[Congressional Record Volume 141, Number 96 (Tuesday, June 13, 1995)]
[House]
[Pages H5760-H5761]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                                 AMTRAK

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Colorado [Mr. Hefley] is recognized during 
morning business for 5 minutes.
  Mr. HEFLEY. Mr. Speaker, Congress is a master at creating Federal 
programs based on good intentions rather than sound economic sense and 
for which the tax becomes their lifeline for survival.
  Amtrak--the idea--was a good one. Amtrak was created in 1970 with a 
one-time grant of $40 million. It was a 2-year, Government-assisted 
program that would become an independent and self-sufficient operation.
  The reality, however, tells a different story. Amtrak has cost 
taxpayers over $15 billion since 1970. Although Amtrak carries only 0.3 
percent of all intercity travelers, it is the most highly subsidized 
form of intercity transportation. GAO figures indicate Amtrak could 
need as much as $10 billion over the next 5 years to maintain its 
current level of service.
  Since 1990 the Amtrak situation has gotten even worse. Between 1989 
and 1993 Amtrak lost an average of $706 million per year, and it's not 
going to get any better.
  Revenues have fallen well short of estimates for the last 4 years. In 
1994, Amtrak forecast revenues of $1.1 billion, while actual revenues 
were only $880 million, a difference of over $200 million.
  Since 1990, passenger revenues have fallen by 14 percent in real 
terms. The gap between revenues and expenses continue to grow.
  Why have the 1990's been so bad for Amtrak?
  Deterioration of tracks and trains--23 percent of Amtrak's cars are 
over 40 years old, and 70 percent of the cars are almost 20 years old. 
With shoddy track and old cars, Amtrak is not a comfortable way to 
travel. Increased accidents are causing people to question the safety 
of Amtrak, and rightfully so.
  Amtrak's labor structure is costing them a fortune. Their labor 
structure makes it darn near impossible for Amtrak to make a profit. 
Amtrak is required, by law, to have a 6-year severance package for 
displaced employees.
  This benefit gives them 6 years of pay equal to the rate they 
received while working. This constitutes a liability of over $2 
billion.
  In the cuts announced in December, Amtrak will be required to pay 
hundreds of millions of dollars to pay labor protections nobody else 
gets. Amtrak is renegotiating their contract with labor this year. 
Amtrak's wages paid could increase by about $200 million over a 5-year 
period.
  Increased competition with other modes of transportation. Most 
intercity trips are made by private vehicle. Cars account for about 80 
percent of total passenger miles. Falling gasoline prices encourage 
people to drive. [[Page H5761]] 
  Since 1990, the real price of unleaded gasoline has dropped by 10 
percent. With the increased fuel efficiency of today's cars, driving 
continues to be an inexpensive way to travel. Airline tickets and bus 
fare prices are falling as well.
  Increased dissatisfaction among Amtrak passengers. Volume of 
complaints has risen from 30,000 in 1989 to 70,000 in 1994. It is not 
totally uncommon for an Amtrak train to break down, and the passengers 
must walk to the nearest stop to catch the next train. It's no wonder 
people don't want to ride Amtrak.
  What's the answer? I've proposed legislation to privatize Amtrak by 
phasing out its taxpayer subsidies over a 4-year period and relieving 
it of its burdensome labor regulations and route requirements. My 
legislation would enable Amtrak's management to make decisions as in 
any private corporation.
  Slowly phases out subsidy. This year Amtrak will receive $972 million 
from the Federal Government. H.R. 259 will reduce the taxpayer subsidy 
to Amtrak by 25 percent each year for 4 years. This will phase out the 
Federal subsidies.
  Immediately eliminates congressional micromanagement. Amtrak is told 
by Congress how to operate and where to operate. H.R. 259 eliminates 
this meddling and allows Amtrak to focus its resources on its most 
promising routes, not the ones that Congress tells them to focus on.
  Immediately reduces excessive severance packages. Amends the Rail 
Labor Protection Act to reduce the current 6 year severance package to 
6 months. By freeing Amtrak from these excessive costs, they will be 
able to make the tough business decisions other managers are free to 
make.
  We face a critical decision this year. We can continue to increase 
our annual subsidies while ignoring Amtrak's fundamental problems, or 
we can enact necessary reforms to save Amtrak.


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