Bush to Help Amtrack, says Torricelli

Transport Topics ^ | 6-24-2002

[gjpino]

Bush Administration to Help Amtrak, Torricelli Says

Sen. Robert Torricelli, D-N.J., said Monday afternoon Transportation Secretary Norman Mineta has assured him the Bush administration will help resolve Amtrak's financial crisis and prevent a shutdown, the Associated Press reported.

An Amtrak spokesman told Transport Topics the nation's passenger railroad derives more than $140 million a year from hauling mail and express freight. While there is some competition between Amtrak and trucks, there are also business partnerships between the railroad and most major less-than-truckload carriers.

In case of a shutdown, that freight would probably move to the highways, along with rail passengers, who would likely turn to their cars for transportation.

Mineta has called Amtrak’s board of directors to an emergency meeting for Monday in response to congressional warnings that inaction in the face of a shutdown threat could throw the New York region into chaos, AP said.

Amtrak President David Gunn recently said he would begin a shutdown of the railroad by the middle of this week if it could not obtain $200 million in financing.

Mineta said one option would be an emergency appropriation of $200 million from Congress, which controls the federal purse strings.

Sens. Charles Schumer of New York and Torricelli and Jon Corzine of New Jersey, all Democrats, said Sunday that the crisis could be easily averted, AP said.

At a news conference in New York’s Pennsylvania Station, Torricelli said the problem threatens the economic infrastructure.

Mineta has also asked Congress to be prepared to take action on financing options if necessary for Amtrak.

Speaking on a television program, House Speaker Dennis Hastert did not say what Congress might do, but did criticize Amtrak for failing to correct money-losing policies, AP said.

Amtrak has not been able to obtain credit from its banks because of its poor financial condition, Reuters said.

By Transport Topics

[Rodney King]

It's a matter of economic survival for the already hard hit tri-state area. Amtrak owns all tracks and switches going into Penn Station. In addition to shutting down Amtrak's own trains they would also be shutting down seven New Jersey Transit commuter lines from throughout the state as well as the Long Island Railroad lines

It shouldn't be the case. So long as Amtrak is renting that capacity out profitably, a judge would allow them to continue doing so in bankruptcy.

[hobbes1]

Yes, it does. HOWEVER.....ALL OF THE MONEY that the FED puts into hiways comes from Highway USERS....not so the billions it doles out to airlines....Apples NE Oranges.

[Mr. Bird]

Shut it down. Sure, a bit of chaos would ensue, but it beats pumping air into an already-blown tire. Opportunity is knocking at the door, and the US government keeps wondering what that noise is.....

[gjpino]

Get mad, just don't call W any names. Or you shall be banned.

[Austin Willard Wright]

If your theory is true, the airlines should have responded to deregulation in the 1970s by raising ticket prices but they didn't. Why not? Competition (including lifting the prohibition on foreign competion) is the way to bring lower prices. One could also ask why the unsubsidized Federal Express is able to undercut the heavily subsidized U.S. postal service.

One should also mention that airport privatization (including the outmoded traffic control system) will also attract new business by making airports more efficient and safer. Heathrow is an excellent example of a successful, relatively secure and quite efficient privatized airport.

[Austin Willard Wright]

P.S. Your question about United is not hard to answer. Inefficient enterprises exist in every sector of the economy and are always trying to get a free ride from the taxpayer to bail them out. Airlines are certainly not an exception to this general rule.

[Darth Sidious]

Swell... just swell. Keep funding something the government never had any business running anyway.

Between this and keeping pilots unarmed, Bush seems hellbent on single-handedly destroying safe transportation in America.

[E. Pluribus Unum]

Get mad, just don't call W any names. Or you shall be banned.

I would never think of calling Dubya a conniving opportunist who would say anything to get elected. Even though it IS true.

[Lazamataz]

I wonder if Al Gore would be trowing away our money at a faster pace thatn Dubya?

You are not permitted to have that opinion. Get back into ranks.

