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67–047 PDF 2012

LEGISLATIVE HEARING ON THE 

COMMITTEE PRINT ‘‘COMPETITION FOR 

INTERCITY PASSENGER RAIL IN AMERICA’’ 

(112–42) 

HEARING 

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

JUNE 22, 2011 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

FRANK C. GUINTA, New Hampshire 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

(II) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

Discussion draft, H.R. llll, a Bill to develop high-speed rail in the 

Northeast Corridor through a public-private partnership, and to encourage 

private sector competition on intercity passenger rail corridors, 112th 

Cong., 2011 ........................................................................................................... xiv 

Section-by-Section Analysis of Competition for Intercity Passenger Rail in 

America Act .......................................................................................................... lviii 

TESTIMONY 

Boardman, Joseph H., President and Chief Executive Officer, Amtrak ............. 38 

Geddes, R. Richard, Adjunct Scholar, American Enterprise Institute ................ 38 

Hart, Thomas A., Jr., Esq., Vice President for Government Affairs and General Counsel, US High Speed Rail Association .................................................. 38 

Millar, William, President, American Public Transportation Association .......... 38 

Stubbs, Anne D., Executive Director, Coalition of Northeastern Governors 

(CONEG) ............................................................................................................... 38 

Wytkind, Edward, President, Transportation Trades Department, AFL–CIO ... 38 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Cohen, Hon. Steve, of Tennessee ............................................................................ 71 

Cummings, Hon. Elijah E., of Maryland ............................................................... 72 

Larsen, Hon. Rick, of Washington .......................................................................... 79 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Boardman, Joseph H. .............................................................................................. 82 

Geddes, R. Richard .................................................................................................. 86 

Hart, Thomas A., Jr., Esq. ...................................................................................... 93 

Millar, William ......................................................................................................... 113 

Stubbs, Anne D. ....................................................................................................... 117 

Wytkind, Edward ..................................................................................................... 123 

SUBMISSIONS FOR THE RECORD 

Mica, Hon. John L., a Representative in Congress from the State of Florida, 

request to submit the following: 

Rahall, Hon. Nick J., II, a Representative in Congress from the State 

of West Virginia, and Brown, Hon. Corrine, a Representative in Congress from the State of Florida, letter to Hon. John L. Mica, a Representative in Congress from the State of Florida and Hon. Bill Shuster, a Representative in Congress from the State of Pennsylvania, 

requesting a legislative hearing on the draft bill, June 15, 2011; and 

the letter in reply from Hons. Mica and Shuster, June 16, 2011 ............. 17 

2011 Hearings on Intercity Rail Competition ................................................ 22 

Federal Rail Safety Improvements, Pub. L. No. 110–432, 122 Stat. 4959– 

4970, 2008 ...................................................................................................... 24 

International Competition Success Stories .................................................... 37 

Page

IV 

ADDITIONS TO THE RECORD 

American Train Dispatchers Association; Brotherhood of Railroad Signalmen; 

International Association of Machinists and Aerospace Workers; International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, 

Forgers and Helpers; International Brotherhood of Electrical Workers; National Conference of Firemen & Oilers, SEIU; Sheet Metal Workers International Association; Transportation * Communications International 

Union/IAM; Transport Workers Union of America; United Transportation 

Union; letter to Hon. Bill Shuster, a Representative in Congress from 

the State of Pennsylvania, June 21, 2011 .......................................................... 129 

Association of American Railroads, Concerns and Questions on the Discussion 

Draft ...................................................................................................................... 130

Boardman, Joseph H., President and Chief Executive Officer, Amtrak, letter 

to Hon. John L. Mica, a Representative in Congress from the State of 

Florida, June 21, 2011 ......................................................................................... 131 

Broadley, John, John H. Broadley & Associates, P.C.: 

Letter to Joyce Rose, Staff Director, Subcommittee on Railroads, Pipelines, and Hazardous Materials, June 21, 2011 ......................................... 135 

Comments on the Discussion Draft ................................................................ 138 

Capon, Ross B., President and CEO, National Association of Railroad Passengers, written statement .................................................................................. 183 

Chambers, Ray B., Senior Transportation Advisor to RAILCET, submission 

of written testimony of Michael Goetz, Executive Director, RAILCET, on 

behalf of Organized Rail Construction Management and Labor, originally 

submitted for the May 26, 2011, hearing of the Committee on Transportation and Infrastructure entitled, ‘‘Opening the Northeast Corridor to Private Competition for the Development of High-Speed Rail’’ ............................ 191 

CONEG Policy Research Center, Northeast Regional Issues—Competition for 

Intercity Passenger Rail in America Act (Discussion Draft dated June 15, 

2011) ...................................................................................................................... 195

Doulton, Romm, Chairman, Pullman Palace Car Company, letter to Joyce 

Rose, Staff Director, Subcommittee on Railroads, Pipelines, and Hazardous 

Materials, June 21, 2011 ..................................................................................... 198 

Drake, Thelma, Director, Virginia Department of Rail and Public Transportation, Comments on the Discussion Draft ........................................................ 200 

Hartman, Ronald J., CEO—Rail Division, Veolia Transportation, letter to 

Hon. John L. Mica, a Representative in Congress from the State of Florida, 

July 22, 2011 ........................................................................................................ 203 

Hoffa, James P., General President, International Brotherhood of Teamsters, 

letter to Hon. John L. Mica, a Representative in Congress from the State 

of Florida and Hon. Nick J. Rahall II, a Representative in Congress from 

the State of West Virginia, June 21, 2011 ......................................................... 207 

Jayanti, Ignacio, Initial Comments on Mica-Shuster Discussion Draft .............. 209 

Kinstlinger, Jack, P.E., Chairman of the Board Emeritus, KCI Technologies, 

Inc., letters to: 

Mica, Hon. John L., a Representative in Congress from the State of 

Florida, June 16, 2011 .................................................................................. 212 

Rose, Joyce, Staff Director, Subcommittee on Railroads, Pipelines, and 

Hazardous Materials, June 23, 2011 ........................................................... 214 

Little, James C., International President, Transport Workers Union of America, letter to Hon. John L. Mica, a Representative in Congress from the 

State of Florida and Hon. Nick J. Rahall II, a Representative in Congress 

from the State of West Virginia, June 21, 2011 ................................................ 215 

Mortensen, Stacey, Executive Director, San Joaquin Regional Rail Commission, letter to Hon. John L. Mica, a Representative in Congress from the 

State of Florida, June 9, 2011 ............................................................................. 217 

News Release, Coalition of Northeastern Governors, ‘‘CONEG Governors: The 

Northeast Rail Corridor is Uniquely Positioned as a National Model for 

High Speed Rail and Improved Connectivity’’ ................................................... 218 

North Carolina Department of Transportation, Comments on the Discussion 

Draft ...................................................................................................................... 220

Patterson, Dave, President and Chief Operating Officer, RWL Leasing, letter 

to Hon. John L. Mica, a Representative in Congress from the State of 

Florida, June 23, 2011 ......................................................................................... 221 

Pierce, Dennis R., National President, Brotherhood of Locomotive Engineers 

and Trainmen, letter, June 20, 2011 .................................................................. 222 

Page

V 

Press Release, The Congressional Bicameral High-Speed & Intercity Passenger Rail Caucus, ‘‘Rail Caucus Chairs Say Northeast Corridor Should 

Stop Being Used as a Political Pawn,’’ June 15, 2011 ...................................... 223 

Press Release, United States Senator Jay Rockefeller for West Virginia, 

‘‘Rockefeller Concerned About Threat to Amtrak Service in West Virginia,’’ 

June 20, 2011 ....................................................................................................... 225 

Redeker, James P., Acting Commissioner, Connecticut Department of Transportation, Comments on the Discussion Draft ................................................... 226 

Simpson, Freddie N., President, Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters, letter to 

Hon. John L. Mica, a Representative in Congress from the State of Florida 

and Hon. Bill Shuster, a Representative in Congress from the State of 

Pennsylvania, June 21, 2011 ............................................................................... 228 

States for Passenger Rail Coalition, Statement from States for Passenger 

Rail Coalition Chair Paula Hammond on House Transportation and Infrastructure Committee Passenger Rail Proposal—the Competition for Intercity Passenger Rail in America Act of 2011 ....................................................... 230 

Stem, James A., Jr., National Legislative Director, United Transportation 

Union, letter to Hon. John L. Mica, a Representative in Congress from 

the State of Florida and Hon. Nick J. Rahall II, a Representative in Congress from the State of West Virginia, June 21, 2011 ...................................... 231 

Swaim-Staley, Beverley K., Secretary, Maryland Department of Transportation, letter to Hon. John L. Mica, a Representative in Congress from 

the State of Florida and Hon. Bill Shuster, a Representative in Congress 

from the State of Pennsylvania, June 17, 2011 ................................................. 234 

Transportation Trades Department, AFL–CIO, Labor Problems with MicaShuster Competition for Intercity Passenger Rail in America Act .................. 237 

Yaro, Robert, President, Regional Plan Association, Comments on the Competition for Intercity Passenger Rail in America Act of 2011 .......................... 240 

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(1) 

LEGISLATIVE HEARING ON THE 

COMMITTEE PRINT ‘‘COMPETITION FOR 

INTERCITY PASSENGER RAIL IN AMERICA’’ 

WEDNESDAY, JUNE 22, 2011 

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, WASHINGTON, DC. 

The committee met, pursuant to notice, at 11:10 a.m. in Room 

2167, Rayburn House Office Building, Hon. John Mica (Chairman 

of the committee) presiding. 

Mr. MICA. I would like to call this legislative hearing of the 

House Transportation and Infrastructure Committee to order. The 

purpose of this hearing today is to review the committee print, 

which is entitled, ‘‘Competition for Intercity Passenger Rail in 

America.’’ We have assembled a list of witnesses. 

The order of business will be, first, opening statements by Members. And then we will turn to our witnesses that we have. And I 

recognize myself, as we get started here. 

Ms. BROWN. Mr. Chairman? The people have not been permitted 

to—— 

Mr. MICA. Yes. And I, as the chair—the people will be seated. 

