S. HRG. 106–1138 OVERSIGHT HEARING ON AMTRAK HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED SIXTH CONGRESS SECOND SESSION SEPTEMBER 26, 2000 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 85–968 PDF WASHINGTON : 2003 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 Apr 24 2002 09:19 Dec 10, 2003 Jkt 085968 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\WPSHR\GPO\DOCS\85968.TXT SCOM1 PsN: CAROLT 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 ANN CHOINIERE, Republican General Counsel KEVIN D. KAYES, Democratic Staff Director MOSES BOYD, Democratic Chief Counsel (II) VerDate Apr 24 2002 09:19 Dec 10, 2003 Jkt 085968 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\WPSHR\GPO\DOCS\85968.TXT SCOM1 PsN: CAROLT C O N T E N T S Page Hearing held on September 26, 2000 ..................................................................... 1 Statement of Senator Cleland ................................................................................. 103 Statement of Senator Kerry .................................................................................... 73 Prepared statement .......................................................................................... 82 Statement of Senator McCain ................................................................................. 1 Prepared statement .......................................................................................... 3 Statement of Senator Snowe ................................................................................... 106 Statement of Senator Wyden .................................................................................. 4 WITNESSES Allard, Hon. Wayne, U.S. Senator from Colorado ................................................. 14 Carmichael, Gilbert E., Chairman, Amtrak Reform Council ............................... 34 Prepared statement .......................................................................................... 37 Coston, James E., Attorney, Chicago, IL, prepared statement ............................ 95 Kaine, Hon. Timothy M., Mayor of Richmond, VA, on Behalf of the U.S. Conference of Mayors, Boise, ID ......................................................................... 83 Prepared statement .......................................................................................... 86 Mead, Kenneth M., Inspector General, U.S. Department of Transportation ..... 5 Prepared statement .......................................................................................... 8 Scheinberg, Phyllis F., Associate Director, Transportation Issues, U.S. Gen- eral Accounting Office .......................................................................................... 25 Prepared statement .......................................................................................... 27 Thompson, Gov. Tommy, Chairman of the Amtrak Reform Board, Accom- panied by George Warrington, President, National Railroad Passenger Cor- poration ................................................................................................................. 20 Prepared statement .......................................................................................... 22 Vranich, Joseph, Irvine, CA .................................................................................... 51 Prepared statement .......................................................................................... 53 APPENDIX Capon, Ross B., Executive Director, National Association of Railroad Pas- sengers, prepared statement ............................................................................... 110 Selden, Andrew C., Vice President—Law and Policy, United Rail Passenger Alliance, Inc., letter dated August 24, 2000 to Senator McCain ...................... 109 (III) VerDate Apr 24 2002 09:19 Dec 10, 2003 Jkt 085968 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\WPSHR\GPO\DOCS\85968.TXT SCOM1 PsN: CAROLT VerDate Apr 24 2002 09:19 Dec 10, 2003 Jkt 085968 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\WPSHR\GPO\DOCS\85968.TXT SCOM1 PsN: CAROLT OVERSIGHT HEARING ON AMTRAK TUESDAY, SEPTEMBER 26, 2000 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 9:30 a.m. in room SR– 253, Russell Senate Office Building, Hon. John McCain, Chairman of the Committee, presiding. OPENING STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM ARIZONA The CHAIRMAN. Good morning. Today’s hearing will be the first Amtrak oversight hearing by the full Committee since we approved comprehensive reform legislation nearly 3 years ago. Clearly not all Members of this Committee share the same perspective concerning the obligation imposed on the American taxpayers to fund Amtrak for what is now in its 29th year of subsidization, and more than $23 billion, even though Amtrak was to have been free of all fed- eral assistance 2 years after it was established long ago in 1971. However, we did all work collectively on reform legislation, with the intent to give Amtrak the tools it said it needed to become operationally self-sufficient. I am eager to learn what progress Am- trak has made toward achieving that statutory goal. More important, we must examine whether the statutory provi- sions shepherded by this Committee will even be relevant if Am- trak and others are successful in enacting the $10 million bond funding scheme being pushed forward by the Senate Financing Committee. Despite my urging to the contrary, last week the Fi- nance Committee was expected to report out legislation which in- cluded the bonding authority for Amtrak. The actual legislative language has still not been made available, but their postponed markup is now expected to occur this week. So far, this multibillion blank check has managed to sail through without even a single hearing by the Finance Committee, just like when it found a way to give Amtrak $2.2 billion in tax refunds, even though Amtrak has never earned a profit nor paid corporate taxes. There is a nagging feeling of deja vu, and I fear once again the American taxpayers will pay the price. As Chairman of the author- izing Committee, I will not sit idly by for another committee to ef- fectively nullify the 1997 reform legislation developed by this Com- mittee. I intend to do all I can to put the spotlight on how this funding scheme will impact the federal taxpayers and the legal ob- (1) VerDate Apr 24 2002 09:19 Dec 10, 2003 Jkt 085968 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\WPSHR\GPO\DOCS\85968.TXT SCOM1 PsN: CAROLT 2 ligations of the federal government, not to mention the spirit of the 1997 reform legislation. During this hearing, Amtrak will present a glowing report on its achievements. I caution my colleagues to not tune out those who will testify about the less than glowing facts. While Amtrak will discuss last year’s record-setting year and this year’s growing rider- ship revenues, the Department of Transportation Inspector General will report that Amtrak has also been experiencing its largest oper- ating losses in history during the same record-setting period. Again, Amtrak has been experiencing its largest losses in history at the time when our Nation’s economy has been at its strongest. Yet we would never know about these losses if we only relied on Amtrak’s press releases. We never hear that Amtrak’s expenses are rising, or that its ridership and revenue gains are actually below the levels projected in Amtrak’s strategic business plan. I cannot understand how Amtrak can so easily issue press releases about its seemingly glowing statistics and outright ignore the realities of the bigger financial picture. To my knowledge, no legitimate business enterprise in this country could get away with deceiving its stake- holders in the manner Amtrak has been doing in its press releases about ridership and revenues. Obviously, ridership is not the end-all Amtrak wants us to think it is, if Amtrak is experiencing astronomical operating losses at the same time it is touting its ridership. Further, if you actually look at Amtrak’s ridership historically, you will find that last year’s record ridership was essentially at the same level it was in 1979. Amtrak’s stagnant ridership cannot be ignored, particularly given the growth experienced by other passenger modes. In the past decade, car travel is up 25 percent, bus travel is up 7 percent, and air travel is up 37 percent. And, let us consider the actual ridership level comparison. Inner city buses carried 357 mil- lion passengers annually, compared to Amtrak’s 21 million. That is 17 times more passengers. Airlines carry 582 million passengers, 28 times more than Amtrak carries, but