 49 new positions.
    In the past, the Committee has heard concerns about RSPA's 
proposals to increase and adopt new user fees on hazardous 
material shippers. This year, as in previous years, RSPA 
proposes to put another user fee on hazardous material shippers 
that register annually to yield $12 million. This fee is to 
offset about half of the costs associated with the Office of 
Hazardous Material Safety in 2002.
    Beginning in 2003, RSPA proposes to fully fund this office 
from these user fee collections. This new user fee is on top of 
the registration fees that these carriers and shippers 
currently pay. Congress has denied this new user fee each year 
it has been proposed.
    Over the past several years, pipeline safety has been 
propelled to the radar screen because of two horrific 
accidents; one in Bellingham, Washington, that killed three 
people, one in Carlsbad, New Mexico, that killed 12. In fact, 
the Carlsbad incident was the deadliest pipeline accident in 
the continental U.S. in almost 25 years.
    RSPA proposes a 15 percent increase for the Office of 
Pipeline Safety, funded largely through an increase in pipeline 
safety fees. These funds will increase inspections that help 
reduce the likelihood that these accidents will occur.
    In the pipeline area, RSPA has made some recent changes 
that I believe are beneficial. The agency now performs 
comprehensive assessments of safety risks by inspecting a 
company's entire operating system. They now take a system wide 
approach instead of segment by segment.
    In addition, the Office of Pipeline Safety is focusing on 
construction inspections to ensure that defects are not built 
into pipelines during the construction process. RSPA has also 
focused on reducing pipeline damage resulting from excavation. 
This is the leading cause of pipeline failures, we are told.
    However, several issues concern us. RSPA is using fewer 
state inspectors to inspect interstate pipelines. Some state 
officials do not agree with this decision because they are 
concerned about the safety impact. These folks do not receive 
any federal funds, so it is not about the money. Their 
diminishing role results in fewer and less thorough inspections 
of pipelines.
    In addition, RSPA has reduced its use of fines as an 
enforcement action for pipeline non-compliance. This is 
directly opposite to the approach the Federal Motor Carrier 
Safety Administration is taking. What impact has this strategy 
had on compliance and safety?
    RSPA has historically been the least responsive 
transportation agency in implementing the National 
Transportation Safety Board's recommendations. Specifically, 
the Office of Pipeline Safety has had the lowest rate at 69 
percent. I understand that some recent gains have been made, 
but I am sure there is room for improvement. What are the 
hurdles?
    Mr. Brigham, I understand that you are relatively new to 
RSPA. I hope you are enjoying your time at the agency. We hope 
that this hearing will be a pleasant experience for you. We are 
most interested in discussing your request and the concerns 
that I have just outlined, among others. I want to be sure that 
RSPA is doing the most effective job that can be done.
    Without objection, we will enter your written statement in 
the record, and we would appreciate your oral summary of that 
as briefly as you would like.
    Before we do that, let me yield to my friend from Minnesota 
for any opening comment. Mr. Sabo?
    Mr. Sabo. Thank you, Mr. Chairman.
    Mr. Brigham, good to see you again.
    Mr. Brigham. Good to see you, Mr. Sabo.
    Mr. Sabo. I want to thank you publicly for your good work 
for the House when you worked for the good institution. We 
welcome you back to the House in a different role and look 
forward to hearing your testimony. We will have some questions 
later.
    Mr. Rogers. You may proceed.

                         RSPA Opening Statement

    Mr. Brigham. Good morning, Mr. Chairman, Mr. Sabo, Members 
of the Subcommittee. As mentioned, my name is Ed Brigham. As 
the Research and Special Programs Administration senior career 
executive in the line of delegation, I am currently serving as 
acting deputy administrator.
    I appreciate this opportunity to discuss RSPA's past 
success in advancing safety, our number one priority, and how 
we propose to do even better by changing some of the ways we do 
business.
    RSPA's mission is cross cutting. We support all of the 
department's strategic goals--safety, mobility, economic 
growth, human and natural environment, national security and 
organizational excellence. RSPA is charged to protect the 
nation from the risks inherent in the transportation of 
hazardous materials by all modes, including pipelines, to 
coordinate transportation services during times of natural and 
manmade disasters and to manage intermodal transportation 
research which advances the efficiency of the nation's 
transportation system and infrastructure.

                             budget request

    As the Chairman mentioned, RSPA is requesting $110 million 
in fiscal year 2002. This funding will support investments 
which will, one, protect lives and safeguard the environment; 
two, increase mobility and national security; and three, 
improve the effectiveness of our human capital in RSPA and 
provide more efficient customer service.

                            pipeline safety

    Our missions to protect lives and safeguard the environment 
are best reflected in RSPA's pipeline and hazardous material 
safety programs. Through the Office of Pipeline Safety, RSPA is 
responsible for the safe, efficient and environmentally sound 
operation of the nation's pipeline system.
    The base or current funding level will allow OPS to inspect 
and establish standards for the design, construction, operation 
and maintenance of natural gas and hazardous liquid pipelines. 
We propose a $6.8 million increase over fiscal year 2001 to 
fund new enforcement and outreach initiatives, integrity 
management and damage prevention community assistance, 
respectively. They will further enhance the safety of the 
pipeline system.
    We believe safety programs based only on compliance with 
regulations are less effective than a systemic approach in 
identifying and controlling risk. The integrity management 
initiative will focus on more than metal and valves. It will 
require operators to improve their operation and maintenance 
systems, including automated control sensors and operator 
training. The initiative also will apply more stringent 
requirements to pipelines in densely populated and 
environmentally sensitive areas.
    The leading cause of pipeline failure is outside force 
damage. In response, RSPA will promote the best practices 
identified in the 1999 report, Common Ground Study of One Call 
Systems and Damage Prevention Best Practices, through our new 
damage prevention community assistance initiative. This 
initiative will provide outreach, training and technical 
assistance for state and local partnerships to reduce 
construction related damage.
    Localities can help ensure their own safety by knowing 
where pipelines are located, how to avoid damaging them and how 
to recognize and report emergencies that may arise. This 
initiative will help provide that knowledge to localities.

                       hazardous material safety

    In the office of hazardous material safety, RSPA 
administers a comprehensive, nationwide, multimodal program to 
ensure the safe transportation of hazardous materials. The 
current funding level will support ongoing implementation and 
enforcement of uniform domestic safety standards that are 
harmonized with international requirements. It also supports 
training and information sharing to enhance compliance, 
inspection and enforcement, and emergency preparedness grants 
to state and local responders.
    Our fiscal year 2002 request proposes a $2.5 million 
increase in the hazardous materials safety program to support 
additional outreach and education efforts, which will be 
dedicated to reducing the number of hazardous material 
incidents among the estimated 800,000 daily shipments of 
hazardous materials.
    We will also improve the quality of hazardous materials 
data and make use of that data in identifying less obvious 
risks and developing innovative safety improvements. We also 
will conduct more shipper inspections to identify problems 
earlier in the transportation stream and address human error 
through training, technical assistance and better customer 
service.
    The budget also proposes, as mentioned, to increase 
registration fees to offset $12 million of basic hazardous 
material safety programs while maintaining full funding of the 
emergency preparedness grant program.

                         emergency preparedness

    RSPA's budget also continues to support mobility and 
national security. The Office of Emergency Transportation's 
base funding ensures that the department is able to execute its 
emergency preparedness, response and recovery responsibilities 
in all domestic and national security emergencies. The current 
funding also supports operation and maintenance of the 
department's alternative facility to ensure continuity of DOT's 
essential functions in an emergency. Additional funding is 
requested for OET only to cover mandatory increases.

                    federal transportation research

    Finally, RSPA is requesting funding to achieve agency-wide 
goals and improve the effectiveness of our human capital. The 
Office of Innovation, Research and Education coordinates 
federal transportation research, ensuring that research results 
address national needs and are available to all users of the 
transportation system.
    Base funding also will allow RSPA to continue to support 
departmental decision makers in setting the department's 
research and development agenda and to manage ongoing 
innovative multimodal research projects.

                       program support resources

    To support all of our program missions, our fiscal year 
2002 budget includes a request for a $2.6 million increase to 
modernize our business practices to meet expanding information 
resource, administrative support and customer service 
requirements. This initiative will invest in technology and 
human capital that are crucial for the full attainment of 
RSPA's program goals and safety mission, as well as allow us to 
participate in government-wide initiatives such as electronic 
government and telecommuting.
    Despite the growth of RSPA's programs in recent years, 
program support resources have not kept pace. We are struggling 
to maintain and are unable to replace over-burdened and 
obsolete telecommunications and information systems. We cannot 
fully meet the needs of our remote users at this time. Fully 
functional information resource and communication systems are 
vital for responding to requests from the public, Congress, the 
press and our inspectors in the field, especially during times 
of crisis.
    Additionally, RSPA needs to hire staff to fill skill gaps 
in financial management and information resource management. 
This investment is necessary to ensure the integrity and 
security of our transactions and our information systems.
    Our 2002 request, in conclusion, proposes investments that 
we believe are necessary to protect lives and safeguard the 
environment, increase mobility and national security and 
improve the effectiveness of our human capital and provide more 
efficient customer service.
    Thank you, Mr. Chairman. I am pleased to answer the 
subcommittee's questions.
    [The prepared statement and biography of Edward Brigham 
follow:]


