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term debt and capital lease obliga-

that Amtrak faces a major liquidity crisis and

tions totaled $2.8 billion, an increase

probable bankruptcy, long-distance trains

of $1 billion over 1999.39

make more sense as "rolling National Parks,"

passenger rail service should be opened to

To cover short-term operating losses until

competition, Amtrak's monopoly should

a new federal appropriation becomes available

end, and reforms launched by Amtrak have

not paid off.44

in October, Amtrak mortgaged Penn Station

in New York as collateral for a $300 million

The Amtrak Reform Council echoed

loan.4 0 Said Sen. John McCain (R-Ariz..):

many of these views by stating in March

2001: "Amtrak's performance in FY 2000 was

approximately $100 million short of its goal.

I am informed this transaction was

Revenues were lower than expected, costs

out of desperation because Amtrak

were higher than planned, and productivity

would become insolvent within the

improvements did not produce measurable

next month without an immediate

financial gain."45

infusion of cash. . . . I also under-

stand the actual cost to repay the

All of these findings should come as no sur-

$300 million dollar loan will be near-

prise in light of some of GAO's conclusions about

ly $600 million over the 16-year life

Amtrak's chronic problems. For example:

of the loan. How is funding a few

· "Amtrak's

months of operating costs over a 16-

expenses were at least two

year period a sound business judg-

times greater than its revenues for 28

ment? It simply isn't.4 1

of its 40 routes in fiscal year 1997. In

addition, 14 routes lost more than

$100 per passenger carried."46

Amtrak's financial condition remains pre-

· "During fiscal year 1997, five Amtrak

carious despite the loan. In July 2001 the rail-

road offered 2,900 employees a voluntary sep-

routes each carried more than 1 million

aration through early retirement and other

passengers, accounting for nearly 60 per-

incentives.42 Whether that effort will be suc-

cent of the railroad's ridership. In contrast,

17 Amtrak routes carried only about 10

cessful remains to be seen. As GAO notes:

percent of Amtrak's total ridership."47

· "During fiscal year 1997, fewer than

Amtrak attempted to reduce its

management staff in 1994 and 1995

100 passengers, on average, boarded

by offering employees early retire-

Amtrak intercity trains and connecting

ment and buyouts to leave the com

-

buses per day in 13 states . . . the rela-

Amtrak has yet to

pany. As a result Amtrak's manage-

tively large number of states with rela-

use its freedom to

ment staff declined by a total of

tively low ridership, along with other

discontinue a sin-

about 15 percent between 1994 and

financial performance data, is indica-

1995. But, by 1999, the number of

tive of Amtrak's financial performance

gle money-losing

problems."4 8

management employees was almost

service.

the same as it was in 1994. Union-

represented employment declined 7

Congress has virtually ignored those find-

percent from 1994 through 1996.

ings and, in defiance of all logic, is consider-

But union-represented employment

ing additional funding boosts for Amtrak.

has also grown since then, and, in

1999, Amtrak had more union-rep-

Setting Low Reform Goals

resented workers than in 1994.4 3

A report issued by the Working Group on

Congress passed the Amtrak Reform and

Intercity Passenger Rail in June 1997 found

Accountability Act of 1997 in an attempt

7