But in the effort of moving forward at the appointed time, which 

is 11:00, Members will have the opportunity to present their opening statements. 

And as the witnesses are recognized—as you know, some Members took extensive time during the last markup, biting into our 

time of this important hearing, this bipartisan hearing that I had 

agreed to at the request of Ms. Brown, the ranking member, at the 

request of the full committee chairman, Mr. Mica, and the ranking 

member, Mr. Rahall. 

We are going to proceed with a full hearing, and everyone will 

have an opportunity, as far as the Members, to give opening statements. And then we will hear from the witnesses who are being assembled, and will be seated as we proceed. 

Ms. BROWN. Mr.—— 

Mr. MICA. As I said, the order of business will be opening statements. I will proceed with my opening statements, then we will 

turn to the ranking member or the others who wish to be recognized. 

Let me again welcome everyone today, and say that I am pleased 

to comply with a request both in writing and verbally that I had 

from Mr. Rahall, from Ms. Brown, to convene a legislative hearing 

on the committee print of the proposal by myself and Mr. Shuster, 

which is entitled, ‘‘Competition for Intercity Passenger Rail in 

2 

America.’’ We are very pleased to move forward and try to improve 

passenger rail service, not only in the Northeast Corridor, not only 

for high-speed rail, but also for passenger rail in America. 

As a very strong advocate of passenger rail, I believe it can not 

only benefit us as far as energy and as far as improvement in the 

environment, but in many other ways. I think it is a segment of 

the economy that has been stuck in neutral for many years. We are 

celebrating the 40th anniversary of Amtrak, which has a history of 

a Soviet-style train operation. 

While train operations and systems around the world have 

moved into the 21st and sometimes the 22nd century, achieving 

speeds of 150 miles an hour on average not uncommon in Europe 

and Asia, some of them going much faster than that on average. 

While we have our snail-speed trains that Amtrak promotes at 

great expense, underwriting every ticket last year by approximately $50.80, some of the routes in the hundreds of dollars—and 

I have no problem with subsidization of any forms of transportation, so long as they are reasonable and accomplish what we set 

out to do by moving people efficiently, economically, by the best 

possible infrastructure that we can work together to provide. 

Let me say that we have two reasons for this legislation that Mr. 

Shuster and I have introduced, as I continue with my opening 

statement as we get settled here and get everyone together. 

The first reason, of course, is my great disappointment in highspeed rail. I was excited when President Obama, even as President-elect, had stated one of his goals was to create high-speed rail 

systems like we have in Europe and Asia. He came to the floor of 

the House of Representatives during his State of the Union and 

said that that was his goal, and repeated it. 

And then the second reason we had, of course, was the money, 

which was thrown at several projects. And to go back for just a second, Mr. Shuster and I worked aggressively during the Bush administration, and prior to that I worked back as far as Susan Molinari, previous chairs of this committee, to try to bring good reforms and improve passenger rail service across the United States, 

including the PRIIA Act, which we worked on in a bipartisan manner with Mr. Oberstar. 

I helped author and promote the high-speed rail provisions, 

working in the House and Senate, with both Republicans and 

Democrats, and we actually got the President of the United States 

to sign that law that, again, set out a blueprint for creating highspeed rail, involving States and localities and others in the process, 

setting up, again, a participatory outline and framework. 

All that was sort of blown apart when some of the grants were 

announced. We threw $8 billion in stimulus money and another 

$2.5 billion through regular appropriations at high-speed rail. And 

when those decisions were made behind closed doors without proper consultation of Members of Congress and others, you see exactly 

what you got: people rejected snail-speed trains, they rejected 39- 

mile-an-hour systems that would be slightly improved, and you 

could still ride a bus and get there faster than you could by Amtrak-proposed service. 

So, money came back from Ohio. The 70-, 80-mile-an-hour snailspeed proposals for Wisconsin and Florida that were sold as high 

3 

speed were also rightfully rejected. And I am not very pleased with 

the inglorious start that we have had in throwing money at 

projects that had no possibility of succeeding, either in providing 

high-speed service, or in moving this country into the 21st century 

of high-speed rail. 

Even by Federal definition that we put in the law, high speed is 

110 miles an hour, which was watered down by Amtrak in negotiations. And, in fact, you will find the world’s standard is 120 miles 

per hour. 

We have ended up with a horrible start. I couldn’t think of a 

worse launch of high-speed rail in the United States, undermining 

the efforts that we worked so hard for to launch true high-speed 

service around the Nation. 

I am not even happy with the one project that retains the possibility of high-speed rail in California. We went out to Fresno, and 

we actually did a hearing out there, and the section that has been 

chosen between Fresno and Bakersfield has neither the population 

nor the intercity connections to make that route a success. And yet 

we are throwing billions of dollars at that marginal project, instead 

of a successful project. 

What we have tried to do is turn our focus to the Northeast Corridor. And people—any of the people who say that we are not going 

to succeed, I can tell you right now, Mr. Boardman, representatives 

of labor and others, that we are succeeding. Because the first thing 

we got done was the recognition by this administration and others 

to designate the Northeast Corridor after some time waiting as a 

high-speed rail corridor. 

And we do have some recognition by Amtrak, who is now considering—and we will hear the plans from Mr. Boardman—of bringing 

the private sector in, because he knows as well as I know and 

every Member knows, that you will be turning blue before Congress ever gives $117 billion or waits 30 years for high-speed rail 

in this Nation. 

So, yes, we will have a full hearing on this, and as we rolled this 

out, we tried to do it in a bipartisan manner, bringing in people 

from around the United States, not just the bigshots in Washington. We connected people, hundreds of people from around the 

country, who had an opportunity to participate both by teleconference and by webcast. We offered later—and everyone saw it when 

I saw it—a committee print which you see before you today. 

We will have a hearing every week, if we have to, until we get 

this done, or we get high-speed rail moving and intercity passenger 

service that meets an adequate world standard. 

And all along the way, Mr. Shuster and I have guaranteed, 

promised, committed to preserving labor’s existing benefits, wages, 

and whatever else they have; I don’t want that to be an issue. Anybody who thinks that the glorious future for Amtrak is to continue 

with the status quo, as some have said we should do, are sleeping 

at the switch, as far as labor is concerned. 

Labor, look at the future that labor has had with Amtrak and 

with what’s going on. We have gone from 29,000 Amtrak employees 

when I came to Congress to 19,000. Do you want to continue to lose 

jobs in an industry where other parts of the world they are actually 

gaining and are moving people? Is that the history you want? 

4 

I made part of the record today the outline of what Amtrak did 

to labor, and they argued for years over wages and salaries, minor 

benefits for their employees. I went to those meetings with Mr. 

Oberstar and tried to get off dead center, so that labor could— 

that’s in Amtrak, and the great people who work in that, could get 

the benefits and some of the other terms of employment that they 

have in the private sector that they got from privatization of our 

freight rail, which we did years ago, and again, Amtrak left in neutral. 

No one is trying to harm labor in any way. And I will go out to 

the unions, if I have to go from shop to shop, and explain it to them 

again on train to train, and let them know that they will be protected by whatever we do here. 

Now, in an unprecedented fashion, too, we rolled out that measure last week, the committee print, and I saw it in the afternoon 

when everyone else did. We discussed the general outline of what 

Mr. Shuster and I proposed, both for high-speed rail in the Northeast Corridor and other corridors, and then long-distance and intercity passenger service. His intent is also a follow-up of what we put 

in PRIIA. He asked for just a couple of lines that are money-losers 

to be put up for bid to allow the private sector—and I ask you why 

can’t you—why can’t we ask the private sector to bid on some of 

these routes, if we are guaranteeing, again, labor all of their opportunities, their wages? Why can’t we do that? Why are we so closed 

minded that people can’t consider an offer that may be better? 

We did protect Amtrak in the case, again, that service will continue to be provided. And no one said that we want to dismantle 

Amtrak. In fact, if there wasn’t an Amtrak already, there would 

have to be—you would have to create an Amtrak that would be the 

franchisee and oversee some of the passenger service. 

So, we put provisions into PRIIA, both for high-speed rail and for 

intercity passenger service, that we think we can build upon, and 

that we think that we can have an opportunity to provide more 

service, more employment, and true high-speed rail, while opening 

the door to competition and leaving Amtrak intact. But what we 

get, in fact, are just negative comments. 

And we will move this forward, one way or the other. We will 

move it forward in this Congress or in future Congresses. And I 

guarantee that Amtrak will tell us today and in the future that 

they will have to move in that direction, because they are not going 

to find $117 billion that Congress can give them, and we aren’t 

going to wait 30 years to have that service in the Northeast Corridor or any place else in the United States. 

So, I think that gave everyone an opportunity to get settled. 

[Laughter.] 

Mr. MICA. And, Ms. Brown, you think that everyone got an opportunity to be settled? 

Ms. BROWN. We appreciate that, Mr. Chairman. 

Mr. MICA. And I wanted to make certain that everyone understands with clarity my position. If there is anything I didn’t amplify, I will be glad to do it as we proceed. 

So, with those brief opening comments, I am pleased to yield to 

Mr. Rahall. 

5 

Mr. RAHALL. Oh, thank you, Mr. Chairman. I was asleep at the 

switch. Not that your comments would ever put me to sleep, but 

I do want to thank you for holding today’s hearings at the request 

of subcommittee ranking member, Corrine Brown, and myself, as 

the proposal you and Mr. Shuster have put forth raises a great 

many questions and concerns. 

Amtrak is a for-profit corporation. It is not an agency of the Federal Government. Yet your proposal would divest Amtrak of its assets in the Northeast Corridor and leave it responsible for its debts. 

The nonpartisan Congressional Research Service has determined 

that this proposal is unconstitutional because it violates the appointments clause of the Constitution. It is also likely that the proposal violates the takings clause, because it takes Amtrak’s private 

property without just compensation. 

As a for-profit corporation, I believe Amtrak’s standing is very 

little different than that of any other for-profit corporation in 

America. Yet I do not think anyone would dream of, say, legislatively stripping CSX or Norfolk Southern of its assets if one was 

unhappy with the freight service they were providing. 