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                 HAZARDOUS MATERIALS USER FEE PROPOSAL

    Mr. Rogers. Thank you, Mr. Brigham.
    First let me ask you about the hazardous materials fees 
that you are proposing. You are proposing a $12 million user 
fee to cover that, half the cost of the Office of Hazardous 
Material Safety, which only totals $21.2 million, and that this 
fee would fully offset that office beginning in 2003. It would 
be assessed against transporters of hazardous materials through 
the registration program.
    You did not include an offset in the event that Congress 
does not enact that user fee. Where would you cut that $12 
million if we do not accept this fee proposal?
    Mr. Brigham. It is the Administration's policy to utilize 
fees where there are identifiable benefits to particular 
industries or companies that receive services or are overseen 
by the federal government. We do not have an offset. There was 
an explicit decision to finance RSPA's request in this manner 
in the budget.
    Mr. Rogers. Suppose we do not pass that fee. What do you 
do?
    Mr. Brigham. Well, we would have to reexamine it obviously 
at that point if the fee financing is not made available.
    Mr. Rogers. Well, what you are inviting is for the Congress 
to take over that agency. I mean, we are not going to.
    If we cannot pass a user fee, and we have not passed one 
the last several years, and I do not expect that we would this 
time. If a user fee is not passed, then somebody has to come up 
with an offset. If you do not do it, we may have to. We may not 
be too accurate with that. I mean, why take a cleaver when you 
need a scalpel?
    Mr. Brigham. We understand the difficult choices that the 
committee faces in the appropriations process, Mr. Chairman. We 
are certainly glad to work with the committee, but I must 
reiterate that there was an explicit decision that this was the 
preferred way of financing the agency's request in the budget 
process.
    Mr. Rogers. I do not know why we do not have OMB down here 
at these hearings all the time anyway. Everybody backs up with 
Plan B. I do not know why we just do not have Mitch Daniels and 
the crew down here and say: ``what do you think about it?'' It 
is true of every agency, though. It is not just this one.
    Now, these fees would be collected from the same parties 
that now pay the emergency preparedness grants registration 
fee. Is that not a form of double taxation?
    Mr. Brigham. We are proposing to increase the existing fee. 
It does require action by Congress. There is a proposed general 
provision in the President's budget that would implement the 
increase.
    Mr. Rogers. OMB directives require that a proposed user fee 
involve a direct link between the fee and the service provided. 
What is that link here?
    Mr. Brigham. Well, we believe that there are identifiable 
benefits to the businesses and the firms that are involved in 
shipping and transporting hazardous material. A very important 
one is the benefit of a uniform national system.
    If there were not a federal hazardous material safety 
program, there might very well be 50 different hazardous 
material safety programs with different provisions. We think 
there is a direct benefit to the shippers and transporters of 
hazardous materials. Another important direct benefit is the 
safety of the transportation system.
    Mr. Rogers. We are talking about links. They require a 
direct link between the fee and the services provided. Not the 
benefits. The link.
    Mr. Brigham. I am not sure I understand that distinction, 
Mr. Chairman.
    Mr. Rogers. You need to ask OMB what their directive means.
    Mr. Brigham. We certainly discussed it with them, and we 
think we can identify the benefits to the industry from having 
a national hazardous material safety program.
    Mr. Rogers. Well, as I say, the OMB says there has to be a 
link between the fee and the service, and I do not, right-off, 
see that link here.
    Mr. Brigham. Well, a second link that we would certainly 
note is the safety of the transportation system.
    Every time there is a hazardous material spill or incident, 
it often brings the transportation system to a halt. It 
interrupts transport in a particular mode. It can take a bridge 
or a highway out of action for a great deal of time. That 
increases the cost of business, and certainly a safe operating 
system with fewer interruptions is a benefit to hazardous 
materials shippers and transporters.
    The third point I would make is that having a national 
safety program increases public confidence in the products and 
services provided by the shippers and the transporters of 
hazardous material. With a safe national hazmat system 
consumers feel more confident, and they are more willing to use 
their products and consume the services provided by the 
businesses.

      RESPONSE TO NTSB RECOMMENDATIONS AND STATUTORY REQUIREMENTS

    Mr. Rogers. Let me ask you about the National 
Transportation Safety Board's recommendations and statutory 
requirements implementation.
    RSPA has had the lowest rate of any transportation 
administration for implementing NTSB's recommendations. OPS is 
the worst agency on the list. We are trying to find an 
explanation for the low rate of fulfilling NTSB's 
recommendations. What is the reason?
    Mr. Brigham. We are making a concerted effort as an agency 
to improve our performance in this area. Our data indicates 
that, in the case of the Office of Pipeline Safety, fully 85 
percent of the NTSB recommendations in the last five years have 
been satisfied to their satisfaction. Indeed, a major part of 
our recent regulatory efforts have been in response to NTSB 
recommendations.
    Mr. Rogers. GAO disagrees. In May of 2000, GAO reported 
that OPS has not implemented 22 statutory requirements, 12 of 
which date from 1992 or earlier.
    A table in that same report shows that RSPA has an NTSB 
recommendation implementation rate of 72 percent, OPS 69 
percent, so you are arguing with GAO here. I think I know who 
is going to win that kind of an argument.
    Mr. Brigham. The data I cited, Mr. Chairman, was from the 
most recent five years. We cite that data as an indication of 
improvement in our performance over time. That was the purpose 
for giving you that data.
    I would also indicate that in the area of hazardous 
materials, for example, we have some outstanding 
recommendations from NTSB, but those involve completion of 
either research projects or completion of rulemakings, and we 
anticipate very satisfactory conclusions to the majority of 
those recommendations.
    One other point I would like to make is that we have been 
making, as an agency, a concerted effort in recent months to 
respond through rulemakings. We have done nine rulemaking 
actions in the last six months. Four of those are explicit 
response to NTSB recommendations, and we have more developments 
underway that also would be in response to NTSB 
recommendations.
    Mr. Rogers. How many recommendations does OPS currently 
have unfulfilled?
    Mr. Brigham. We will have to get that data for you in 
writing, sir. I do not have that in my memory.
    Mr. Rogers. Anybody in the room have that available?
    [No response.]
    Mr. Brigham. We will have to provide that in writing, sir.
    Mr. Rogers. All right. What would you consider the most 
important pipeline regulations or recommendation that RSPA 
plans to finalize or implement during the fiscal year?
    Mr. Brigham. I think the one we feel is most important is 
our regulations to implement the proposed integrity management 
program. We have already gone to final regulation for integrity 
management program for large liquid pipeline operators. We have 
a notice of proposed rulemaking for small liquid operators, and 
we plan to have before the end of this year proposed 
regulations for gas pipelines.

                         RESEARCH COORDINATION

    Mr. Rogers. Mr. Sabo?
    Mr. Sabo. Thank you, Mr. Chairman.
    You are a relatively small agency with lots of important 
responsibilities. One of those is research funding, and I need 
to understand a little bit better how that works. As I read 
your materials, you are basically involved in coordinating 
research. Is that accurate?
    Mr. Brigham. Yes, sir, that is correct, but we have two 
major research activities that we manage. One is the university 
transportation center research program, and it is funded from a 
set-aside in the federal highway fund under TEA-21, but we 
manage it for the department. There are 33 university 
transportation research centers, which involve a total of about 
80 universities and colleges doing multimodal research.
    A second activity we are involved in, and it is not large 
dollars, but we are involved in managing contracts for some 
very innovative, cutting edge, multimodal research activities. 
One is the human factors research that we are managing for the 
department. Another is critical infrastructure protection 
research, and a third is remote sensing, which we jointly 
manage with NASA. All three of those research project areas are 
accomplished through contracts, particularly with consortia.
    Mr. Sabo. One of the areas that concerns me is this 
afternoon we hear again from people from the aviation industry 
dealing with capacity and scheduling and a variety of problems, 
but uniformly we hear that capacity is limited in many major 
airports. One of the complicating factors for building new 
runways is the noise issue.
    My judgement is that we need to get at the core of that 
problem, and the only way you get at the long-term core is by 
quieter engine, quieter aircraft. We have made some 
improvements. The Stage 3 is significantly better than Stage 2. 
Stage 3 is much better than the old planes with hush kits, 
though we clearly need to move that technology forward in a 
significant fashion if we are going to deal with capacity in 
this country.
    Is that the type of issue your agency gets involved in with 
the FAA? We have a very little bit of money going through NASA 
that is geared in that area, but, unfortunately, it is a very 
small amount. Do you coordinate with, like your agency, FAA and 
NASA?
    Mr. Brigham. RSPA has been involved in working with the 
Office of the Secretary in coordinating the research agenda for 
the entire department. That is conceivably one way where RSPA 
might be involved.
    The actual research that we manage within RSPA, through the 
UTC program and through our direct contracts, is explicitly 
multimodal research. They are on topics that affect more than 
one mode of transportation.
    It is conceivable that noise abatement could extend beyond 
more than one mode, but I suspect that it is primarily an 
aviation issue.
    Mr. Sabo. Yes.
    Mr. Brigham. In that case, it would be most appropriately 
research conducted by FAA. The research we manage is very 
explicitly multimodal.

