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Oversight Hearing on Amtrak Hearing Committee on Commerce, Science, and Transportation United States Senate

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Oversight Hearing on Amtrak Hearing Committee on Commerce, Science, and Transportation United States Senate S. HRG. 106–1101 OVERSIGHT HEARING ON AMTRAK HEARING BEFORE THE SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE OF THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED SIXTH CONGRESS SECOND SESSION FEBRUARY 23, 2000 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 78–010 PDF WASHINGTON : 2002 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 11-MAY-2000 07:50 May 17, 2002 Jkt 078010 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 78010.TXT SCOM1 PsN: SCOM1 SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED SIXTH CONGRESS SECOND SESSION JOHN MCCAIN, Arizona, Chairman TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii SLADE GORTON, Washington JOHN D. ROCKEFELLER IV, West Virginia TRENT LOTT, Mississippi JOHN F. KERRY, Massachusetts KAY BAILEY HUTCHISON, Texas JOHN B. BREAUX, Louisiana OLYMPIA J. SNOWE, Maine RICHARD H. BRYAN, Nevada JOHN ASHCROFT, Missouri BYRON L. DORGAN, North Dakota BILL FRIST, Tennessee RON WYDEN, Oregon SPENCER ABRAHAM, Michigan MAX CLELAND, Georgia SAM BROWNBACK, Kansas MARK BUSE, Republican Staff Director MARTHA P. ALLBRIGHT, Republican General Counsel KEVIN D. KAYES, Democratic Staff Director MOSES BOYD, Democratic Chief Counsel SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE KAY BAILEY HUTCHISON, Texas, Chairman TED STEVENS, Alaska DANIEL K. INOUYE, Hawaii CONRAD BURNS, Montana JOHN B. BREAUX, Louisiana OLYMPIA J. SNOWE, Maine BYRON L. DORGAN, North Dakota BILL FRIST, Tennessee RICHARD H. BRYAN, Nevada SPENCER ABRAHAM, Michigan RON WYDEN, Oregon JOHN ASHCROFT, Missouri MAX CLELAND, Georgia SAM BROWNBACK, Kansas (II) VerDate 11-MAY-2000 07:50 May 17, 2002 Jkt 078010 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 78010.TXT SCOM1 PsN: SCOM1 C O N T E N T S Page Hearing held on February 23, 2000 ....................................................................... 1 Statement of Senator Cleland ................................................................................. 6 Prepared statement .......................................................................................... 8 Statement of Senator Hutchison ............................................................................ 1 Statement of Senator Kerry .................................................................................... 3 Statement of Senator Wyden .................................................................................. 51 WITNESSES Carmichael, Gilbert E., Chairman, Amtrak Reform Council ............................... 16 Prepared statement .......................................................................................... 20 Mead, Kenneth M., Inspector General, U.S. Department of Transportation ..... 28 Prepared statement .......................................................................................... 31 Millar, William, President, American Public Transportation Association .......... 38 Prepared statement .......................................................................................... 40 Ross, Dr. Catherine, Executive Director, Georgia Regional Transportation Authority ............................................................................................................... 42 Prepared statement .......................................................................................... 43 Thompson, Tommy, Governor of Wisconsin, Chairman of the Amtrak Reform Board ..................................................................................................................... 9 Prepared statement .......................................................................................... 13 Warrington, George, President, National Railroad Passenger Corporation ....... 9 APPENDIX Inouye, Daniel K., U.S. Senator from Hawaii, prepared statement .................... 61 Snowe, Olympia J., U.S. Senator from Maine, prepared statement .................... 61 Response to written questions submitted by Hon. Max Cleland: Gilbert E. Carmichael ...................................................................................... 62 Amtrak .............................................................................................................. 68 Response to written questions submitted by Hon. John McCain: Amtrak .............................................................................................................. 