There are many other peculiar aspects to this proposal. Under it 

the Secretary of Transportation would solicit expressions of interest 

from entities interested in replacing Amtrak as the operator in the 

Northeast Corridor. The Secretary would then select up to three 

entities to be awarded $2 million in Federal funds to develop more 

detailed proposals. 

Subsequently, the Northeast Corridor Executive Committee established by the measure would accept the detailed proposals and 

select the best one. There is no criteria contained in the measure 

as to what qualifications or restrictions might pertain to these entities. In fact, under a clear reading of the measure, China could 

qualify and operate the Northeast Corridor. Now, I don’t believe 

that is something we really want to see happen. 

I also fail to see why we would hand over $2 million in taxpayer 

dollars to up to three entities in order for them to develop a detailed proposal. That is rather odd, paying somebody to develop a 

proposal to submit to yourself. I do not think that is how things 

of this nature are normally done. 

There is also no guidance or criteria governing which proposal 

the committee would select, other than it being the ‘‘best.’’ What 

does that mean, ‘‘the best’’? The best what? Would we amend Federal aviation or highway statutes to say that the goal of those programs is to have the best aviation system, or the best highways? 

The answer is, of course, that while we all want to do the best, 

we would not use that term, as it is not a statutory term of art. 

In the case of your measure, Mr. Chairman—and I do commend 

you for your vigorous pursuit thereof—I think any overreaching 

goal as to what constitutes the best would include creating and retaining jobs, and provide the highest level of safety and security. 

As to other aspects of the measure, Amtrak relies on an operating profit from the Northeast Corridor to offset less profitable 

long-distance lines in other parts of the country, areas that rely 

heavily on passenger rail service. This includes—and accuse me of 

being parochial or whatever—but this includes the Cardinal that 

6 

runs in my home State of West Virginia, a route connecting New 

York to Chicago. 

With the establishment of Amtrak in the Northeast Corridor, the 

Cardinal will suffer a fatal blow under this proposal, along with 

many other vital routes that connect rural areas of our country 

coast to coast, including the Auto Train, Capital Limited, California 

Zephyr, Coast Starlight, Empire Building, and Texas Eagle. Right 

now, Amtrak serves about 40 percent of America’s rural population. 

All of this service will be lost under the draft legislation. 

I also have serious concerns about the implications of this proposal on rail labor. Under this measure, the existing contracts of 

some 19,000 Amtrak workers would be abrogated, and new workers 

would have no Davis-Bacon protections, and no protections under 

the Railroad Retirement Act, railroad unemployment compensation, and the Railway Labor Act. In other words, this proposal 

leaves rail labor sitting at the station. 

While proponents of this proposal claim this will save money, I 

fear it will have just the opposite result. Under existing contracts, 

Amtrak workers who get displaced receive up to 5 years of protection. As such, under this proposal, Amtrak would be responsible for 

up to $4.4 billion for displaced workers, an obligation that Amtrak 

would not be able to meet. This would undoubtedly fall on the U.S. 

Government. This is just one of the many ways that this proposal 

will cost, not save, the American taxpayers money. 

And then finally, as I conclude, Mr. Chairman, in its present 

form this proposal will have serious consequences for commuter 

rail agencies and freight railroads. And, frankly, I am not sure that 

the proposal can even be fixed. My fear is that if it is enacted, it 

will result in a transcontinental tragedy. 

I thank you for the time, and look forward to today’s witnesses. 

Mr. MICA. Well, thank you. And, as I said, we offered this committee print online last Wednesday and asked any Members who 

had amendments to offer them by the close of business Friday. We 

extended that until Monday at noon. We did agree on this legislative hearing. 

And I do want to say—and I have taken notes of the issues that 

the ranking member has—that we are interested in crafting legislation that can have bipartisan support, and move this process forward. And when I saw the draft myself I had some concerns about 

some of the same issues that you raise. 

And we will be glad to take amendments from, again, committee 

members and others to make certain that our intent to provide 

good service, not to eliminate any, or interfere with any existing 

service, is achieved. 

So, again, just comments. We will, as we continue and move towards markup on the legislation, welcome everyone’s participation. 

Mr. Shuster, chairman of the rail subcommittee, you are recognized. 

Mr. SHUSTER. Thank you, Mr. Chairman. I appreciate you holding this hearing today. I appreciate the ranking member for calling 

for it—Ms. Brown of the subcommittee. 

This is an important issue. The ranking member, Mr. Rahall, 

talked about Amtrak being a for-profit corporation. But if it were 

a bona fide for-profit corporation, it would be bankrupt by now. 

7 

Amtrak would be gone. It would be sold off into pieces, or somebody would have come in and taken it over for $.10 on the dollar. 

It has never lived up to what it was established to be: a for-profit 

corporation. And those out there today and on this committee talking doomsday for Amtrak, I think it’s doomsday for Amtrak if we 

do nothing. 

We have to look around the world at what is going on. Private 

sector capital, private sector operations, are coming in all over Europe and they are taking over the operations of these railways and 

making them profitable, or at least moving them towards breakeven or profitability. And I think the same thing can happen with 

passenger rail in this country. 

I remember back 15, 16 years ago, 20 years ago, even 30 years 

ago, when we deregulated—that is what we are doing here, I believe, we are deregulating passenger rail in this country, just like 

we deregulated freight rails, just like we deregulated the trucking 

industry in this country, just like we deregulated the airline industry. And two of the three have been great successes. The trucking 

industry and the freight rail systems have had great success. For 

the airline industry, the consumer has had success, I believe. We 

have got a lot of options for inexpensive flights around the country. 

The industry, though, has struggled; 9/11 didn’t help at all. 

But still, we deregulated those modes of transportation. And, on 

all accounts, I think we would come down saying that it was a very 

successful deregulation. I think we can do that here, with passenger rail. 

I don’t like to mention this to people, but I think it is important—they were Democratic Presidents that deregulated these industries. My friends on the other side of the aisle, I hope they look 

back at history. When we deregulated aviation and we deregulated 

freight rails in this country, Jimmy Carter was the President of the 

United States. Today you would think that was heresy, for a Democrat to do that, but in fact, that is what happened. Same with the 

trucking industry. Bill Clinton was the President of the United 

States. 

Deregulation works. And it can work in passenger rail. And I believe it can save passenger rail in this country. And, as the chairman said, if we didn’t have Amtrak, we would probably would have 

to, in this bill, create Amtrak. It is not saying Amtrak is going 

away. Amtrak can participate, Amtrak will probably be here. I am 

quite sure it will be here in some shape or form. But it is going 

to be different, and it needs to be different if we want to have a 

vibrant passenger rail system in this country. And I believe we 

need to. 

I say in a lot of hearings about the population of the United 

States. It went from 200 million to 300 million people and we 

crossed that threshold about 4 or 5 years ago; it took us 65 years. 

We are now going to cross the 400 million threshold in about 30, 

or even 25 years from now. Passenger rail has to be a viable part 

of our transportation system, especially in the Northeast Corridor, 

where the population density is incredible. You look around the 

world, it is one of the most populous corridors in the world. We 

need to do better. And I believe this proposal does that. 

8 

When I look around the world—and there is debate, but there 

are facts that have been shown to me—and when you talk about 

the West Coast rail that Virgin Rail took over in England, it was 

started out by the British Government by giving them $400 million 

in subsidies. Today, they pay the British Government $240 million, 

plus they make a profit of $80 million. They have gone in there 

using marketing and best practices and over the last 6 years, they 

doubled the ridership from 14 million to 28 million people. 

I talked to a number of companies that are very interested in 

coming into the United States and investing in some shape or form 

in the Northeast Corridor. They believe that today’s numbers of 10 

million passengers could grow to 30 million or 40 million passengers, which is incredible. And that is what we have to do. 

The proposal also affects State-supported routes. My State of 

Pennsylvania is very eager to have competition on the Keystone 

Corridor, which has been a great success between Amtrak, the 

State, building that line and increasing the ridership by 40 to 50 

percent over the last 4 or 5 years. 

Both you and I look at examples on the negative side. And, of 

course, I am going to ask Mr. Boardman—I don’t believe he was 

there at the time, but in Florida, the Florida Rail South, the Veolia 

bid that got the contract was $97 million; Amtrak was $162 million. I was in business. I couldn’t stay in business if my prices were 

that much higher. And why is that? 

And then, to add insult to injury, Amtrak is suing Veolia because 

of four employees they say were stolen from Amtrak. As I said, I 

was in business, and I had people come to work for me and people 

who went to work for somebody else, and I also had other business 

owners say to me, ‘‘Oh, you stole my employee.’’ You can’t steal 

something you don’t own. So I don’t know why Amtrak is pursuing, 

with Federal taxpayer dollars, a court case about four employees 

that changed where they wanted to work. I think it is ludicrous. 

And there are many examples. We had, the other day, the person 

that runs ACE Rail in southern California, where the bids came in. 

Amtrak bid double what the private sector company bid—I don’t remember which private sector company it was. 

I believe bringing competition to passenger rail is the way to 

save it. I don’t believe that we are going to kill it. We are going 

to save it and make it stronger, I believe, for the future, for the 

future generations of American passengers. And I look forward to 

working with Mr. Rahall and other colleagues—Ms. Brown, on the 

other side of the aisle. If there are provisions that we need to add 

to this, let’s talk about it. 

Because I think, at the end of the day, as history marches forward, passenger rail is going to need to be deregulated. Competition in the transportation industry is what makes it stronger, as 

it has in the past. So, with that, Mr. Chairman, I went over my 

time. But thank you, and I yield back. 

Mr. MICA. I thank the chairman. Let me recognize the ranking 

member of the rail subcommittee, Ms. Brown. 

Ms. BROWN. Thank you. My notes say that I am supposed to say, 

‘‘Thank you, Mr. Mica, for holding today’s hearing.’’ I don’t think 

so, because I think legislation that affects the entire passenger and 

freight rail system in the United States deserves a hearing, examVerDate Aug 31 2005 16:23 Feb 09, 2012 Jkt 000000 PO 00000 Frm 00078 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\6-22-1~1\67047.TXT JEAN
9 

ination, and debate. There are numerous legal, financial, and operational questions that need to be answered before we auction off 

Amtrak to Wall Street investors. 