                  ADVANCED VEHICLE TECHNOLOGY PROGRAM

    Mr. Sabo. You have been involved in the advanced vehicle 
technology program, though, have you not?
    Mr. Brigham. Yes, sir.
    Mr. Sabo. What is the status of that program at this point?
    Mr. Brigham. The President's budget does not request any 
additional funding.
    Mr. Sabo. No. I understand that, but where are we with the 
funding that have been spent?
    Mr. Brigham. There are seven consortia, and those consortia 
have one to two years remaining to use up the current contracts 
that we have entered into. We are managing those contracts.
    Mr. Sabo. And what you do there is you manage the 
contracts, but the money flows from elsewhere in the federal 
budget?
    Mr. Brigham. Yes. The AVP contracts that we made in 1999 
and 2000 came from TEA-21 set-asides from the Highway Trust 
Fund.
    Mr. Sabo. Thank you, Mr. Chairman.

                  HAZARDOUS MATERIAL USER FEE PROPOSAL

    Mr. Rogers. Ms. Kilpatrick?
    Ms. Kilpatrick. Thank you, Mr. Chairman.
    Good morning, Mr. Brigham. I want to go back just briefly 
to the fees, the user fees. This Congress has been on record of 
not approving for several years, but you are taking the risk of 
some $12 million in reduction because those fees may not be 
implemented, and you have not yet identified where you are 
going to make the adjustment.
    Is that smart? Do you just think we are going to change our 
color this time and give you those $12 million in fees?
    Mr. Brigham. Ms. Kilpatrick, I can only say that the fee is 
an administration request. It was a global budget decision made 
by the White House.
    There are many other user fee increases or even new user 
fees proposed in other agencies. It is a key part of the 
President's fiscal policy.
    Ms. Kilpatrick. Right, and that is my point exactly. You 
are not the first to sit there and did not ask for what you 
really needed. You, unlike Secretary Mineta and others, have 
the safety and welfare and life and death of American citizens 
in your hands.
    In my own district, last year we had a fatal truck accident 
that did spill hazardous materials. The driver died, and four 
passengers in cars around him at that time also passed, and 
several were injured. It happens a lot. I read something that 
20 or more Americans every year die in such accidents.
    To ask for user fees, which you probably will not get in 
time, when safety is really number one in all of our minds and 
life, I think is bad public policy. When we agree with you or 
not agree with user fees, and the Congress is just as guilty, 
but at a time when resources are plentiful, and we cannot say 
this all the time, those things that need to be funded ought to 
be funded.
    I respect your job and your authority. Yes, it is over your 
pay grade, and I wish like hell you could come in here and say, 
you know, I am not supposed to say this, but, you know, we need 
A, B and C for the safety of American citizens.
    That is unfortunate that you are not able to do that. I am 
not at you personally for that, but I think this Congress has 
to sometimes step out and do what we think is right. We will do 
that. I am not sure to the tune of $12 million.
    On the other part of that, what kind of hardship will there 
be on the industry to come up with the $12 million or some 
variation of it? I mean, will we see other kinds of things cut 
back? Safety? Bottom lines of businesses? Do they have it? 
Obviously some are better off than others. What would be that 
impact?
    Mr. Brigham. The fees are not the same for every company. 
We have two fee amounts, depending on the size of the company. 
It is a much smaller amount for small companies.
    We have not done an analysis of the impact on the business 
position of shippers and transporters, but we can provide an 
answer to that question for the record.
    [The information follows:]

    The final rule raising the registration fees to their current 
levels was supported by many industry groups represented in the 
Interested Parties for HMTA Reauthorization, an inter-industry advocacy 
group. To date, we are not aware of any negative impact on safety, nor 
any substantive impact on business performance resulting from the 
higher fee structure.
    Mr. Rogers. What will you need to charge companies to fully fund 
the Office of Hazardous Materials Safety?
    [The information follows:]
    At this time, RSPA has not determined the nature of changes in the 
current fee structure. It is possible that, as more companies become 
aware of the registration requirements, no further changes will be 
required. The need for additional funds to cover the costs of both the 
Hazardous Material Safety program and the Emergency Preparedness Grants 
program in future years will depend on the size of the unexpended 
balance in the previous year and the projected funding needs for the 
following year.
    Mr. Rogers. How would the new hazardous materials user fee be 
assessed?
    [The information follows:]
    If the user fee proposal were enacted by Congress, we would expect 
to use the same administrative mechanisms that are now in place for 
collecting fees for Emergency Preparedness Grants. The new fee schedule 
would become effective July 1, 2002, which is the start of the hazmat 
registration year. In anticipation of that date, we plan to publish a 
final rule on registration fees no later than May 1, 2002.
    Mr. Rogers. These fees will be collected from the same parties that 
pay the emergency preparedness grants registration fee. Isn't this a 
form of double taxation?
    [The information follow:]
    The beneficiaries of RSPA services would be asked to pay the cost 
of two different sets of services, the planning and training grants to 
address the risks to first responders of hazardous materials incidents, 
and program activities that provide a high level of safety, ensuring 
the expeditious movement of hazardous materials throughout the US 
economy while minimizing the possibility of an incident occurring. RSPA 
will explore a number of options to collect the additional fees 
required to partially cover the costs of its Hazardous Materials Safety 
program, including increasing fees on current registrants and expanding 
the base to include others. Increasing fees to cover costs associated 
with providing a national public safety program would be consistent 
with Administration policy.
    Mr. Rogers. Explain why you believe this program should be user fee 
funded, and why it should not continue to be funded from the general 
treasury.
    [The information follows:]
    It is Administration policy that industries that benefit from 
government programs should pay for those programs. We propose in our 
budget request to charge the hazardous materials industry for the costs 
associated with assuring the safe transportation of hazardous 
materials. This would ensure that the hazardous materials industry 
receiving those benefits pay part of the cost of the program that 
facilitates its operations through uniform national rules, minimizes 
costly interruptions of transportation, and promotes public confidence 
in the appropriate use of hazardous materials.

                      HAZARDOUS MATERIALS STAFFING

    Ms. Kilpatrick. I would like to have that. Thank you very 
much, sir.
    How many people work in your hazardous materials safety 
program?
    Mr. Brigham. One hundred and twenty-nine.
    Ms. Kilpatrick. And where are they placed in America? Are 
they in several states?
    Mr. Brigham. They are spread all over the country.
    Ms. Kilpatrick. And would the bulk of the 129 be here? 
Would ten percent or more be administration, or are they in the 
field doing these inspections?
    Mr. McGuire. Mr. Chairman, I am Robert A. McGuire, 
Associate Administrator for Hazardous Materials Safety, RSPA. 
We have about 35 inspectors out in the field training 
personnel. The rest are located at headquarters here.
    Ms. Kilpatrick. So 35 out in the field and 129, so 100 or 
more, 90 or more, who are in D.C.?
    Mr. McGuire. That is correct.
    Ms. Kilpatrick. Is that enough? Are you fully staffed?
    Mr. Brigham. We support the President's budget. We have a 
significant increase for both hazardous materials and pipeline 
safety staff in the budget, which we think are necessary to 
implement the new initiatives we are requesting.
    Ms. Kilpatrick. If you had more, would the safety of 
Americans be in a better position?
    Mr. Brigham. We certainly think this budget request will 
allow us to improve safety, to make progress and enhance the 
safety in the transportation system.

                   AGENCY MISSION AND RESPONSIBILITY

    Ms. Kilpatrick. How do you judge the value of your program 
when it is weighted against public safety? How do you value it?
    Mr. Brigham. That is a good question. I am aware of other 
programs where one gets into some very difficult calculations 
about the value of human life.
    The interruption of business that occurs when there are 
incidents can be estimated, but the other things are very 
difficult.
    Ms. Kilpatrick. They are not tangible, is what you are 
saying?
    Mr. Brigham. Yes, ma'am. There are a lot of intangible 
benefits to all of society from our safety program.
    Ms. Kilpatrick. If you were to rate your agency, and do not 
just say A, you know. Give me an idea how you would rate your 
agency in terms of your mission, in terms of American safety, 
in terms of business partnering and the responsibilities of 
economics and so forth.
    Mr. Brigham. We are doing a very good job partnering with 
state and local governments. We are involving them in our 
hazardous materials and our pipeline safety programs 
increasingly. We are working very hard as an agency in both of 
these regulatory areas.
    Our biggest difficulty is the rapid growth, first of all, 
in the volume of hazardous material shipments going through our 
transportation system and, in the case of pipeline safety, the 
rapid growth of population near pipelines.
    Most of the pipelines that were constructed in many cases 
years and years ago, were in totally rural areas. These areas 
are now our suburbs, so people are coming increasingly in 
contact with the pipeline system in a way that did not occur 
even ten, 15, 20 years ago. That is what we are working very 
hard to try to catch up with.

