[Congressional Record (Bound Edition), Volume 147 (2001), Part 16]
[Senate]
[Pages 22816-22817]
[From the U.S. Government Publishing Office, www.gpo.gov]



                     AMTRAK REFORM COUNCIL FINDING

  Mr. McCAIN. Mr. President, I want to explain for the benefit of my 
colleagues some recent actions that involve Amtrak. I will begin, 
however, by briefly describing Amtrak's history.
  Amtrak was created in 1971 by the Rail Passenger Service Act which 
was enacted in 1970. The law established Amtrak in order to relieve the 
freight railroad industry from the burden of providing ongoing 
passenger service. With capital acquired from participating railroads 
and the Federal Government providing $40 million in direct grants and 
another $100 million in loan guarantees, the corporation was to become 
self-sustaining within 2 years. Since 1971, however, Amtrak has 
received nearly $24 billion in taxpayer assistance to help cover its 
operating and capital costs.
  Today, much like when Amtrak started, Amtrak serves approximately 500 
locations. It carried 22.5 million passengers in fiscal year 2000. By 
contrast, the intercity bus industry carries 744 million passengers 
annually and serves over 4,000 locations. The aviation industry carries 
more than 600 million passengers annually. I mention this comparison 
because I believe we must consider Amtrak in the context of other 
passenger carrying transportation services.
  Amtrak was most recently authorized during the 105th Congress, after 
several years without an authorization. The Amtrak Reform and 
Accountability Act, Public Law 105-134, was bipartisan compromise 
legislation and enacted, in part, due to the very critical reports of 
Amtrak's financial situation at that time. During the act's 
development, the General Accounting Office, Amtrak, and others 
estimated that the rail system was on the brink of bankruptcy.
  Taking into account the very serious financial situation facing 
Amtrak, the reform law provided the statutory operational, procurement, 
labor and liability reforms that Amtrak requested so it could operate 
more like a private business. It reauthorized Amtrak for 5 years, 
through fiscal year 2002, releasing the approximately $2.2 billion to

[[Page 22817]]

Amtrak that was provided in the form of a tax ``refund'' in the 
Taxpayer Relief Act of 1997, TRA, even though Amtrak has never earned a 
profit, let alone paid income tax. It also required Amtrak to operate 
free of taxpayer assistance 5 years after the date of enactment of the 
law, which is December 2, 2002.
  The law established an 11-member Amtrak Reform Council, ARC, 
appointed by the President and leadership in both the House and the 
Senate, to oversee Amtrak and make recommendations for improvements. 
The law provided that if at any time following 2 years after the date 
of enactment the ARC finds that Amtrak is not meeting its financial 
goals, the Council is directed to develop and submit within 90 days to 
Congress an action plan for a restructured and rationalized intercity 
rail passenger system. Within that same time period, the law directs 
Amtrak to prepare a plan for its complete liquidation. The law provides 
for an expedited procedure during which Congress would vote, simple 
majority, on a resolution to disapprove an Amtrak liquidation.
  What has Amtrak accomplished since the reform bill's enactment? 
Amtrak's press releases often boast about increased ridership and 
revenues. Unfortunately, those press releases never quite tell the full 
story. According to the General Accounting Office, any increase in 
ridership and revenues has resulted in an even greater increase in 
expenses.
  Moreover, Amtrak's debt load has tripled since the reform bill's 
enactment to over $3.3 billion and it has spent more than $4.4 billion 
in taxpayers dollars during that same period. And, despite repeated 
testimony by Amtrak officials this year about being on a ``glidepath to 
operational self-sufficiency,'' Amtrak entered into a creative 
agreement in June to mortgage a portion of Penn Station to obtain cash 
to allow Amtrak to continue operating past the summer. Clearly, our 
expectation for a new and improved Amtrak when we passed the reform 
bill in 1997 has not been realized.
  The Department of Transportation Inspector General and the General 
Accounting Office have testified repeatedly before Congress that Amtrak 
is in a very precarious financial situation. Moreover, last Friday, 
November 9, 2001, the ARC officially issued a finding that Amtrak will 
not be operationally self-sufficient by December 2, 2002, as required 
by law. The ARC has found there are major inherent flaws and weaknesses 
in Amtrak's institutional design and it must be restructured. As a 
result of this finding, the ARC will submit a restructuring plan and 
Amtrak will submit a liquidation plan to the Congress in early 
February. In addition, the administration, according to testimony from 
the Federal Railroad Administrator, is also preparing to submit a 
proposal to restructure our Nation's passenger rail system as part of 
its fiscal year 2003 budget request.
  I understand Amtrak and others have made some very critical comments 
about the ARC's decision. Clearly, it was a decision not taken lightly 
by the ARC members. I, for one, commend the ARC members for abiding by 
the law and making the tough decision that they felt needed to be made. 
I only question what took them so long.
  I look forward to a robust debate on the future of intercity rail 
passenger service in this country. I believe that passenger rail can 
and should be a part of our Nation's transportation system, but I 
continue to question how it should be structured and managed, knowing 
that Amtrak has failed to meet even the lowest of expectations for 30 
years.
  I find it indefensible that despite the findings of the ARC, the IG 
and the GAO, this week we were considering legislation that would have 
given another $9 billion to Amtrak by authorizing Amtrak to issue 
bonds. I imagine proponents of that provision will continue to seek 
enactment of their proposal prior to adjournment. I vow to do 
everything in my power to prevent such efforts from succeeding, as I 
strongly question the logic of throwing billions of additional dollars 
at Amtrak when nearly every expert that knows anything about Amtrak and 
finances knows, and has told Congress, that Amtrak cannot live up to 
the promises it makes.
  Before moving forward with any additional funding for Amtrak we need 
to address a number of tough questions: What is the future for 
intercity rail passenger transportation? Where does it attract 
passengers and where doesn't it? Does rail passenger service have to 
equate to ``Amtrak'' or should we finally accept the fact that after 30 
years, it is time to find a new approach? Where might high-speed rail 
service actually attract enough passengers to be economically viable? 
How does it fit into our national transportation system? What is the 
financial obligation we will be imposing on the American taxpayers and 
what can they realistically expect as a result of their expenditures?
  It is simply time to have an open and honest debate on this issue. We 
need to hear from the administration and the American public. I hope my 
colleagues will agree that we need to allow the debate on Amtrak's 
future to move forward and stop the hemorrhaging of taxpayers' dollars 
by this entity. I certainly intend to do all I can to ensure the Senate 
Commerce Committee, which has jurisdiction over Amtrak, steps up to the 
plate and does its part on this subject.

                          ____________________