We have, as we sit here today, no surface transportation reauthorization bill, and no way to pay for it. This week we will be 

forced to delay the Federal Aviation Administration bill for the 

twentieth time, at the very moment that we should be working together to solve problems. 

We have this bill before us today that will be dead on arrival in 

the United States other body, the Senate. We absolutely need to 

find a way to get these transportation programs reauthorized so we 

can put people back to work. But this legislation will do the exact 

opposite. This legislation turns over one of our Nation’s most valuable transportation asset to Wall Street investors with little or no 

regulation or service outcome. No safety or security mandates after 

being targeted by—given a private or possible foreign entity the 

right to take the land and property of the United States citizen and 

provide no protection for labor, all the while jeopardizing the railroad retirement system. 

This legislation also put the American taxpayers on the hook for 

billions of dollars in Amtrak debt, environmental clean-up, windfall 

profits for billionaires, and largely subsidies for—assuming that 

they would ever survive. In fact, this is unheard of. We are giving 

$6 million to encourage people to bid. 

We all agree that we need better service on the Northeast Corridor. But no one is going to operate trains at 200 miles per hour 

on infrastructure built in the 1800s. Amtrak has an operating profit on the corridor, and is steadily increasing passengers. And we 

can tear apart Amtrak and hope for the best, or we can give Amtrak the tools that it needs to run true high-speed rail along with 

the numerous other services that they provide. 

The United States used to have the best passenger rail service 

in the world. Now we are being left behind because we refuse to 

invest necessary money for the true national passenger rail service. 

Japan and Great Britain—which is often talked about on this committee—Japan invested $30 billion—30—I am sorry, $300 billion in 

infrastructure. That cost never passed on to the operators. 

Great Britain, which is often talked about, recently invested $15 

billion to improve the West Coast Line, which Virgin Rail runs. 

Virgin pays only $160 million annually to Great Britain for the infrastructure improvement. Amtrak is expected to do less, yet they 

have a higher operating profit on the Northeast Corridor than Virgin on the West Coast Line. In fact, I think about $130 million. 

The American people deserve better. And privatizing Amtrak rail 

along the Northeast Corridor is definitely not the way to improve 

our Nation’s passenger service. It will kill our Nation’s passenger 

rail, and dismantle Amtrak, which I believe is the true goal of this 

legislation, and has always been the true goal from the Bush administration, when they zero out the funding for Amtrak. 

Mr. Chairman, I have received a number of letters and statements of concerns regarding this draft bill, including statements 

from Amtrak, the National Association of Railroad Passengers, and 

a number of labor unions, the Brotherhood of Locomotive Engineers 

and Trainmen, the International Brotherhood of Teamsters, just to 

10 

name a few, and several other Members. I would ask unanimous 

consent that they be included in the hearing record, and given 30 

days to get that information to the committee. 

I yield back the balance of my time. 

Mr. MICA. I thank the gentlelady. Other Members seek recognition? Mr. Southerland, gentleman from Florida. 

Mr. SOUTHERLAND. Thank you, Mr. Chair. I commend you for 

having this hearing, and I appreciate bringing this incredibly important issue to the forefront of the full committee. 

You know, I will tell you. At least—you know, we have talked 

about this issue, and we talk about other countries that are doing 

well. I applaud us for often times, in referring to those countries, 

countries that are our allies, countries that do appreciate freedom 

and do appreciate free enterprise and free markets. Often times we 

hear on the Hill raising up countries that in no way exemplify the 

values that we hold true in this country. 

And so, I think sometimes you don’t have to redesign or reinvent 

the wheel. There are some good ideas out there around the world 

that I think we need to be learning from, and using them as our 

R&D, and trying to implement on the issue that is before us today. 

You know, it blows my mind that Amtrak’s long-distance routes operated a deficit of $527 million, requiring an average subsidy per 

ticket of $177.84. I, too, as Chairman Shuster made mention, stuck 

on to the ranking member’s comments about how Amtrak is a forprofit organization. You know, I am new to this whole world, being 

here in Congress for 6 months. But I will tell you my family has 

been in business, a business my grandfather started. And I will tell 

you that if we were having to subsidize to the percentages that 

Amtrak is having to subsidize, it is just real clear we would have 

gone bankrupt and we would have ceased to exist, and we would 

not have perpetuated our business, our family business, to three 

generations now. 

There are just some brutal realities out there, just brutal realities. When you are in a hole, stop digging. Spoken like a true funeral director, because that is what I am. I know about digging 

holes. And what I see here just violates common sense. 

I understand how critically important this issue is regarding the 

transportation, and as far as the sector we are looking at. We want 

it to survive, we want it to thrive. And I think that, in looking at 

how we can best do that, to inject some private—public-private 

partnerships, makes sense. But the one thing that doesn’t make 

sense is digging a deeper hole. 

And so, I am eager today to hear from our panel. I thank you 

all for being here. We are going to disagree, and that is OK. But 

I will tell you your ideas, they either fill the hole in, or dig it deeper, one of the two. We are broke. We are broke. 

And so, Mr. Chairman, I thank you. I look forward to hearing 

from our—from those that are going to testify here today, and I 

yield back. 

Mr. MICA. Thank the gentleman. Mr. Sires, the gentleman from 

New Jersey. 

Mr. SIRES. Chairman Mica, Ranking Member Rahall, I thank you 

for holding this hearing today. As a Member whose district is in 

the Northeast Corridor, and as someone who travels home nearly 

11 

every weekend on Amtrak, I have some concerns and reservations 

about this bill, which proposes to separate Northeast Corridor from 

Amtrak. 

The Northeast Corridor is important to Amtrak because it generates revenue which can be used to make up the—for losses in 

long-distance routes. However, more important than this, Amtrak 

provides an essential service to millions of passengers each and 

every day, and is a key component of our regional economy. 

The Northeast Corridor is not owned by Amtrak. And if the 

Northeast Corridor is to be split, it would split up into different 

private corporations. The ramification must be known. 

For example, the tunnel between New Jersey and New York are 

easements held by New York City. This legislation seems to assume that New York City would be willing to transfer these easements. Homeland Security concerns could be triggered. What would 

be the security requirements for private corporations to take over 

Amtrak routes? Where would labor jobs go? 

Additionally, under this plan, what would be the implications for 

the commuter railroads such as the New Jersey Transit? 

I am much—I am very much looking forward to the testimony of 

our witnesses, and thank the chairman and the ranking member 

for holding this hearing. 

Mr. MICA. Thank you. Mr. Nadler. 

Mr. NADLER. Thank you, Mr. Chairman. Thank you, Chairman 

Mica and Ranking Member Rahall, for holding this hearing on the 

chairman’s bill to privatize the Northeast Corridor. 

I am glad we are holding a hearing, instead of a markup, as I 

think was originally intended. This is a pretty drastic proposal that 

makes sweeping changes to the intercity passenger rail system. It 

requires careful thought and deliberation, and I appreciate the 

chairman’s willingness to slow the process down, so we can begin 

to address the many questions and concerns raised by the legislation. 

The bill requires Amtrak to redeem common stock and transfer 

its assets to DOT. At the same time, it directs the Secretary to solicit ‘‘expressions of interest’’ from private entities to build and operate high-speed rail service, and then it gives $2 million to the top 

contenders to prepare a more detailed proposal. It is not clear why 

an entity that supposedly has enough funding to build and operate 

a high-speed rail line needs taxpayer support just to write a proposal. 

Then the Executive Committee establishing the bill would evaluate these proposals, select the best one, and notify Congress of its 

decision. Congress would have no role in the decision. Congress 

would just be told what will happen, and the Secretary is directed 

to implement the Executive Committee’s selected plan and grant a 

99-year lease to the Executive Committee to carry it out. 

One of the biggest problems with the bill is that it sets in motion 

the elimination of Amtrak before any proposals are reviewed or recommended. We have no idea if there are any viable private financing schemes that adequately meet the desired criteria. 

We have already requested proposals in PRIIA, and none were 

submitted for the NEC. I understand the chairman has indicated 

that he thinks DOT didn’t really act in good faith in search of proVerDate Aug 31 2005 16:23 Feb 09, 2012 Jkt 000000 PO 00000 Frm 00081 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\6-22-1~1\67047.TXT JEAN
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posals, but his bill setting up a new RFP is also in the hands of 

the DOT. Regardless, the logic doesn’t follow that, therefore, we 

should first eliminate Amtrak and then hope that a solution will 

magically appear. 

As the chairman knows, I have supported his quest to research 

and review privatization proposals. But why should we take the 

drastic actions laid out in this bill until a detailed plan has been 

presented and properly evaluated? Why should we disrupt or eliminate current service and potentially lose good paying jobs until we 

know what will replace it? And why shouldn’t we keep investing in 

Amtrak in the interim, and allow it to compete, as well? 

Another major problem is that this bill grants broad authority, 

including eminent domain authority and preemption of several 

State and local laws, to this Executive Committee which is eventually to be staffed by the private entity with a lot of unanswered 

questions. There might be legitimate reasons to have such authority. And, generally speaking, I support it. When furthering interstate transportation and commerce, that is clearly in the public interest. 

But under this bill we don’t know exactly who we are giving this 

authority to, or when or how it will be used. This is a monumental 

states’ rights issue, and a very broad grant of authority to an unknown, unaccountable entity over our districts. 

There are simply too many unanswered questions to allow such 

broad Federal preemption, and to place it in the hands of a private 

entity. 

I also question the provision of the bill requiring Amtrak to redeem all common stock at the book value. DOT performed the evaluation and determined the stock is worthless, which—an evaluation the courts have upheld. Under this bill, Congress is stepping 

in, providing a direct windfall to at least one of the shareholders. 

I have concerns about the takings issue in the bill. But beyond 

that, this could create a real problem of unjust enrichment. 

I am, frankly, surprised that, as my friends on the other side of 

the aisle are pushing drastic cuts across the Federal budget, that 

they would agree to just handing someone a windfall of hundreds 

of millions of dollars. 

