The Bush administration is seeking to eliminate federal subsidies for Amtrak, a move that could drastically affect passenger rail service in North Carolina.
During a press conference in Charlotte on Tuesday, U.S. Secretary of Transportation Norman Mineta announced Bush’s intention to change the federal government’s relationship with Amtrak Corp., which is $3.8 billion in debt.
“Everybody agrees that Amtrak is on financial life support,” Mineta said. “But the answer to the problem is not throwing more money into a system that is fundamentally flawed.”
The Passenger Rail Investment Reform Act, originally introduced in Congress in 2003, would end the billion-dollar subsidies that Amtrak receives annually from the federal government and divide control of train operations and infrastructure among private companies and state governments.
That would force the struggling corporation either to pay its own operating costs or to face bankruptcy.
“We believe that periodic competition in selecting a service provider … will help the network of passenger rail service thrive and grow,” Mineta said.
Unprofitable Amtrak routes — mostly those with few passengers — would be closed down to cut back on costs.
Bush’s proposal instead would give federal funds to state government to match dollar for dollar state investments in rail infrastructure.
His plan likely will face stiff opposition from many legislators in Washington who see federal subsidies as important to maintaining rail services for commuters.
