Senators alarmed at reported plan to reduce subsidies for Amtrak White House is expected to shift capital funds into operating budget

January 17, 1998|By Carl M. Cannon and David Folkenflik | Carl M. Cannon and David Folkenflik,SUN NATIONAL STAFF

WASHINGTON -- White House officials sought yesterday to quash speculation that the administration's next budget will end operating subsidies for Amtrak, insisting that six senators who have protested the presumed cuts had been misinformed.

"Everything I've been led to believe indicates there will be substantial operating subsidies and substantial capital investments for Amtrak in the budget the president will propose in February," the White House spokesman, Mike McCurry, told reporters.

McCurry's denial came in response to speculation set off by an article yesterday in the New York Times.

The article quoted a letter from Sen. Frank R. Lautenberg, a New Jersey Democrat, who wrote to President Clinton this week on TTC behalf of five other senators from the Northeast.

"It has come to our attention," Lautenberg's letter said, "that your administration is strongly considering the submission of a fiscal year 1999 budget that eliminates operating assistance for Amtrak and falls short of the railroad's needs."

Jeff Whelan, an aide to Lautenberg, said the senator had been told by senior officials of the White House Office of Management and Budget that the administration would shift some money out of Amtrak's budget for capital improvements to pay for the railroad's operating budget.

Amtrak officials warn that diverting money from the capital improvements budget would jeopardize the railroad's solvency.

The Northeast senators agreed.

"If these commitments are not honored, Amtrak will continue to operate in a constant state of financial and labor crisis," said the senators' letter to Clinton.

The administration's response yesterday did not assuage the worries of Lautenberg and the other senators, however, because White House officials did not disclose how much the federal subsidy would be.

The budget is to be presented in three weeks for the fiscal year beginning Oct. 1.

Last year, Amtrak received $344 million in operating funds.

This year, because of increased obligations to pay pension benefits, it has asked for $377 million.

But Amtrak's annual operating subsidy has been declining for years and is scheduled under last year's budget deal to end in 2002.

To achieve self-sufficiency, Amtrak needs money for new trains, locomotives and other outlays.

As part of Congress' budget agreement with the White House, $2.3 billion was made available to Amtrak for capital improvements.

An OMB official, speaking on condition that he not be identified, conceded that the administration was considering using some of the capital improvements money for Amtrak's 1999 operation budget.

But he said some money would be proposed for the operating budget as well.

"The House is unlikely to support any proposal to use any of the $2.3 billion for operating subsidies," said Tricia Law, an aide to the House Transportation Committee, headed by Rep. Bud Shuster, a Pennsylvania Republican.

"There was discussion during the negotiations last year about whether they could use that money for operating subsidies," she said.

"Our committee leadership and Chairman Shuster were pretty clear that that would not be OK."

Pub Date: 1/17/98

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