These are just a couple of the big picture concerns. There are 

many other troubling aspects of the bill, such as inadequate labor 

protections, the potential impact of the railroad retirement system, 

and the increased cost for the freight railroads, the probable loss 

of State-supported and long-distance routes, and the shifting financial burden to States and local governments. 

If one of the main goals of privatization is presumably to reduce 

Federal funding, it seems odd to leave the Federal Government 

with such significant costs and liabilities. I would rather take that 

money and invest it directly in Amtrak’s plan to eliminate the $9 

billion backlog created by Federal under-investment, and to implement Amtrak’s plan to upgrade its high-speed rail service. 

My biggest problem with this bill is that it throws the entire passenger rail system off a cliff, and hopes the safety net will suddenly 

appear. At least it hopes the NEC is saved. It doesn’t deal effectively with other routes, except to remove the cross-subsidy from 

13 

the Northeast Corridor that now supports them. These are risks I 

am not willing to take. 

As of now, I must oppose this bill. But I do commend the fact 

that we are holding a hearing, and hope we can explore many of 

the subjects raised by the bill. But we certainly shouldn’t take the 

approach that the bill does of, in effect, abolishing Amtrak, and 

then hoping a proposal will emerge that can adequately replace it. 

I think that is, to put it mildly, putting the cart before the horse. 

I thank you, I yield back. 

Mr. MICA. Thank the gentleman. Mr. Cravaack? 

Mr. CRAVAACK. Thank you, Mr. Chairman, and I want to begin 

by commending you and Mr. Shuster for this bold, new direction. 

I think that Amtrak needs to go. And I thank all the panel for 

being here, as well, and I look forward to your testimony, and I 

hope to learn a lot along the way. 

Just some comments. I am a pilot from Northwest Airlines—or 

now Delta—and living through deregulation, or not—but living as 

a result of deregulation, I can tell you that it is good for the consumer. Some of the arguments I am hearing here today were probably some of the same arguments that we heard about the airline 

deregulation, as well. 

Quite frankly, Amtrak is broken. And the other fact is we are 

broke. I hear about investment. Where is that investment money 

going to come from? Right now, 47 percent of our debt is foreignowned. Do we plan to go to over 50 percent of that debt? Have foreign-owned entities own our debt, and begin to start telling us 

where we can and cannot invest our money? I am not willing to put 

my children and my grandchildren at that risk. 

When I see investment, or what I think the private sector should 

be doing, and what they can do, is start investing. The demand is 

there. And with the demand being there, you are going to see the 

private sector slip right in and start making profits, accordingly. 

When I see competition, what I see is increasing flexibility of 

schedules, affordability, and quality increasing, as we have seen all 

through the competition model. I have seen this with the airlines 

itself. 

Einstein had it right. Keeping—doing the same thing over and 

over again and expecting different results is the true definition of 

insanity. We cannot continue on with this model. I look forward to 

hearing what you have to say, and hopefully joining with you and 

partnering with you in a private enterprise that can create a significantly profitable model that will actually benefit the consumer 

and have long-term viability without increasing the debt on this 

country. I thank you very much, and I—Mr. Chairman, I yield 

back. 

Mr. MICA. Thank you. Ms. Norton? 

Ms. NORTON. Mr. Chairman, I appreciate this hearing. I mean 

the last hearing Amtrak wasn’t here to talk to—it is like I talk 

about you while you are not here. It is important to about them 

and to talk to them, with them here. And so this is an important 

hearing. 

I also think you have every right to be impatient with the backwardness of the United States on high-speed rail. May I remind the 

chairman that for decades, for almost 75 years, we have sat here 

14 

and watched every advanced country—and some not so advanced— 

develop high-speed rail, and never lift a finger to do anything about 

it, until the administration, in fact, initiated a stimulus package in 

the middle of the great recession. It was aimed at finally, finally, 

starting up a nationwide high-speed rail system, while at the same 

time offering jobs to the many troubled areas of our country. 

That is why we didn’t, for example, concentrate on the Northeast 

Corridor, which would have been more efficient, but that was not 

what those times called for. In fact, starting it up all across the 

country made a lot of sense. But we see some States even have decided to give back the money—including your own, Mr. Chairman, 

despite your best efforts to encourage the State of Florida, one of 

those most in need of high-speed rail, to proceed. 

The criticisms of Amtrak that I have heard here are no substitute for hard thinking about how to fix that system and get highspeed rail. That is the easy part. And I regret that this is an easy 

solution. 

The bill has an encyclopedia of flaws I will not—I will focus on 

only two of them. I am particularly troubled, by the way, by the 

cavalier treatment of American workers who have worked for Amtrak for decades. Because this bill surely wipes out their contracts, 

and undermines their retirement system. 

But let me focus on two fatal flaws. It is really surprising to see 

the Majority introduce a bill that has such Fifth Amendment-taking violations. This bill, if it were ever to get through the Senate— 

and I don’t think anyone entertains the illusion that it would— 

would be in court if any President ever signed it. I don’t want— 

the constitutional Fifth Amendment takings violations are replete 

throughout the bill. That, itself, is a fatal flaw. 

But there is another fatal flaw in the thinking behind this bill. 

The authors do not take into account that there is no passenger 

railroad service in the world today that is not heavily subsidized. 

The authors wipe out 1970, when the railroads came begging the 

Federal Government to ‘‘Take this off our hands.’’ Do you think the 

Federal Government wanted to take on a railroad and subsidize it 

the way we have done? Of course not. But both then and now, the 

private sector was not prepared to do what you would have them 

do now. 

Now, they do have a recourse. And, mind you, they will go to 

that recourse as quick as they were to—to get control of the Northeast Corridor. That recourse is available now. It is prohibited in 

the United States. It is prohibited is Asia. It is prohibited in Europe. And that is why passenger rail service is heavily subsidized 

throughout the globe. If you think we are the first country in the 

world to invent a privatized railroad system, I ask you to look at 

the history of the world. 

This is not deregulation. This is privatization, where the private 

sector would begin by depending on a Federal subsidy, ‘‘Give me 

the money to write the proposal,’’ and then would either be begging 

us for money to keep the fares down or, God help us, would be raising the fares themselves. 

This is an interesting exercise, but we ought to understand it is 

no more than that at a time when we need to get serious about the 

15 

business of Amtrak and the hard challenges and problems it poses 

for this committee. I thank you, Mr. Chairman. 

Mr. MICA. I thank the gentlelady. Ms. Napolitano. 

Mrs. NAPOLITANO. Thank you, Mr. Chair and Ranking Member 

Rahall. 

I would like to ensure that I agree totally with Ranking Member 

Brown’s comments, am in strong opposition for this bill. It would 

end intercity passenger rail. And it goes beyond that, especially in 

my State of California. It gives those assets to the Northeast Corridor and et cetera, et cetera, as we have heard. It Would have a 

tragic impact on my State of California, most definitely. 

We have three of the top five busiest passenger rail corridors in 

the United States: the Surfliner, the Capital Corridor, the San Joaquin Corridor. And many long-distance Amtrak routes travel 

through California, including Sunset Limited, which does stop in 

my district. Metrolink, which is a commuter rail agency of southern 

California, is operated by Amtrak. 

The only way Amtrak would be able to continue operating in 

California is if the State itself incurred the enormous cost of operation of its equipment, of its maintenance, the station services and 

support services. And, as we well know, California, along with 

many other States, is in the doldrums. Their budgets—they are 

going bankrupt. 

So, there will not be any ability to have those States support, due 

to their major budget constraints. They would help—would actually 

hinder hundreds of thousands of people ability to travel, and would 

be able to further clog our California freeways, which are already 

called parking lots in the sky. 

We want, we should, we must assist Amtrak become a more profitable entity, instead of trying to encourage demise. Again, I 

strongly oppose the Competition for Intercity Passenger Rail in 

America Act, and I yield back. 

Mr. MICA. Mr. Larsen? 

Mr. LARSEN. Thank you, Mr. Chairman. At a time when we 

ought to be improving our domestic infrastructure to remain competitive in the global economy, and to promote growth and efficiency and feed the American market, I think this is exactly the 

wrong bill at the wrong time. Instead of jeopardizing 20,000 jobs 

and shutting down an economic driver in many regions in this 

country, we ought to be investing in our transportation and infrastructure to create jobs in our local community. 

This proposal would seriously threaten the promising future— 

and the promising present, actually—of passenger rail in the Pacific northwest. Without revenues from the Northeast Corridor, 

Amtrak would shut down their long-distance routes. And certain 

portions of my State would end, as well. Washington State’s passenger rail service is operated by Amtrak, and would face huge cost 

increases if Amtrak continued to operate. 

I also note Washington State, as a State government, is a major 

contributor to this service in Washington State. The commuter rail, 

which is operated by Amtrak, would also have to find a new operator. 

Washington State’s passenger rail ridership has experienced 

strong growth over the past few years, and our State remains comVerDate Aug 31 2005 16:23 Feb 09, 2012 Jkt 000000 PO 00000 Frm 00085 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\6-22-1~1\67047.TXT JEAN
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mitted to its future. Our State has received over $700 million in 

high-speed rail funds, and these dollars are going to work right 

now in our local communities, creating jobs and helping commerce 

to move more efficiently from point to point. And this proposal 

would be a serious set-back to these efforts. 

I am also concerned about this bill’s effect on the men and 

women who work on our railroads. It would abrogate all existing 

contracts for workers on the Northeast Corridor and other 

privatized routes, and provides no protections for dismissed personnel. For rail workers in the new system, Davis-Bacon protections would not apply, and they would be exempt from the Railway 

Labor Act and the railroad retirement and unemployment systems. 

Without RLA protections, workers would lose their longstanding 

right to collectively bargain. It would also undermine their railroad 

retirement system that provides pensions for many people. 

This is a job-killing proposal, Mr. Chairman. If you are indeed 

open to making fixes to it, we look forward—I look forward—to 

hearing from our witnesses to see what kind of fixes we can make 

to it. So I look forward to the testimony today, and after a short 

meeting upstairs I will return to listen to the testimony. Thank 

you. 