71 (III) VerDate 11-MAY-2000 07:50 May 17, 2002 Jkt 078010 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 78010.TXT SCOM1 PsN: SCOM1 VerDate 11-MAY-2000 07:50 May 17, 2002 Jkt 078010 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 78010.TXT SCOM1 PsN: SCOM1 OVERSIGHT HEARING ON AMTRAK WEDNESDAY, FEBRUARY 23, 2000 U.S. SENATE, SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The subcommittee met, pursuant to notice, at 10:05 a.m., in room SR–253, Russell Senate Office Building, Hon. Kay Bailey Hutchison, chairman of the subcommittee, presiding. Staff members assigned to this hearing: Ann Begeman and Char- lotte Casey, Republican professional staff; Carl Bentzel, Democratic counsel; and Debbie Hersman, Democratic professional staff. OPENING STATEMENT OF HON. KAY BAILEY HUTCHISON, U.S. SENATOR FROM TEXAS Senator HUTCHISON. I am going to call the meeting to order. We meet today on a very important purpose, to review the progress of Amtrak in meeting its goal of operational self-suffi- ciency by the end of 2002. This is the first hearing we have had on Amtrak’s progress since passage of the Amtrak reform legisla- tion in 1997 and since the first report of the Amtrak Reform Coun- cil, which was released on January 24 of this year. Railroads have played a major part in the history of America, the vital link between the East and the West. Railroads are part of our past and I hope will be part of our future. In that regard, I believe Amtrak can and should be a vital part of our integrated transpor- tation system in the future. Amtrak serves 45 States. It operates over 22,000 route miles. In 1998 it served 21 million passengers. And if you include Amtrak’s contract commuter services, it serves an additional 54 million pas- sengers. I am pleased to find that Amtrak is meeting its financial goals. In fact, they have exceeded their own business goals. In fiscal year 1999, Amtrak revenues reached a record $1.8 billion, a 7 percent increase over the previous year. In the first quarter of this year 2000, revenue increased 8 percent. One note of personal pride in these results is the performance of the Texas Eagle. A few years ago, I worked with Amtrak and our State legislature to save this route from extinction. Ridership in- creased on this route 17 percent in the last quarter. I think this is a tribute to Amtrak’s renewal, essentially a shift in attitude from that of a government agency to a quasi-business (1) VerDate 11-MAY-2000 07:50 May 17, 2002 Jkt 078010 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 78010.TXT SCOM1 PsN: SCOM1 2 entity. It is also a testimony to Amtrak’s improved working rela- tionships with States and localities. This shift in attitude is also reflected in the private sector’s view of Amtrak. Moody’s has recently announced that it is upgrading the bond rating for Amtrak, based partly on the notion that Amtrak will indeed be operationally self-sufficient by 2003. Clearly, this is good news. But there are still concerns about Amtrak’s path to self- sufficiency. The GAO has raised concerns about Amtrak’s glidepath to end Federal subsidies. They have reported that Amtrak needs to in- crease its progress by fivefold in order to meet the goal of no longer needing Federal operating funds. A key component of this success is mail and express package con- tracts, which I hope you are going to address, Governor Thompson, in your testimony. Concerns have also been raised by the Amtrak Reform Council about the accounting methods that Amtrak is using. First let me say that I appreciate what the reform council is doing. I met with you, of course, when you were meeting in Dallas. I believe you are a good reality check for Amtrak. In order for Amtrak to succeed, we cannot delude ourselves with purely rosy scenarios. We must have critical analysis of Amtrak’s performance. ARC contends, for example, that while revenue is up, Amtrak’s core business of intercity passenger rail performed marginally worse in 1999. Further, ARC raised questions about ridership. It suggests that despite a sustained economic expansion in this dec- ade, Amtrak is serving approximately the same number of cus- tomers today as it was in 1990. The Amtrak Reform Council has also suggested that Amtrak is wearing many hats, perhaps too many hats. It is everything from a passenger rail company to a real estate company to an equipment and manufacturing company. These are good questions that need to be answered, if Amtrak is truly to succeed. Second, I want to address the accounting issue raised by the ARC report. I want to be clear. I do not think that Congress, in writing the Amtrak Reform Bill, envisioned that Amtrak, our na- tional railroad, should be treated differently than other public tran- sit agencies. I believe Congress intended that Amtrak would continue to re- ceive capital funds from the Federal
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