                      TERRORIST RESPONSE RESEARCH

    Ms. Kilpatrick. Finally, I notice that the budget provides 
$1 million for a study of the vulnerability of the nation's 
transportation system to terrorist attacks. Is that enough? How 
effective is it? Is there a way of measuring it, or is it also 
too intangible to put a marker on?
    Mr. Brigham. This current fiscal year, 2001, is the first 
time we have received money for that area of research, and we 
are just embarking on that.
    It is enough money because we are focused on a narrow 
question. We are not focused on the infrastructure of the 
federal government or our infrastructure as an agency. We are 
trying to look at the vulnerability of the transportation 
system.
    One of the things that we are looking at is, as 
transportation becomes increasingly intelligent, whether it is 
using more and more information technology for controls. 
Unfortunately, that also increases the vulnerability of the 
transportation system, and that is our top priority for that 
research.
    This year, 2001, is the first money we have received for 
that purpose, and we are requesting an additional $1 million in 
2002.

                 TRANSPORTATION INFRASTRUCTURE RESEARCH

    Ms. Kilpatrick. I see. The ITS systems that are being 
implemented all over America, because they are technology and 
not bodies and not equipment they are more easy to access. Is 
this the second year of that?
    Mr. Brigham. Yes, ma'am. The 2002 request is the second 
year.
    Ms. Kilpatrick. Right. This is the second year. Do you have 
anything that we can read to see where you are? Are you 
developing that?
    Mr. Brigham. We can certainly provide you a description of 
the current year projects----
    Ms. Kilpatrick. Okay.
    Mr. Brigham [continuing]. That we are undertaking. We would 
be glad to do that for the record.
    [The information follows:]

    RSPA's FY01 (current year) activities regarding Transportation 
Infrastructure Assurance (TIA) Research and Development have been 
coordinated and selected in conjunction with the DOT Office of 
Intelligence and Security (S-60). These activities focus on three 
projects:
    (1) Critical Transportation Interdependencies--This activity is 
assessing the interdependencies of critical elements supporting the 
operation of the transportation system (including electric power and 
telecommunications) in order to determine short-and long-term impact on 
people and on transportation systems of loss of or damage to these 
infrastructures.
    (2) Electronic Commerce In Transportation--This activity is 
determining and describing the dependencies of the world's existing and 
future transportation systems on information and communication systems 
associated with business-to-business dealings and E-commerce, 
highlighting the vulnerabilities associated with existing and emerging 
process, and making this information available to transportation system 
operators.
    (3) Weapons of Mass Destruction (WMD) Response Team Requirements--
This activity will: (1) define WMD emergency response team 
transportation requirements for a variety of WMD incident types, and 
(2) after assessing current transportation plans, recommend 
coordination steps and strategies for civilian and military 
transportation providers which will better match WMD response 
transportation needs with resources.

    .Ms. Kilpatrick. I would like to take a look at that and 
then to keep in touch with you to keep advised on how it is 
materializing.
    I think technology is what we are into in 2001. It will 
probably continue to be more and more advanced. It is great on 
the one sense. It makes you vulnerable on another. How you stay 
ahead of the curve is going to be very interesting and costly, 
I do believe.
    Mr. Brigham. We agree with that totally.
    Ms. Kilpatrick. Thank you.
    Thank you, Mr. Chairman.

                        DAMAGE PREVENTION GRANTS

    Mr. Rogers. Thank you.
    Let me ask you about the damage prevention grants. You 
formerly had a thing called the one call grant program 
apparently where people were encouraged to call before they 
excavated to find the location of pipes and the like.
    That apparently has been proposed to be replaced by two 
different programs, as I understand it. Would you explain what 
is going on there?
    Mr. Brigham. We are not replacing the program. We are 
approaching the damage prevention area in a slightly different 
way. Our damage prevention community assistance initiative will 
provide direct outreach, technical assistance and training to 
local programs.
    One of the needs that we see is to tailor the damage 
prevention activities to a particular community reflecting 
where the pipelines are, the kinds of pipelines near that 
community and factors like population density and other 
transportation modes that come near that pipeline.
    I would note that the Common Ground alliance will continue. 
That is a public/private partnership that is nationwide, and 
our 2002 request would apply $3 million to direct outreach and 
assistance to localities so they can implement the practices 
identified by the Common Ground alliance.
    Mr. Rogers. How would the grant monies be distributed? To 
whom?
    Mr. Brigham. We would take applications from local 
programs. We will be glad to give you a description of our 
proposed methodology.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Rogers. So this would be an application from a city? 
When you say locality----
    Mr. Brigham. It would be from states on behalf of 
localities. It could be regional organizations as well, I 
believe.
    [Pause.]
    Mr. Brigham. I am reminded that we are in the process of 
awarding the $5 million damage prevention grants authorized by 
TEA-21, and that is a process we will complete during this 
fiscal year.
    Mr. Rogers. In what fashion will those monies be 
distributed?
    Mr. Brigham. We already have applications from the states. 
The applications are being reviewed.
    Mr. Rogers. So the money is not being distributed by some 
formula? It is distributed by a grant program that states apply 
to you for?
    Mr. Brigham. Yes, sir.
    Mr. Rogers. Just states? Not cities?
    Mr. Brigham. The existing damage prevention grants in 2001 
are just for states.
    Mr. Rogers. And assumedly then they would use the money to 
distribute to cities or communities?
    Mr. Brigham. Or to run their own state efforts.

                       PIPELINE SAFETY USER FEES

    Mr. Rogers. Yes. I am sure the latter.
    Now, you propose to increase the Office of Pipeline Safety 
user fees. Of the $53.8 million requested for OPS, $46.3 
million of that is to be from user fees. That is about a $10 
million increase in user fees from the $36.6 million that was 
enacted in 2001.
    How will this fee increase help you meet your pipeline 
safety goals, and what impact would it have on the industry?
    Mr. Brigham. We do not need legislative action to increase 
those fees. That is something within the administrative 
discretion of RSPA. The fee increases will go directly for the 
new initiatives that we talked about, the integrity management 
and the damage prevention community assistance.
    We believe that some of the pipeline industry, will not see 
those fees as being onerous because of the importance of 
improving the safety record of pipelines and hopefully the 
resulting increase in public confidence in the pipeline system.

                      PIPELINE SAFETY ENFORCEMENT

    Mr. Rogers. OPS has reduced its use of fines for non-
compliance. GAO tells us that from 1990 to 1998 OPS decreased 
the proportion of enforcement actions in which it proposed 
fines from about 49 percent to about four percent.
    At the same time, the proportion of warning letters and 
letters of concern has increased from about 33 percent in 1990 
to about 68 percent in 1998. What is going on there?
    Mr. Brigham. Mr. Chairman, we have undertaken an effort to 
utilize all of the tools that are available in the pipeline 
safety program. In particular, we have increased within the 
last two years the use of fines.
    From 1995 through 1999, the Office of Pipeline Safety 
annually proposed an average of $460,000 in civil penalties. In 
2000, OPS proposed $4.3 million of penalties, almost a tenfold 
increase. For the first three months of this calendar year, 
they have proposed $640,000 in civil penalties, which is an 
annual rate of about $2.6 million.
    We do agree that we need to use all of our tools to make 
the pipeline system as safe as we can, and for that reason in 
the last 15 months we have made a significant increase in our 
use of civil penalty.
    Mr. Rogers. Have you evaluated the impact of reduced fines 
on compliance with safety regulations?
    Mr. Brigham. We have not done that evaluation, Mr. 
Chairman.
    [Pause.]
    Mr. Brigham. I am told that we have an evaluation underway, 
and it will be completed by the end of the year.
    Mr. Rogers. Did I understand you to say that the fines in 
2000 are up?
    Mr. Brigham. Yes, sir.
    Mr. Rogers. To what level?
    Mr. Brigham. In calendar year 2000, the Office of Pipeline 
Safety proposed $4.3 million in civil penalties.
    Mr. Rogers. Have fewer civil penalties resulted in improved 
or decreased compliance with regulations?
    Mr. Brigham. As I noted, we have that evaluation underway, 
which we believe will be completed by the end of the year.
    Mr. Rogers. As I understand it, in the information 
submitted for the record last year you indicated that RSPA is 
de-emphasizing collecting penalties for insignificant non-
compliance. Does that explain in some way the reduction in 
fines?
    Mr. Brigham. Mr. Chairman, I would like to answer that 
question for the record, if I may. I do not know that we have 
done an analysis by the size of fines, but with your permission 
we would like to look at that data.
    Mr. Rogers. Well, it seems like a percentage of enforcement 
action civil penalties is becoming less and less a factor in 
favor of warning letters. Is that a fair statement?
    [Pause.]
    Mr. Brigham. Mr. Chairman, I believe the best response I 
can give is that, since we got an explicit recommendation from 
GAO that we were not utilizing civil penalties enough, we have 
made a concerted effort to use more civil penalties. That is 
the best explanation for the increase in the last 15 months or 
so. This is in direct response to a GAO recommendation.
    We will be glad to give you additional information for the 
record on the use of civil penalties compared to other 
enforcement action.
    Mr. Rogers. Please do, and file for the record, too, the 
latest information you have on the civil penalties, amounts and 
numbers, and as a proportion of the total enforcement actions.
    Mr. Brigham. Yes, sir. We will be glad to do that.
    [The information follows:]