Mr. MICA. Any other Members seek recognition? 

[No response.] 

Mr. MICA. No other Members seek recognition? We have had a 

request for submission to the record from Ms. Brown of letters, articles, and reports, and they will be made part of the record. 

I ask unanimous consent that also—— 

Ms. BROWN. Mr.—I asked for an extension of 30 days. 

Mr. MICA. Extension of 30 days. That is excellent. If Mr. Rahall 

agrees, we cannot wait to not comply with a 30-day request. Mr. 

Rahall agrees, so the record will be open for a period of 30 days. 

And we will hold as many additional hearings as we need to take 

testimony. Maybe by that time some Members will have had time 

to read the bill and find out that what they are talking about isn’t 

even in the bill. 

But additional unanimous request consents, I have several here. 

A copy of the letter to myself and Mr. Shuster from Ms. Brown, Mr. 

Rahall. 

[No response.] 

Mr. MICA. Without objection, so ordered part of the record. 

[The information follows:] 

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Mr. MICA. This is a list of the hearings on intercity rail competition that we did so far in the committee: January 27th in New 

York City; March 11, 2011, here in Washington; and then May 

26th here in Washington. Also, a list of the witnesses who testified 

on bringing competition into the passenger rail service. That will 

be made part of the record. 

[The information follows:] 

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Mr. MICA. And also made part of the record, I want to reference 

the cover page of the PRIIA Act—the gentlelady from the District 

said that nothing had been done relating to high-speed passenger 

rail service—which is signed by President Bush. I helped author 

the high-speed rail provisions signed by the President October 

2008. 

In the first passenger rail reauthorization in some 11 years undertaken by Congress, and then the point also that there are not 

systems that make money, we will take a page from our introductory document that is entitled, ‘‘International Competition Success 

Stories,’’ and show exactly where some routes have been, in fact, 

turning a profit, increasing employment dramatically, and providing good economic opportunity. So we will put that in the 

record, too. 

[The information follows:] 

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Mr. MICA. Anyone else have anything they would like to add to 

the record? 

[No response.] 

Mr. MICA. OK. There being no additional unanimous request consents, we will now turn to our witnesses, who have been waiting 

patiently. We thank them for coming in today and having the opportunity to hear from them. 

We will start—I won’t introduce all of them, they are likely suspects we have had before, and are pleased to see. 

Incidentally, I think what has been customary in the past is we 

were offered one witness in the past, and the last time I think 

there was a reference that we didn’t have Mr. Boardman, because 

the one witness chosen by the Minority was a labor representative. 

But today I wanted to make certain that we had both Mr. 

Boardman and a labor representative. So they have been chosen by 

the Minority. 

And to lead, we will start with Mr. Boardman, who has been requested to testify. 

The other thing, too, I would like you to do is please don’t rattle 

on about Amtrak going, you know, to Hades and all of that. What 

I would like to do is focus—this is a hearing on the committee 

draft. If you have suggestions for language, we would like to have 

them. For changes—I have already discussed some of the changes 

I would like to see with Mr. Rahall from the committee print. And 

that is what the purpose of this hearing is, how we can craft legislation that will allow us to increase passenger rail service and create high-speed rail service in the United States of America. That 

is the whole purpose, no other purpose that we are here for. And 

I will cut you off. 

So, if you got statements to read that just go on and on, you are 

going to get cut off. I want to hear specific—this is committee print, 

‘‘Competition for Intercity Passenger Rail Service in America,’’ and 

a hearing on that draft, and I want to hear specifics on the language, positive recommendations or, if you have something critical 

of them that we can work together on, we would love to hear from 

you. But that is the way we are going to proceed. 

I am very pleased and—he takes a beating from time to time, 

sometimes from me unwarranted, and I apologize publicly for 

that—but he does as good a job with the cards he is dealt. I am 

just trying to rearrange the cards for Mr. Boardman. Welcome, Mr. 

Boardman. 

TESTIMONY OF JOSEPH H. BOARDMAN, PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, AMTRAK; R. RICHARD GEDDES, 

ADJUNCT SCHOLAR, AMERICAN ENTERPRISE INSTITUTE; 

ANNE D. STUBBS, EXECUTIVE DIRECTOR, COALITION OF 

NORTHEASTERN GOVERNORS; WILLIAM MILLAR, PRESIDENT, AMERICAN PUBLIC TRANSPORTATION ASSOCIATION; 

THOMAS A. HART, JR., ESQ., VICE PRESIDENT FOR GOVERNMENT AFFAIRS AND GENERAL COUNSEL, US HIGH SPEED 

RAIL ASSOCIATION; AND EDWARD WYTKIND, PRESIDENT, 

TRANSPORTATION TRADES DEPARTMENT, AFL–CIO 

Mr. BOARDMAN. Thank you, Chairman Mica, and Ranking Member Rahall, and all. Good afternoon. 

39 

For 40 years, Amtrak has been America’s only high-speed rail operator, and it has managed the Federal investment on the Northeast Corridor to transform infrastructure and operations. Today we 

are a world leader, in terms of cost recovery and operating efficiency, the most efficient passenger railroad in America, and one 

of the most efficient in the world. 

We share your advocacy for high-speed rail development in the 

Northeast Corridor, and support some of the broad objectives your 

bill seeks to advance, such as encouraging private sector investment, reducing Northeast Corridor trip times, and increasing 

Northeast Corridor high-speed rail service frequency. 

Amtrak is well along in its own initiatives on this front. Amtrak 

has created a ‘‘Next Generation High-Speed Rail’’ plan for the 

Northeast Corridor, which has received many positive international 

peer reviews, and we are now moving forward on implementation. 

A key to that progress will be for Amtrak to secure private funding, using more creative approaches than we have been open to in 

the past. The world’s infrastructure needs have created new financial tools for major world-class projects, such as ours. 

Amtrak intends to use those tools to realize our plan with our 

experience with positive peer reviews, with recent agreements developed with respected partners, and with our improved financial 

performance on the Northeast Corridor, we can do it. We have a 

plan. 

We know how to gain partners. We have the knowledge and experience to make our vision a reality. This is a serious effort which 

offers practical solutions to the situations that exist on the Northeast Corridor, which are not easily understood, and no other entity 

can offer. In order for any public-private partnership to work, you 

need a partner that understands the key facts. And that partner 

is Amtrak. That ensures that Amtrak will have a key role under 

any structure. Perhaps you will rename Amtrak, but it will be the 

same women and men who understand the situation today, and understand the necessary solutions that will be required to carry out 

the plan. 

We believe the approach outlined in this legislation risks slowing, rather than advancing, the development of high-speed rail in 

the Northeast Corridor. It will introduce unrealistic time schedules 

and assumptions. It will fail to provide adequately for transportation safety and security. And it will be more expensive. 

It is important to look at the world leaders of high-speed rail in 

other nations to understand best practices, to study solutions. We 

should adopt and adapt where warranted. However, we must deal 

with the facts of the Northeast Corridor. There is no one that understands the facts of the Northeast Corridor better than the 

women and men of Amtrak. No one. 

The risk associated with applying foreign business models in a 

different context such as the Northeast Corridor is too high. The 

potential for service disruptions, safety failures, and the failure to 

understand the environmental protections is too great for us to 

run. 

Amtrak’s Acela service has demonstrated that this mode can be 

competitive in the United States. Without it, this debate would not 

exist, and there would not be such a clear alternative. 

40 

Many people travel around the world, and are impressed with 

the modern high-speed systems—rail systems—they experience in 

Europe, Japan, or China, and they wonder, ‘‘Why not in the United 

States?’’ 

First of all, every one of those central governments wrote a huge 

check, and they continue to do so. We have not been willing to do 

that. And second, we prioritize matters differently. System safety 

is our number one concern. We will need to avoid the mistakes that 

were made in Britain and China on safety. We also require a 

longer environmental process to protect those that will receive an 

impact from the construction of high-speed rail. 

In closing, I will note that the theme of the bill’s provisions 

would set back the development of high-speed rail by 10 years or 

more, and will cost the economy of the northeast and the United 

States taxpayer a great deal more money. Thank you. 

Mr. MICA. I thank you, Mr. Boardman, and we will be back for 

questions when we have completed all of the witnesses. 

Mr. Richard Geddes, he is an adjunct scholar with the American 

Enterprise Institute. 

Welcome, sir, and you are recognized. 

Mr. GEDDES. Thank you, Chairman Mica and Ranking Member 

Rahall and members of the committee, for the opportunity to participate today in this important hearing. And thank you for the introduction. I enthusiastically support the bill under discussion 

today. The bill would facilitate private participation in the provision of passenger rail service in the United States through the use 

of public-private partnerships, or P3s. 

P3s in transportation have been used successfully for decades in 

countries around the world, and in countries such as France for 

over 31⁄2 centuries. A P3 also provides the best chance for the 

United States to achieve true high-speed rail in the foreseeable future. 

The bill contemplates using P3s in at least two distinct ways: 

through the introduction of competition in the Northeast Corridor, 

and through the introduction of competition on the country’s longer 

distance, lower density routes. 

There is absolutely nothing mysterious about a P3. It simply refers to a contractual relationship between a public sector project 

sponsor and a private sector firm to provide a good or service. 

There are many salient benefits of the P3 approach, and I will discuss just a few. 

First, the introduction of competition. A key social benefit of the 

P3 approach is that it allows competition. Competition may be— 

and I believe is—the single most powerful and socially beneficial 

force that can be introduced into the provision of a good or service. 

Competition is widely recognized by scholars to encourage competitors to provide quality service at low cost, to be responsive to customers’ needs, and to encourage innovation. 

A second key benefit of this proposal is the transparent and least 

cost provision of any desired subsidies. Competition introduced by 

the P3 approach allows for any desired subsidies to be delivered 

transparently and at the lowest possible social cost. While the 

Northeast Corridor may have sufficient density to generate net private investment, non-Northeast Corridor routes may require subVerDate Aug 31 2005 16:23 Feb 09, 2012 Jkt 000000 PO 00000 Frm 00110 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\6-22-1~1\67047.TXT JEAN
41 

sidies to operate under a P3, as they do presently, although I firmly believe that the amount of those subsidies would certainly be 

significantly less. 