[hobbes1]

But you seem to posit from a bottomless price theory. the simple fact of the matrter is, The Price of Jet Fuel, puts a definitive bottom on Airline ticket prices....

[WhiteGuy]

Sell amtrak, for what ever can be gotten.....

give the money to the taxpayers.

As a matter of fact, since amtrak is a failure, I'd like a refund

[myrabach]

Actually, its the upper end managment of Amtrack that needs to be held accountable for this mess. They have been riding the gravy train for quite awhile now. I mean -- would you balance your budget knowing that you could spend, spend, spend, and at the end of the year, as you were running deep into the red, you could just hold out your hand and there was this endless well of new found money? Amtrack was to be independent by 2002, and what was the incentive to do that? So we play the blame game, blame the government for giving them money? NO, blame the ones in charge who refused to to run the company in a responsible and honorable manner. But hey, isnt' that what we have come to expect? And, when they have failed to be accountable, then blame the hand that feeds them.

Its truly sad the people who lost their jobs so far over this, but even more sad are the people who KEPT their jobs. Ummm you know, quotas and all, you catch the drift. And the ones who drove the company into financial chaos? Oh yes, you can bet they are still employed... and those union folks? Nope, they have lost their jobs and get to share the blame as well.

[Alberta's Child]

As far as I know, Stewart International Airport in Orange County, New York is the only major airport in the U.S. that is privately-owned. I'm not sure how "profitable" it is, but I'm willing to bet that the British company that purchased it picked it up for peanuts because it was a de-commissioned Air Force base.

[freeperfromnj]

In the last several weeks we have seen low interest home loans, aid to Africa, Department of Education etc. etc... For Tuesday I am betting he proposes Ten Billion for a national healthcare insurance for house pets.

Considering that he's been giving away the store any way (to the tune of billions of dollars), I don't see how throwing another $200 million in the form of a government backed loan is going to make much more of a difference. The economic losses would end up costing about as much if they shut down. Privatization is the way to go.

[sinkspur]

One could also ask why the unsubsidized Federal Express is able to undercut the heavily subsidized U.S. postal service.

FedEx uses the heavily subsidized airport system. Amtrak has to maintain all of its own infrastructure; none of the airlines put a thin dime into maintaining runways, airport terminals, or air traffic control.

Amtrak will never be able to operate profitably, nor does any other passenger railroad system in the entire world.

Who's going to buy the baggage screening machines mandated by the government? Not the airlines, that's for sure.

[Willie Green]

You are not permitted to have that opinion. Get back into ranks.

Hmmmmph. You should talk.
This thread is about a REAL Issue.
Get back to that 2000+ reply picayune, snippity gripe, gossip thread that's going on.
Don't need that stuff spilling over into here.

[Austin Willard Wright]

If FedEx benefits from subsidized airlines, then this would mean that it should not be able to compete with the subsidized USPS which also benefits from shipping on subsidized airlines....yet it does. How can this be?

[Austin Willard Wright]

Not at all. I am just arguing that government subsidies can (and often do) lead to inefficiency, cosy protectionism, and higher prices. You seem to be assuming that subsidies always equal lower prices. They can under certain circumstances but this has certainly not be the historical case for airlines.

[sinkspur]

If FedEx benefits from subsidized airlines, then this would mean that it should not be able to compete with the subsidized USPS which also benefits from shipping on subsidized airlines....yet it does. How can this be?

The USPS has other problems, to be sure.

My point is that FedEx, by using subsidized airports, is, in fact, subsidized.

[Austin Willard Wright]

That is certainly true...though these subsidies (even for FedEx) come with a price tag e.g. inefficient and unreliable operation of the airlines encouraged by the subsidies. Shippers (such as FedEx which depends on fast delivery) also suffer from the byproducts of this inefficiency.

Heathrow (which included privatized air lanes and air traffic control) is a very well run airport and, in my respects, serves customers far better than antiquated government-owned American airports.....hence it reaps the benefits of freedom despite the loss of subsidies.