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    Mr. Rogers. The Federal Motor Carrier Safety Administration 
is taking the opposite approach to enforcement. They are 
increasing enforcement through fines and penalties. Why do you 
think they would move in that direction, and RSPA has been 
doing the opposite?
    Mr. Brigham. I think the best response is to reiterate that 
we are responding to GAO recommendations trying to use the full 
range of enforcement actions available to us to tailor the best 
action to the specific situations we encounter.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                PIPELINE SAFETY NATIONAL MAPPING PROGRAM

    Mr. Rogers. What is the status of the Office of Pipeline 
Safety's national mapping program?
    Mr. Brigham. It is, we believe, in good shape. We are 
making great progress. It is now on our website. Individual 
citizens, as well as the pipeline companies, can access the 
national mapping system and actually go down to a fairly fine 
level of detail.
    We are continuing to get voluntary submissions from the 
industry to add to the database. The last numbers that I have 
seen were that approximately 80 percent of the liquid pipelines 
and 30 percent of the gas pipelines are now in the database.
    We would love, Mr. Chairman, to show you some of the 
products that are coming from that mapping system and give you 
a demonstration. It is a very, very useful tool.
    We have used it internally. A good recent example was the 
Washington state earthquake. We were able to produce in a very 
quick period of time a map showing the pipelines that were near 
the epicenter of that earthquake and make appropriate contact 
to make sure those pipelines were checked after the earthquake. 
Fortunately, the integrity of those pipelines was maintained.
    Mr. Rogers. Yes. We would like to see that.
    Last year, your goal was to collect 70 percent of the 
pipeline data by the year 2000. Where are you?
    Mr. Brigham. As I indicated, we will be glad to provide for 
the record the very latest information, but my memory is that 
we have 80 percent of the liquid lines and 30 percent of the 
natural gas lines in the database already.
    [The information follows:]

    As of April 25, 2001, the National Pipeline Mapping System 
has received 82 percent of the hazardous liquid and 40 percent 
of the natural gas transmission pipelines.

    Mr. Rogers. Obviously you have some delinquent operators 
who are not furnishing information.
    Mr. Brigham. It is a voluntary program, and we are 
following up with the individual companies making our best 
pitch because it contributes to safety. This information will 
be very, very helpful to states and localities as they try to 
implement their damage prevention program.
    Mr. Rogers. Well, if they are slow to come in, what kind of 
ways can you encourage them to participate?
    Mr. Brigham. Ultimately we could take regulatory action. We 
would like very much to accomplish this through voluntary 
compliance.
    As I indicated, we are making our best pitch to the 
companies that it is of value to them and to the industry as a 
whole, as well as to the public who live near their pipelines.
    Mr. Rogers. Why would they not voluntarily give this 
information?
    Mr. Brigham. I think in some cases there are concerns about 
protection of proprietary information. We have tried to argue 
to them that the mapping system is accurate to within 100 feet 
to 200 feet at most, and that does not allow anyone to find out 
proprietary information, but that is part of their concern.
    There may also be concerns about marketing. It is not so 
much location, but it is information like the size of the 
pipeline, the various products that go through the pipeline, 
the pressure at which the pipeline works, all of which is also 
in the database.
    Mr. Rogers. Who has access to that database?
    Mr. Brigham. The public has access to the mapping system 
through our website.
    Mr. Rogers. Well, is that a legitimate concern--proprietary 
rights?
    Mr. Brigham. We think we can make it work in a way that 
their proprietary interests are protected. We are working with 
them on that.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Rogers. Now, how is RSPA balancing two apparently 
conflicting needs; reducing access to pipeline information to 
protect against terrorists and increasing information to help 
communities plan for disasters, understand the risks and 
respond to threats? How do you balance those two conflicting?
    Mr. Brigham. That is a very good question, Mr. Chairman. It 
is one that we have thought about. We have consulted security 
people. We are told that there is not an increased risk from 
making this information available.
    If a terrorist were inclined to try to interrupt a 
transportation mode such as a pipeline, they would be able to 
get that information with or without the existence of our 
mapping system.
    [The information follows:]

                      Pipeline Vulnerability Study

    Mr. Rogers. How has your program, policies, or procedures changed 
based on this study?
    [The information follows:]
    RSPA is in the process of identifying appropriate kinds of 
information that can be made available to the general public, emergency 
response officials, and interested individuals. Portions of the 
National Pipeline Mapping System will be made available to the public 
over the internet. This will include general information about where 
pipeline are located, their proximity to the public or unusually 
environmentally sensitive areas and what product is being transported. 
Much of this information is currently available through open sources 
such as Penwell Maps. More detailed information will be available to 
individuals about the pipelines locate din proximity to their homes, 
schools and workplaces. Emergency response officials will be provided 
with the greatest access to pipeline information.
    It is RSPA's intention to share as much information about pipelines 
as is possible without jeopardizing the security of the national 
pipeline infrastructure. RSPA is also working with the Department's 
Chief Information Office and the Office of Intelligence and Security on 
protection of critical infrastructure information.

    Mr. Rogers. I will have other questions for the record that 
I think we can answer for the record.
    Mr. Sabo?
    Mr. Brigham. We will be glad to do that, Mr. Chairman.
    Mr. Sabo. I will have some also.
    Mr. Brigham. We will be glad to do that.
    Mr. Rogers. Thank you very much. Thanks for your 
reappearance on the Hill. We wish you well.
    We want to be helpful to you. We are concerned about the 
fact that a good portion of your budget is proposed to come 
from a new user fees, which the Congress has not been happy 
with in the past.
    In the event those fail, we need to work with you to see 
where we can minimize the damage to your agency.
    Mr. Brigham. We hear your message, Mr. Chairman, and we 
will be glad to provide any additional information that the 
committee needs in order to make its decision.
    Mr. Rogers. Thank you. Thank you very much.

                                Closing

    Mr. Rogers. Let me thank each of you for your time here 
today and your expertise and your wisdom. We appreciate your 
taking the time to go well past the noon hour to provide us 
with your testimony.
    We will no doubt be in touch with your further, and there 
will be lots more discussion before we get to where we have to 
cross the creek, but we wish you well, Mr. Warrington, and we 
will be there to help you as we can. Thank you very much.
    Mr. Warrington. Thank you, Mr. Chairman.
    Mr. Rogers. The meeting is adjourned.


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                           W I T N E S S E S

                              ----------                              
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Brigham, E.A.....................................................   349
Mead, K.M........................................................     1
Scheinberg, P.F..................................................     1
Warrington, G.D..................................................     1


                               I N D E X

                               __________

                 Federal Railroad Administration (FRA)

