Amtrak CEO: Rail service will suffer under 2008 budget

Company is seeking $1.53 billion for fiscal 2008; administration has proposed $800 million, plus a matching program for capital improvements.

Amtrak would be forced to make drastic cuts in service if it had to live with the funding the White House proposed for fiscal 2008, Alexander Kummant, president and CEO of the rail passenger service, testified Wednesday.

"It would be very difficult to maintain an operation," he told the House Transportation-Housing and Urban Development Appropriations Subcommittee. Amtrak has asked for $1.53 billion for fiscal 2008, while the administration proposed to provide $800 million for the company, plus a $100 million matching program that would go to states for capital improvements.

"We'll have to see what happens," Transportation-HUD Appropriations Subcommittee Chairman John Olver, D-Mass., told reporters after the meeting, adding that in recent years, Congress has appropriated much more than the president has proposed.

During the hearing, Olver told his panel that the Bush administration's "unrealistic budget requests year after year -- and unworkable and potentially dangerous insistence on separating rail operations and infrastructure -- have made our efforts to improve intercity passenger rail all the more difficult."

Another witness, Federal Rail Administrator Joseph Boardman, said the White House continues to distinguish between intercity passenger rail service, which it supports, and Amtrak, the service provider which has shortcomings and needs an overhaul.

Working to shift capital developments to the states, Boardman said the administration has proposed the $100 million grant program. Of the $800 million in direct subsidies to states, $300 million would go for operating expenses, a category of aid the administration eventually wants eliminated. In contrast, Amtrak asked that $485 million of its request go for operating expenses.

Just to keep Amtrak's most profitable trains that operate on the Northeast Corridor in good working order, Kummant testified it takes from $350 to $400 million a year in maintenance. Pressed by Rep. Virgil Goode, R-Va.., what he would do with Amtrak if he were running it as a private corporation, Kummant reminded him that it is a company and said passenger rail "will never make money."

Olver and other members pressed Boardman on plans for dealing with the number of rail accidents involving Amtrak. Boardman pledged to "get a handle on what is going on," and argued that budget reductions would not result in fewer inspectors. Kummant added that safety is his number one priority.

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