Open competitive bidding will ensure that the taxpayer is protected. Any socially desirable subsidies will be provided at least 

cost to the taxpayer, and will also be transparent, which is key. In 

other words, the taxpayers will know what they are paying for, and 

the transparency of subsidies will lead to better policy decisions. 

The third benefit I would like to articulate is the articulation and 

enforcement of key performance indicators. A critical social benefit 

of the P3 approach that is recognized internationally is simply that 

a contract exists. The contract will, of necessity, include clauses 

laying out what actions constitute desired performance on that contract. 

This, then, requires the public sponsor to articulate precisely how 

excellent or poor performance will be measured, and to consider 

what penalties and rewards will be used to incent that performance. This will certainly result in better service provision. The contract can include basic metrics, such as on-time performance and 

frequency of service, as it does in many other industries where P3s 

are used, but also other considerations, such as the cleanliness of 

cabins and restrooms. 

A fourth benefit is the provision—and that is absolutely key in 

this context—is the provision of fresh capital that would otherwise 

never be provided. One of the most obvious benefits of the P3 approach is that it taps into a vast pool of fresh capital that can be 

now injected into our passenger rail system. This allows for renovations, upgrades, and maintenance, including safety improvements, 

to be made much faster. This, of course, saves money. But it also 

results in more efficient service. This is capital that the public sector simply does not have, and will not be forthcoming. 

High-speed rail is a potentially viable service that could offer the 

public a valuable alternative to current transportation options in 

the Northeast Corridor. However, it will be costly to inject fresh 

capital, mitigate taxpayer costs, create competition—which we recognize is key, improve performance, and enhance innovation. The 

public sector should be engaged—the private sector should be engaged as a full partner with the public sector through public-private partnerships. 

Once again, thank you for this opportunity to appear, and I look 

forward to answering your questions. 

And in my remaining 13 seconds I will just note to Mr. Cravaack 

and Mr. Mica that there is a memorial service for Alfred Kahn this 

Saturday at Cornell University that was so over-subscribed that 

they moved it from the university chapel to the largest auditorium 

on campus, in reference to airlines. 

Mr. MICA. Thank you. 

And we will now hear from Anne Stubbs, executive director of 

the Council of Northeastern Governors. 

Welcome. 

Ms. STUBBS. Thank you, Chairman Mica, Ranking Member Rahall, Chairman Shuster, and Ranking Member Brown. Thank you 

for the opportunity to be here today. I am with the Coalition of 

Northeastern Governors, which is a nonpartisan association of the 

42 

governors that works together for issues of mutual interest in the 

northeast. 

Before touching on comments for the bill, I would like to offer 

just a few comments, which are elaborated in the testimony, on 

why the corridor is so important to the northeast, and some of the 

principles that underlie the comments that I will offer today. 

The governors have long supported the Northeast Corridor and 

the larger regional transportation system, because it is both a 

transportation and an economic asset for our region. That includes 

the main stem linking Boston and Washington. It includes the 

branch services to Harrisburg; to Albany and points in upstate 

New York, Canada and Vermont; as well as the service up through 

Massachusetts, Connecticut, into Vermont; and to Portland, Maine. 

That asset is very important for our larger regional transportation 

system, for our economic vitality, and our community. 

The CONEG goals for this northeast network are really quite 

straightforward. We look for greatly expanded rail ridership in an 

integrated, multimodal regional transportation system that works 

for all of the users on the Northeast Corridor, be it the intercity 

traveler, a business person, a tourist, a retiree, a student, or military personnel; for the commuters; as well as the freight railroads 

that need access to the corridor in order to get to their markets. 

And the States believe that this will happen with quality service, 

that is safe, reliable, frequent trip time and price competitive. We 

are looking for ways to reduce the travel time, increase the frequency and the reliability for both the intercity and commuter traveler, and we are looking for higher speed, both premium and regional service, including express service. 

So the States, a number of years ago, adopted several principles 

that guide how we look at this network. Again, I want to touch just 

very briefly on some of the highlights before I get into my comments. First, the Northeast Corridor we do see as a critical regional and national joint use asset, that should be operated as a 

public transportation corridor. And public oversight and control of 

the infrastructure, we believe, is very important to achieving that 

goal. 

States are also co-owners, and they share in the financing and 

operations of intercity and commuter service on the corridor. They 

need to be very closely consulted with any changes in governance, 

funding, and management that does affect them directly. 

We believe that the Federal Government has a lead role in bringing the Northeast Corridor, particularly the main stem, back to a 

state of good repair. And change must occur—any change must 

occur—in a timely and orderly manner, (with States consulted) in 

a way that does not jeopardize the current intercity commuter and 

freight services. 

So, drawing upon those principles, I would like to offer a few initial remarks as the committee considers the appropriate balance of 

Federal, State, Amtrak, and private sector roles in the future of 

intercity rail, and particularly on the Northeast Corridor. 

First, we do see a continuing Federal role. The Federal Government, as we understand it, would retain the underlying ownership 

of the Northeast Corridor right of way. And so, greater clarity is 

needed on that ongoing Federal role, particularly as it may affect 

43 

the future planning and oversight of the public interest in the corridor. 

As I said earlier, States need to be closely involved in any of the 

changes that are contemplated that affect their intercity and the 

commuter services on or off the corridor. 

Both current and future service is very much going to need the 

Northeast Corridor to be brought to a state of good repair. That is 

a significant financial investment that is needed. It is not clear, 

based upon our current reading of the bill, how that would be done 

for both existing and future high-speed services under the proposed 

new ownership and control of the corridor. 

Shifting control of the Northeast Corridor from a public entity 

could also impose a number of financial and liability risks to the 

States. The proposed bill is very clear that one of the evaluation 

criteria is to reduce the need for Federal subsidies. States are likely to have many other concerns associated with a shift in responsibility, such as the potential to transfer the subsidy costs from the 

Federal Government to State and local governments, which, as has 

been noted already, are suffering under severe financial strain. 

We would be looking at the implication of shifting greater liability and insurance exposure to the State, if the corridor was shifted 

to private control and ownership. 

We would be looking to see anything that might impinge upon 

the State’s sovereignty. We particularly noted the broad condemnation authority that is proposed for the new Northeast Corridor Executive Committee. And the States will also be looking to see how 

there will be some consideration or protection of the investments 

they have already made in the Northeast Corridor infrastructure, 

as well as existing intercity passenger rail projects that are underway. 

Connectivity with other rail services, both on and off the corridor, 

is very, very important. Again, we see this as a regional network. 

The current bill does acknowledge that the current commuter and 

freight rail services would continue to have access to the Northeast 

Corridor infrastructure and facilities, but there is no similar assurance that is offered for the intercity service, such as the Keystone, 

the Empire, the Vermonter, that originate off the corridor but need 

access to it. 

Likewise, if you separate the main line from the critical branch 

lines, we are not sure what the details would be on any terms and 

provisions and conditions of such a separation, or the implications 

for a continued ownership and operation of that integrated service, 

if a State chose not to take—seek title. 

And then, finally, the Northeast States are already actively engaged with the Northeast Corridor Infrastructure and Operations 

Advisory Commission, which was created by this committee, and 

the States are very delighted that they are full and equal partners 

on that commission. We are not quite sure how this proposal, 

which does not repeal that commission, but creates a new Executive Committee and gives it future control over the Northeast Corridor and has some similar responsibilities, how the roles and responsibilities of the existing advisory commission and their proposed new Executive Committee would relate to each other. 

44 

And so, thank you for the opportunity to share these comments. 

And I hope they will be helpful to the committee. 

Mr. MICA. Thank you. 

There has been a vote called. 

We will hear first from Mr. Millar. 

Mr. MILLAR. Thank you, Mr. Chairman, Mr. Rahall. Thank you 

for including APTA in today’s hearing. 

As you know, APTA membership is very diverse. Many of the 

international rail operating and management companies, as well as 

the domestic companies, including Amtrak, are APTA members. 

Our members include the oldest commuter rail operators in America, and the brand new one in Denton, Texas, that opened just this 

past Monday. So we have a very diverse membership. 

Understandably, we haven’t had a chance to really distill a comprehensive position, given the diversity of that membership. And I 

am sure you will hear from many of our members, and it is our 

intention to take you up on your offer, and supply you with additional information in the coming weeks ahead. 

That said, I have been asked to testify specifically on the experience of the U.S. commuter rail operators with competitive contracting. By way of background, there is some 27 different commuter rail operators in the U.S.; 8 of those 27 operate with their 

own—or what are known as directly operated systems, completely 

with their own employees, and own all their right of way, et cetera, 

et cetera, and 19 are purchase of service operators. 

Of those 19, 17 have been around long enough to report to the 

Federal Government in the national transit database, which is operated by the Federal Transit Administration. And it is from that 

database that I draw much of my information today. 

Also, I should point out that, while there are only eight directly 

operated systems, they have the lion’s share of the business. Over 

80 percent of the passenger miles, 80 percent of the passengers 

who use commuter rail are on those 8 systems. 

Now, there are many factors that affect the cost of operating a 

system. The 2009 national transit database shows an average perpassenger mile cost of directly operated or contracted to be remarkably similar: $.41 for directly operated, almost $.39 per-passenger 

mile for purchased service. But there is a great deal of variance. 

In the directly operated you can find it for as little as $.33, as 

much as $1.51. For the contract service, as little as $.30, as much 

as $2.55. So, clearly, it is not just competition that affects the cost. 

If you add in fare box recovery to these systems, the picture, unfortunately, gets murkier, with the direct operating having an average of 49 percent cost recovery and the purchased service 40 percent recovery and, again, with very wide ranges. 

I think, as this legislation proceeds, one of the things that will 

be very clear from our commuter rail operators, most commuter 

rail operators choose to compete their services. And whether Amtrak or others win the competition, they want to continue to have 

the right, because they believe the opportunity for competition is 

beneficial. 