                                                                   Page
Accident Rates:
    Class I......................................................   679
    Class II.....................................................   680
Accident Trends..................................................   711
Accident and Fatalities, Current FY 2001 Grade Crossing..........   581
Accidents:
    SACP and Root Causes of......................................   590
    Train........................................................   701
    Train........................................................   710
    Fatalities Grade Crossing Trespasser.........................   580
    Injuries, Employee...........................................   694
Advanced:
    Train Demonstration--Cost of Train Set.......................   598
    Train Demonstration--Industry Support........................   599
Alaska PTC Project, Status of....................................   637
Alaska Railroad FY 1996-2001 Obligations/Expenditures............   649
ALPS:
    Non-Electric Locomotive, Integration of......................   623
    Status of....................................................   623
Amtrak:
    Request for High Speed Rail Bonding Proposal.................   542
    Work to Expedite Tunnel Safety Repairs.......................   616
    Impact of Bond Bill on FY 2002 Request.......................   542
    NECIP Unobligated Balances...................................   678
    As Issuers of Bonds..........................................   905
    Cash and Drug Seizures.......................................   905
    DEA--Length of Joint Effort on Drug Policy...................   904
    DEA Joint Effort On Drug Policy..............................   904
    Drug Funds vs Federal Assistance.............................   905
    Survial Without Bond Bill in FY 2002.........................   544
    Use and Amount of Drug Assets................................   905
Arizona Accident, Impact on Rail Security........................   602
Authorized FTES and Onboard Personnel............................   666
California Corridor..............................................   526
Casualties--Employee on Duty Injuries/Casualties.................   693
Casualty Rates, Employee.........................................   692
Chicago Hub Network--Midwest Regional Rail Initiative............   528
Civil Penalty:
    Collections, FY 1997-2001....................................   714
    Trends.......................................................   714
Communications Testing at the TTC................................   644
Completed Rulemakings............................................   726
Consulting Services Funds, FY 2002...............................   764
Crashworthiness:
    R&D..........................................................   596
    R&D, Cost of.................................................   597
    R&D, Results From............................................   597
Derailments:
    Actions to Solve.............................................   547
    FY 2002 Activities Addressing................................   548
    Train........................................................   545
Detroit to Chicago Train Control Project:
    Cost Sharing.................................................   618
    FY 2002 Work.................................................   618
    Impact of No Funding.........................................   619
EIS Support:
    Base Funding For.............................................   669
    Rulemakings Requiring........................................   669
Empire Corridor: New York City--Albany-Buffalo, New York.........   536
Employee Accidents/Injuries......................................   694
Employee Casualty Rates..........................................   692
Enforcement Backlog, Status of...................................   763
Enforcement Cases:
    By Class of Railroad.........................................   762
    Processed, FY 1998-2000......................................   762
Environmental:
    Analysts Positions...........................................   665
    Support, Funding for.........................................   668
Federal/State Inspection Resources...............................   681
Final and Proposed Regulations...................................   727
Fire and Safety Repairs and Penn Station Project, Coordination of   615
Florida Corridor.................................................   536
FRA:
    As Possible Issuers of Bonds.................................   542
    Concern Regarding Penn Station Tunnel Repairs................   615
    Consulting Services..........................................   764
    Key Safety Rulemaking........................................   725
    OLI Efforts to Increase State Participation..................   583
    Reimbursables................................................   673
    Impact of Department's IT Initiatives on IT Program..........   589
    OST/OMB Request and Passback for S&E.........................   524
    OST/OMB Request and Passback Total...........................   524
    Wide IT Initiative, Problems/Delays With.....................   589
Funding:
    Operation Respond............................................   767
    Environmental Support........................................   668
FY 1996-2000 Safety Trends.......................................   685
FY 1996-2001 Safety Workforce....................................   683
FY 2000 Allocation of TEA-21--Grade Crossing Funds...............   553
FY 2000 Safety Inspections.......................................   685
FY 2000-2001 Grade Crossing Funding/Projects.....................   562
FY 2001 Allocation of TEA-21--Grade Crossing Funds...............   555
FY 2001 Reduction in IT Funding..................................   589
FY 2001-2002 Initiatives to Reduce Grade Crossing/Trespasser 
  Fatalities.....................................................   558
FY 2001-2002 R&D Projects........................................   603
FY 2002 Activities Addressing Derailments........................   548
FY 2002 Annualization of FTES....................................   651
FY 2002 Consulting Services Funds................................   764
Grade Crossing:
    Accidents/Fatalities and Trespasser Fatalities...............   575
    Ten Most Deadly Crossing Report..............................   552
    Accidents and Fatalities, Current FY 2001....................   581
    Activities...................................................   586
    Collisions...................................................   577
    Fatalities by State..........................................   575
    Funding, FY 2002.............................................   569
    Hazard Mitigation............................................   625
    Positions....................................................   652
    Staffing, DOT................................................   655
    Trespasser Accidents/Fatalities..............................   580
    Trespasser Fatalities, Initiatives to Reduce.................   558
    Closed Public by State.......................................   573
    Top 16 States with Most Grade Crossing Accidents.............   570
    Total Closed at-Grade Crossings (Public and Private) by State   574
    Closed in Past Three Years...................................   571
GSA Rental Payment Increase......................................   670
Gulf Coast Corridor (Louisiana, Mississippi, Alabama, Georgia, 
  Texas).........................................................   532
Hazardous Material:
    Accidents....................................................   687
    Accidents/Incidents..........................................   689
High Speed Rail:
    Corridor Planning--FY 2002 Activities........................   630
    Attracting Riders............................................   541
    Bonding Proposal.............................................   543
    Bonding Proposal And Amtrak Request..........................   542
    Rail Hurdles.................................................   539
    Status of Outside of NEC.....................................   525
    Corridor Planning--FY 2001 Activities........................   630
    States Affording High-Speed without Bond Bill................   540
Hours of Service:
    Recommendation, NTSB.........................................   720
    Rules Revision...............................................   721
    Rules........................................................   718
HSR:
    Keystone Corridor............................................   538
    Tax-Exempt Private Activity Bonds vs HSR Bonds...............   544
Illinois--Chicago Hub Network: Chicago--St. Louis Spoke..........   529
Illinois PTC--Old/New Schedule and Budget........................   641
Illinois PTC Project:
    Completion of Signaling system...............................   640
    Demonstration Date...........................................   641
    Impact of Shift in Funds.....................................   640
    Problems.....................................................   638
    System Testing Date..........................................   641
    Funding......................................................   642
    PTC Project, State Match for.................................   643
Initiatives to Reduce Grade Crossing/Trespasser Fatalities.......   558
Inspection Data..................................................   682
Inspections, Safety--FY 2002.....................................   685
Inspectors:
    Vacancy Rate.................................................   664
    Authorized/On Board..........................................   682
    Why More.....................................................   663
Integration of Alps and Non-Electric Locomotive..................   623
IT Funding, FY 2001 Reduction in.................................   589
IT Program:
    Impact of Department's IT Initiatives on FRA's...............   589
    Cost and Schedule............................................   588
IT Support.......................................................   587
Keystone Corridor................................................   538
Light Rail Operations--Shared Track..............................   658
Light Rail Operations............................................   661
Link Between Illinois and other PTC Projects.....................   643
Locomotive Horn Noise, Options in Alleviating....................   901
Locomotive Horn Rule, Status of..................................   723
Low-Speed Maglev Projects, Status of.............................   635
Maglev Funding, FY 2002..........................................   635
Maglev:
    Status of Low Speed Projects.................................   635
    Status of Selected Projects..................................   631
Marshall/Nebraska R&D Project....................................   599
Michigan Train Control Project, Status of........................   617
MP &E Positions..................................................   656
NECIP Unobligated Balances.......................................   678
Non-Electric High-Speed Locomotive, Total Investment in..........   621
Non-Electric Locomotive:
    FY 2002 Funding..............................................   622
    Production Schedule..........................................   620
    Project Status/Problems......................................   620
    State/Railroad Interest in...................................   622
    Integration of ALPS and......................................   623
    Completion of Demonstration..................................   621
North Carolina...................................................   534
Northern New England Corridor....................................   539
NTSB:
    Hours of Service Recommendation..............................   720
    Recommendations, Status of...................................   767
    Voice Recorder Recommendations...............................   897
Number of Committees Imposing Whistle Bans.......................   900
Operating Practices Positions....................................   651
Operation Lifesaver, FY 2002 Funding.............................   581
Operation Respond:
    Funding Request For FY 2002..................................   766
    Funding......................................................   767
Cost/Benefits/Status of..........................................   765
Opposition to User Fee Proposal..................................   645
Options in Alleviating Locomotive Horn Noise.....................   901
OST/OMB Request:
    Passback for S&E.............................................   524
    Passback Total...............................................   524
Pacific Northwest Corridor (Washington and Oregon)...............   525
Penn Station:
    Funding, Status of...........................................   613
    Project, Actions Needed to Complete..........................   613
    Project, Construction Schedule of............................   614
    Project, Coordination of Fire and Safety Repairs.............   615
    Project, Current Cost Estimate of............................   611
Pennsylvania Station TIFIA Loan..................................   612
Political Appointees.............................................   666
Positions:
    MP&E.........................................................   656
    New Requested................................................   650
    Operating Practices..........................................   651
    Operations Research Analysis.................................   662
Positive Train Control Technologies..............................   644
Problems/Delays With FRA-Wide IT Initiative......................   589
Projected Unobligated Balances...................................   674
PTC:
    Chicago Hub Network: Chicago--St. Louis Spoke................   529
    Illinois Completion of Signaling System......................   640
    Illinois Impact of Shift in Funds............................   640
    Illinois Old/New Schedule and Budget.........................   641
    Illinois Project--Demonstration Date.........................   641
    Illinois Project Funding.....................................   642
    Illinois Project System Testing Date.........................   641
    Link Between Illinois and other Projects.....................   643
    No Funding for Detroit to Chicago Train Control Project......   619
    Problems with Illinois Project...............................   638
    Status of Michigan Train Control Project.....................   617
    On HSR Corridors, Cost of....................................   636
State Match for Illinois Project.................................   643
R&D:
    Crashworthiness..............................................   596
    Crashworthiness, Cost of.....................................   597
    Cost Sharing.................................................   646
    Marshall/Nebraska Project....................................   599
    Projects, FY 2001-2002.......................................   603
    University of Alabama and the University of Missouri Project.   600
Rail:
    Fatalities...................................................   706
    Security, Impact of Arizona Accident on......................   602
    User Fees, Why...............................................   645
Railroad Systems and Infrastructure Security Funding.............   601
Reduction in IT Funding, FY 2001.................................   589
Regulations, Final and Proposed..................................   727
Regulatory Backlog...............................................   728
Rent Payment Increase, GSA.......................................   670
Requested New Positions..........................................   650
Results From:
    Crashworthiness R&D..........................................   597
    Crashworthiness R&D..........................................   597
    Proposed Locomotive Horn Rule................................   898
Rhode Island Rail:
    Project, Status of...........................................   610
    Unobligated Balance..........................................   611
RRIF:
    Funds--Type of Railroads Receiving Awards....................   550
    Program--Amtrak Eligibility..................................   551
    Program--Non Railroad Contributions..........................   551
    Program......................................................   550
    Program, Status of...........................................   549
    Program, Support for.........................................   549
RSAC, Workload of................................................   715
TRL:
    Trainsets, Status of Remanufacturing Remaining...............   625
    Non-Electric Trainsets, Status of............................   624
Rulemaking:
    Timetable to Finalize Locomotive Horn Rule...................   903
    NTSB Hours Of Service Recommendation.........................   720
    Hours of Service Rules Revision..............................   721
    Status of Locomotive Horn Rule...............................   723
Rulemakings:
    Requiring EIS Support........................................   669
    Completed....................................................   726
    FRA Key Safety...............................................   725
SACP:
    Root Causes of Train Accidents...............................   590
    Participants and Results.....................................   595
Safety & Operations:
    Advisory & Assistance Services Increase......................   672
    Equipment Increases..........................................   672
    Grant Cost Increases.........................................   673
    Increase in Communications...................................   671
    Personnel Benefits Increases.................................   670
Safety Inspection Data...........................................   682
Safety Inspections:
    FY 2000......................................................   685
    FY 2002......................................................   685
Safety Inspectors:
    Vacancy Rate.................................................   664
    Authorized/On Board..........................................   682
Safety:
    Partnerships, Actions to Enhance.............................   594
    Trends, FY 1996-2000.........................................   685
    Workforce, FY 1996-2001......................................   683
Sealed Corridor:
    Funding, Use and Benefits of.................................   627
    Initiative-Future Funding....................................   629
    Project, Completion Date for Entire..........................   628
    Technologies, Use of.........................................   629
    Charlotte to Greensboro Segment, Completion Date of..........   627
Selected Maglev Projects, Status of..............................   631
South Central Corridor (Texas, Oklahoma, Arkansas)...............   539
Southeast:
    Corridor Extensions..........................................   535
    Corridor.....................................................   533
Spend out of Unobligated Balances................................   676
State:
    Match for Illinois PTC Project...............................   643
    Participation................................................   684
    Railroad Interest in Non-Electric Locomotive Project.........   622
States Affording High-Speed Rail without Bond Bill...............   540
Support for RRIF Program.........................................   549
TASC Costs.......................................................   712
Tax-Exempt Private Activity Bonds vs HSR Bonds...................   544
TEA-21:
    Funds, Allocation of.........................................   556
    Funds, Allocation of.........................................   557
    Alllocation of FY 2000 Grade Crossing Funds..................   553
    Allocation of FY 2001 Grade Crossing Funds...................   555
Ten Most Deadly Crossing Report..................................   552
TIFIA Loan, Pennsylvania Station.................................   612
Timetable to Finalize Locomotive Horn Rule.......................   903
Train Accidents..................................................   701
Train Accidents..................................................   710
Train Accidents, SACP and Root Causes of.........................   590
Trends in Derailments............................................   545
Trespassing--Leading Cause of Railroad Fatalities................   562
Tunnel Safety Repairs:
    Biggest Challenges in Expediting.............................   616
    Work to Expedite.............................................   616
Union Station Bill Language......................................   669
University of Alabama and the University of Missouri R&D Project.   600
Unobligated Balance
    Rhode Island Rail............................................   611
    Projected....................................................   674
    Spend out of.................................................   676
Use and Benefits of Sealed Corridor Funding......................   627
Use of:
    Maglev Funds for 5 Projects Not Advanced.....................   634
    Sealed Corridor Technologies.................................   629
User Fee Proposal, Opposition to.................................   645
User Fees:
    Double Tax...................................................   649
    Why..........................................................   645
Voice Recorder Recommendations, NTSB.............................   897
West Virginia Rail Development:
    Future Work..................................................   609
    Unobligated Balance..........................................   609
    Project, Status of...........................................   608
Whistle Bans, Number of Committees Imposing......................   900
Workload of RSAC.................................................   715

