NARP RELEASE 02/07/97

AMTRAK WOULD COLLAPSE UNDER CLINTON BUDGET

"When it comes to Amtrak, the nation's intercity rail passenger network,
the Clinton Administration is all talk and no action," said Ross B.
Capon, Executive Director of the National Association of Railroad Passengers.
"Administration officials often say Amtrak's operating grants should end
by 2002. But President Clinton's 1998 budget lacks the most crucial tool
Amtrak must have to attain operational self-sufficiency -- a dedicated
source of capital funding."

"Congress now must set things right," Capon added. "Recognizing the high
costs Amtrak's demise would impose on the nation in terms of more
spending on transportation alternatives, Congress must create dedicated
capital funding for Amtrak (such as from one half-cent of the existing federal
gasoline tax), provide enough resources for Amtrak to survive fiscal
1998, enact legislative reforms aimed at Amtrak efficiency and allow states
to invest some of their federal transportation funds on intercity passenger
rail as part of ISTEA renewal. For passenger rail to survive, Congress
must provide the leadership that the Administration has not."

President Clinton's Fiscal 1998 budget includes $767 million for Amtrak,
$75 million (9%) below current funding and apparently much further below
the request Amtrak plans to submit next week. The President's budget
fails in two important respects:

1) Capital Investment: Whereas the half cent would provide $750 million,
the Administration request is for $423 million -- $200 million each for
the Northeast Corridor and the nationwide system, plus $23 million for
continuing the New York City station project.

2) The $200 million proposed for the Northeast Corridor is far below what is
needed to start high-speed service on schedule in 1999. The failure to do
that would have nationwide implications. Federal Railroad Administrator
Jolene Molitoris said at the National Press Club January 22 that the
planned Northeast high-speed service "is the economic engine" that will
make a profit and help save Amtrak. At the Clinton level, however,
electrification to Boston would not be complete and the "economic engine"
would not exist.

More generally, a stingy capital budget lets Amtrak do very little to
improve its economic performance, since so much is needed to comply with
the Americans with Disabilities Act, Food and Drug Administration
regulations, and environmental mandates and paying principle on the loans
used to acquire much of the new rolling stock Amtrak now operates.

Operations: Amtrak's operating loss for October-December was 13% below
(better than) the two-years' earlier quarter, thanks to retiring older
equipment, a corporate restructuring that reduced the payroll by 2,000
people, aggressive fares increases (sometimes too aggressive), and
increased funding from states.

However, because Amtrak's system already is so skeletal, the
Administration's proposed $202 million -- a 9% reduction, even though
Amtrak is expected to request an increase -- leaves Amtrak two choices,
both likely fatal:

1) Lop off even more of the system, so that in fiscal 1997 and 1998
together, all service will have ended to Texas, Arkansas, Louisiana,
Mississippi, Alabama, Tennessee, Kentucky and Wyoming. This would strand
thousands of passengers -- and cause a political backlash that would doom
any consensus for federal funding for the remaining system -- even the
corridors and high-speed programs so valued by the Administration.

2) Run the system intact until all funding runs out, provoking a crisis.

Neither option serves the public interest. NARP urges President Clinton
to work with the Congress toward a reasonable solution that preserves all
existing routes.

NARP is a non-profit, non-partisan organization dedicated to educating
the public about the benefits of rail travel. It was founded in 1967 and has
12,000 individual members.

Interested persons may send e-mail to to the Senate at
http://www.senate.gov/senator/membmail.html and to the House at
http://www.house.gov/Whoswho.html