            National Railroad Passenger Corporation (AMTRAK)

Accidents........................................................11, 17
    Iowa Accident on Burlington Northern Santa Fe Track..........    57
Actual and Budgeting Operating Salaries..........................   300
Actual vs Budget Revenue.........................................   277
Administration Request...........................................   148
Administrative and Staffing Cost.................................   325
Alstom...........................................................   273
Alternative Transportation.......................................   109
Amtrak Reform Council (ARC)......................................   155
    ARC recommendations..........................................   122
    ARC Report...............................................88,124,127
Amtrak's Business Plan...........................................   112
Amtrak's Financial Performance and Requirements..................    12
Amtrak's Financial Results.......................................     3
Amtrak's Long Term Vision and Capital Investment Needs...........   134
Amtrak's Operating and Cash Losses............................7, 13, 18
Amtrak's Safety Record...........................................     5
Available Cash...................................................   283
Biographies:
    Mead, Kenneth M. (Inspector General, DOT)....................    39
    Scheinberg, Phyllis (US General Accounting Office)...........    56
    Warrington, George D. (Amtrak)...............................    71
Bonds, High Speed Rail...........................................   114
Border Crossing Relief...........................................   147
Budget Gap.......................................................   150
Business Plan, Amtrak's..........................................   112
    Strategic....................................................   113
Business Plan Actions by Business Unit...........................   208
Capital Funding Needs............................................     4
Capital Grant Request, Fiscal Year 2002..........................   111
Capital Needs..................................................225, 232
    For Maintenance of Equipment.................................   226
    For Northeast Corridor.......................................   248
Capital Program by Project.......................................   227
Capital Sources and Uses by Category.............................   190
Cars.............................................................   308
Composition of Total Operating Revenue...........................    21
Commuter Service Revenues by Route, Location.....................   276
Condemnation of Common Stock.....................................   145
Contracts With Freight Railroads.................................   287
Corridors:
    High Speed Rail..............................................    99
    Northeast....................................................   240
    Northeast High Speed Rail....................................    97
    State Contributions for High Speed Rail Projects.............   144
Cost Management Program...................................182, 183, 184
Customer Satisfaction Index Result...............................    25
Dobbs International Service......................................   270
Dynamex..........................................................   272
Electrification..................................................   239
Employment.......................................................   321
Equipment........................................................   301
Excess RRTA......................................................   144
Expenses.........................................................   322
Expense per Passenger Mile.......................................   284
Express Mail.....................................................   267
Express Trak.....................................................   272
Federal Authorizations vs. Appropriations for Amtrak.............   153
Federal Capital Subsidies........................................    80
Federal Funding..................................................   286
Federal Operating Support........................................   209
Federal, State, Local and Private Capital Funding................   229
Federal Support for Operations...................................   204
Financial History................................................   285
Financial Performance of Scheduled Amtrak Routes.................   160
    Excluding Depreciation.......................................   162
Fiscal Year 2002 Capital Grant Request...........................   111
Fleet Efficiencies...............................................   112
Flexibility for States...........................................   143
General Accounting Offices.......................................    43
    Summary......................................................    44
    Background...................................................    45
    Congress is Facing Critical Passenger Rail Decisions.........    48
    The Public Benefits of Intercity Passenger Rail Need to Be 
      Examined...................................................    51
    Public Benefits and Financial Goals Affect the Scope of 
      Intercity Passenger Rail Systems...........................    54
Glide Path.......................................................   151
Growth Infrastructure Investment.................................   189
Growth in Interest Expense...................................10, 14, 23
Guaranteed Revenues for Amtrak...................................    77
Hertz Corporation................................................   273
High Speed Rail:
    Bonds........................................................   114
    Corridors....................................................    99
    Delays.......................................................   233
    Investment Act..........................116, 119, 120,142, 192, 254
    Northeast Corridor...........................................    97
Intercity........................................................   316
Iowa Accident....................................................    57
Labor Protection.................................................   264
Letter to Harold Rogers, George D. Warrington....................   128
Life Safety Needs in Penn Station..............................255, 257
Litigation, Removal from State to Federal Courts.................   146
Losses:
    Operating and Cash........................................7, 13, 18
Mail and Express Service.........................................    73
    Express......................................................   267
    Monthly Revenues.............................................   179
    Revenues.....................................................   178
Maintenance......................................................   309
    State by State...............................................   312
Mandatory Projects...............................................   231
Market Based Analysis............................................   197
Market Share of Air-Rail Intercity Travel........................   296
MBNA Routes....................................................199, 200
Mead, Kenneth M. biography.......................................    39
Meeting the Test for Operational Self Sufficiency................   132
Motorola's Worldwide Smartcard Solutions Division................   273
National Railroad Passenger Corporation TRA Funding Source by 
  C.A.R..........................................................   213
National Railroad System.........................................    84
Non-Core Revenue.................................................   191
Northeast Corridor.............................................240, 314
    Capital Needs for............................................   248
Northeast Corridor High Speed Rail...............................    97
    Implementation...............................................     4
NTSB Recommendations.............................................   335
On-time Performance..............................................    25
Opening Remarks:
    Mr. Rogers (Chairman)........................................     1
    Kenneth Mead (Inspector General).............................     2
    George D. Warrington (Amtrak)................................    57
    General Accounting Office....................................    41
Operational Self Sufficiency........................3, 72, 92, 105, 108
    Meeting the Test for.........................................   132
    Plan.........................................................    75
Operating Statistics.............................................   305
Passenger and Non-Passenger Revenues............................. 9, 14
Passenger Cars and Locomotive Fleet..............................   307
Passenger Train Priority Enforcement.............................   145
Penn Station.....................................................    96
    Life Safety Needs..........................................255, 257
Performance Highlights...........................................   159
Planned Distribution of Capital for Maintenance and Progressive 
  Overhauls......................................................   226
Questions for the Record From Chairman Rogers....................   136
Rail Capital Spending as a Share of Total Transportation Capital 
  Spending.......................................................    90
Rail Passenger Subsidies.........................................   121
Railroad, National System........................................    84
Railroad Retirement Board........................................   342
Railroad Retirement System.......................................   340
Removal of Litigation from State to Federal Court................   146
Restructured National Intercity Passenger Rail...................   103
Revenues..........................................8, 9, 13, 14, 20, 270
    Guaranteed for Amtrak........................................    77
    Mail.........................................................   180
    Mail and Express Service.....................................   178
    Monthly Mail and Express Service.............................   179
Rhode Island Rail................................................   262
Ridership................................................8, 13, 20, 289
    By State.....................................................   294
    Corridors....................................................    73
    On Eastern Corridor..........................................    73
    Revenue Data.................................................   291
Routes...........................................................   297
    Financial Performance of Scheduled...........................   298
Scheinberg, Phyllis..............................................    56
Sources of Capital...............................................   188
Staffing.........................................................   299
State Contributions..............................................   277
State Contributions for High Speed Rail Corridor Projects........   144
Statements of George Warrington before the Sub Committee on 
  Transportation.................................................    61
Stock Value......................................................   165
Strategic Business Plan..........................................   113
Subsidies........................................................    80
    Rail Passenger...............................................   121
Systemwide Passenger Revenue and Ridership Growth.............8, 13, 20
Tax Exemption for Amtrak Leased Lines............................   212
Taxpayer Relief Act..............................................   212
Terminal and Mechanical Costs....................................   112
Train Accidents per Million Train Miles..........................11, 17
Train Delays.....................................................   288
Undefined Business Actions.......................................   113
United Parcel Service............................................   271
United States Postal Service.....................................   271
Warrington, George D.............................................
    Biography....................................................    71
    Letter to Harold Rogers......................................   128
    Opening Statement............................................    57
    Statements Before Transportation Subcommittee................    61
West.............................................................   316
Whole Sale Purchase of Electric Power............................   144
Working Capital Ratio............................................    23

          Research and Special Programs Administration (RSPA)

Advanced Vehicle Technology Program..............................   373
Agency Mission and Responsibility................................   376
Biography of Edward A. Brigham...................................   369
Budget and Administrative Issues:
    Political Appointees.........................................   497
    Reprogramming................................................   489
    Staffing.....................................................   493
    Training Expenses............................................   486
    Travel Per FTE...............................................   485
    Unobligated Balances.........................................   485
Budget Request...................................................   351
Crisis Management Center.........................................   515
Damage Prevention Grants.......................................378, 380
Damage Prevention Grants and Changes in 2002 Budget..............   407
Emergency Preparedness...........................................   352
Emergency Preparedness Funds Receipts..........................456, 480
Emergency Preparedness Grants....................................   456
Emergency Transportation:
    Crisis Management Center.....................................   515
Engine Noise Research............................................   521
Federal Gas Pipeline Safety Program..............................   410
Federal Transportation Research..................................   352
Hazardous Liquid Pipelines.......................................   416
Hazardous Materials Inspections/Incidents........................   479
Hazardous Materials Safety.......................................   351
Hazardous Materials Safety:
    Emergency Preparedness Funds Receipts......................456, 480
    Emergency Preparedness Grants................................   456
    Hazardous Materials Inspections/Incidents....................   479
    Hazardous Materials Staffing.................................   375
    Hazardous Materials User Fee Proposal......................370, 373
    Office of Intermodalism Review of Hazardous Materials Program   522
    Rulemakings and Recommendations..............................   461
    Vacancies....................................................   495
Hazardous Materials Staffing.....................................   375
Hazardous Materials User Fee Proposal..........................370, 373
Office of Intermodalism Review of Hazardous Materials Program....   522
Opening Remarks..................................................   349
Pipeline Activities..............................................   520
Pipeline Enforcement Actions--Civil Penalties..................382, 384
Pipeline Safety..................................................   351
Pipeline Safety:
    Damage Prevention Grants...................................378, 380
    Damage Prevention Grants and Changes in 2002 Budget..........   407
    Federal Gas Pipeline Safety Program..........................   410
    Hazardous Liquid Pipelines...................................   416
    Pipeline Activities..........................................   520
    Pipeline Enforcement Actions--Civil Penalties..............382, 384
    Pipeline Safety Causes of Incidents..........................   403
    Pipeline Safety Civil Penalties and Fines....................   438
    Pipeline Safety Common Ground................................   410
    Pipeline Safety In-Line Inspection Technologies..............   403
    Pipeline Safety Inspectors/Inspections.....................387, 414
    Pipeline Safety National Mapping Program...................388, 390
    Pipeline Safety Oil Pollution Act............................   435
    Pipeline Safety One-Call Program.............................   405
    Pipeline Safety Reserve Fund.................................   405
    Pipeline Safety Risk Management Initiative.................396, 399
    Pipeline Safety Rulemaking and Recommendations...............   442
    Pipeline Safety Staffing...................................393, 394
    Pipeline Safety User Fees..................................382, 433
    Pipeline Vulnerability Study.................................   391
Pipeline Safety Causes of Incidents..............................   403
Pipeline Safety Civil Penalties and Fines........................   438
Pipeline Safety Common Ground....................................   410
Pipeline Safety In-Line Inspection Technologies..................   403
Pipeline Safety Inspectors/Inspections.........................387, 414
Pipeline Safety National Mapping Program.......................388, 390
Pipeline Safety Oil Pollution Act................................   435
Pipeline Safety One-Call Program.................................   405
Pipeline Safety Reserve Fund.....................................   405
Pipeline Safety Risk Management Initiative.....................396, 399
Pipeline Safety Rulemaking and Recommendations...................   442
Pipeline Safety Staffing.......................................393, 394
Pipeline Safety User Fees......................................382, 433
Pipeline Vulnerability Study.....................................   391
Political Appointees.............................................   497
Prepared Statement...............................................   354
Program Support Resources........................................   352
Reprogramming....................................................   489
Research Coordination............................................   349
Research and Technology:
    Advanced Vehicle Technology Program..........................   373
    Engine Noise Research........................................   521
    Research Coordination........................................   349
    Research and Technology Funding Activities...................   449
    Terorist Response Research...................................   376
    Transportation Infrastructure Research.....................377, 451
Research and Technology Funding Activities.......................   449
Response to NTSB Recommendations.................................   371
Rulemakings and Recommendations..................................   461
RSPA Opening Statement:
    Budget Request...............................................   351
    Emergency Preparedness.......................................   352
    Federal Transportation Research..............................   352
    Hazardous Materials Safety...................................   351
    Pipeline Safety..............................................   351
    Prepared Statement...........................................   354
    Program Support Resources....................................   352
Staffing.........................................................   493
Terrorist Response Research......................................   376
Training Expresnes...............................................   486
Transportation Infrastructure Research.........................377, 451
Transportation Safety Institute................................501, 517
Travel Per FTE...................................................   485
Unobligated Balances.............................................   485
Vacancies........................................................   495
Volpe Center.....................................................   502

                                
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