Let me give you a couple of closing thoughts before my time expires. First, we need to be clear. All major rail systems in the 

world, including America’s world-leading freight network, have reVerDate Aug 31 2005 16:23 Feb 09, 2012 Jkt 000000 PO 00000 Frm 00114 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\6-22-1~1\67047.TXT JEAN
45 

quired large capitalization from Government. It may have occurred 

many years ago, it may occur on a continuing basis, but we cannot 

escape the fact it requires large public investment. 

Second, public-private partnerships and competitive contracts, as 

I have hopefully demonstrated here, can be useful. But they are no 

substitute for major public investment. And, because of the necessity to integrate rail, passenger rail, with other forms of transportation, we certainly hope—and know this committee has been 

working hard to try to develop a major piece of transportation 

funding legislation that would set a policy not only in this area, but 

across all other surface modes. 

Third, particularly as Mr. Boardman has said today, the Northeast Corridor is incredibly complex. It is one of the most complex 

rail corridors anywhere in the world, and we cannot lose sight of 

that. It is old, it must be updated, regardless of who owns it, regardless of who runs it. And we can’t forget that every day about 

700,000 Americans use the service on that corridor, and they expect to get to work, and they expect to do the other things in their 

life that are necessary. So we must be careful as we move forward. 

Fourth, as Mr. Boardman said, Amtrak does have extensive railroading, extensive Northeast Corridor experience. And—just as 

when Conrail was taken over and the private carriers on the 

freight side realized that some of it was just too complex to disentangle. So we—they kept the private companies, they kept a 

piece of Conrail, as well. So we need to be careful here. We think 

the expertise that Amtrak has, that our commuter rail operators 

have, is quite useful to you. And we pledge to work with the committee as you consider these important issues. 

Thank you. 

Mr. MICA. For 10 minutes the committee stands in recess. Until 

Mr. Shuster returns as stand-by, the committee is in recess. 

[Recess.] 

Mr. SHUSTER. [presiding.] We will bring the hearing back to 

order and continue. Chairman Mica should be back momentarily. 

With that, I believe, Mr. Hart, you are up. 

Thomas Hart, who is the Vice President for Government Affairs 

and General Counsel for the United States High Speed Rail Association. It is a good thing I remembered some of that, because I 

could not read it. 

With that, Mr. Hart, please proceed. 

Mr. HART. Mr. Shuster, I would like to thank Chairman Mica for 

calling this hearing. I would like to also thank Ranking Member 

Rahall and the Subcommittee Ranking Member Corrine Brown, 

and acknowledge my Congresswoman, Eleanor Holmes Norton. 

Thank you for having me here. This is honestly my fourth time 

before this committee on this subject this year. I am glad to be 

back. 

I have put a lot of time and thought in this testimony over the 

last 6 months. I am really glad we have advanced the discussion 

and debate on the need for private investment and increased competition in our rail system nationwide, but particularly, the Northeast Corridor. 

As most of you know, the United States High Speed Rail Association is a non-profit trade association committed to advancing a 

46 

state-of-the-art nationwide true high-speed rail system, to be completed in phases across the country. 

I am the Vice President for Government Affairs and General 

Counsel for the Association. I also am here as the Director of the 

Washington Office of the national law firm of Quarles & Brady. 

This is a real opportunity for progress to be made within this 

committee and within the body of Congress. 

The US High Speed Rail Association works with everybody, and 

that is truly committed to advancing high-speed rail. 

That is reflected in just my schedule this week, where Monday 

I spent a number of hours with Senator Mark Kirk in Chicago. He 

advanced on Monday and proposed private/public partnership legislation in the Senate called the Lincoln Legacy Infrastructure Development Act. 

Also, while I was in Chicago, I spoke before Reverend Jesse Jackson’s Rainbow PUSH Coalition, and brought them up to speed on 

the initiatives for high-speed rail across the country. 

We speak to everyone. We engage with everyone. That includes 

the staff of this committee, both on the minority and majority side. 

I commend their work on this piece of legislation, and look forward 

to working with them and the Members going forward. 

This is a real key opportunity, and I hope that the members of 

this committee take advantage of it. 

This issue divides the committee pretty much down the line, as 

you mentioned at the last hearing, Chairman Shuster. 

Fifty percent of the group here wants to zero out Amtrak, wants 

to basically eliminate funding for them and possibly privatize the 

entire system. 

The other 50 percent, some of them feel that Amtrak is a sacred 

cow, should receive additional funding without oversight and real 

strict accountability. 

The United States High Speed Rail Association is somewhere in 

the middle, literally. We are a firm believer in competition and a 

firm believer of private capital investment in high-speed rail. 

We also recognize Amtrak as an unique service, and we do not 

support the pure privatization of Amtrak in its totality. 

With this divide in Congress and the divide in the Senate and 

the leadership at the Presidential level, it is important that we 

compromise to achieve our goal of bringing private capital into the 

Nation’s rail system and move quickly to do so with the type of bill 

that has been presented by you, Chairman Shuster, and Chairman 

Mica. 

Unfortunately, the political reality is the bill will not pass the 

Senate in its current form. 

At the same time, the status quo is unacceptable. We do not accept Amtrak’s monopoly position in the Northeast Corridor. We do 

not support the monopoly position, and we do not frankly accept 

many of the reasons why Amtrak has been delayed in advancing 

high-speed rail across the country. 

We take what we consider to be the best parts of the concept behind the bill that is presented, and offer our own suggestion. 

We have actually proposed legislation back in March called the 

Private Investment in High Speed Rail Act of 2011. At that time, 

47 

we proposed private investment in Amtrak through increased offering of stock and bonds. 

Amtrak only has one shareholder, that is the United States Government. 

Specifically, Chairman Shuster, we have outlined a proposal that 

would split Amtrak into two entities, Amtrak Operations and Amtrak Infrastructure. 

Operations would run the trains. Infrastructure would maintain 

and manage the rail infrastructure in the Northeast Corridor, and 

it would increase the opportunity for investment up to 40 percent. 

I think that is a fair compromise. We can bring up to 40 percent 

of private equity into Amtrak, sell off 40 percent of the infrastructure subsidiary or infrastructure company, that is currently totally 

owned by Amtrak. 

That is a significant investment that will get the attention of 

Wall Street, but it will maintain Government control over the infrastructure, and will provide for safety and security concerns as 

Mr. Boardman indicated. 

We need to bring in the private sector, and by offering up 40 percent of the infrastructure facility, that would bring substantial 

money. 

After 5 years, we could re-evaluate that structure, and possibly 

increase, give the investor an opportunity to increase its investment by another 20 percent, and move them into a majority position. 

We also suggest that we add an infrastructure bank provision. 

That is supported in the Senate on a bipartisan basis now. We 

need to include that. 

Also, a small business provision. Amtrak has gotten $450 million 

just recently for procurement. They want the money but they do 

not necessarily want the responsibility and accountability for increasing small business participation in this sector. 

A small business provision should also be added to this bill. That 

will go a far way in getting more bipartisan support. 

I look forward to your questions, Mr. Chairman, and other members of this committee, and working with you in the future. 

Thank you very much. 

Mr. SHUSTER. Thank you very much, Mr. Hart, for your testimony. I just want the record to show I have always been one in 

the middle on this issue, too. 

My colleagues on my side have for the last 20 years talked about 

killing Amtrak, selling it off, doing away with it, where my colleagues on the other side of the aisle say it can never succeed without the Government running it. 

I come down in the middle. It is somewhere in between there. I 

think we can do it, and our bill is a start in that direction, I believe. 

Next, Mr. Ed Wytkind. It is always good to have him here and 

hear his views. He is the President of the Transportation Trades 

Department, AFL–CIO. 

With that, Mr. Wytkind, proceed. 

Mr. WYTKIND. Thank you, Mr. Shuster. I want to thank Chairman Mica for allowing me the chance to participate, and of course, 

Ranking Member Rahall, for his strong support for our members, 

48 

and for his support in having the labor movement present its 

views. 

I have appeared twice before this committee in the last few 

months to express our strong opposition to the wholesale privatization and break up of Amtrak. 

You will be surprised to learn that my position has not changed 

today. 

While it may be interesting to discuss different operating models 

for passenger rail in America, we have always argued that if permitted to cherry pick lucrative routes, permitted to keep the cost 

of infrastructure replacement and upgrades off the books, a carrier 

might find a profit on some routes somewhere in the system. 

On the Northeast Corridor, Amtrak is operating in the black, 

above the rail. That may seem interesting but it has nothing to do 

with how you run a national passenger rail system. 

Amtrak’s network, a victim of decades of chronic under funding, 

receives Federal subsidies, but so does our entire transportation 

system, and so does every rail transportation system in the world, 

whether it is privatized or not. 

Our transportation is not just about the wealth it creates for 

transportation providers. It is about the wealth it creates for the 

users of our economy, for the people, for the businesses that need 

transportation to be safe, reliable, and efficient. 

It is about the millions of good skilled jobs that are created in 

the system. 

Mass transit systems do not make money. The employers who 

rely on those systems to transport their employees do. 

Airports and air traffic control are not about profits. They are 

about the billions of dollars in wealth they create transporting people and cargo around the world. 

Highways and ports are not profit centers in and of themselves. 

They are profit centers for the people in the businesses that rely 

on them for commerce, for exporting, and for making sure we have 

a global economy that we are competitive in. 

None of this works without proper public oversight of the taxpayers’ transportation assets, without significant public investment, as Mr. Millar pointed out, and without the cross subsidies 

that have always been the cornerstone of our national transportation network. 

That seems to be like a dirty secret that no one wants to talk 

about, our transportation system has always been based on having 

cross subsidies, and it works. 

Our passenger rail system is no different, which is why we need 

Amtrak as the national network provider for the Nation. 

Let me offer our preliminary analysis, we just got a hold of it a 

few days ago, of the Mica-Shuster legislation. 

First, despite comments made earlier, this is an Amtrak bankruptcy plan. I believe 20,000 jobs are placed at risk by this legislation. 

Removal of the Northeast Corridor from Amtrak is taking away 

its most prized asset, and with it goes the entire national system 

and up to 20,000 jobs. 

49 

Second, it gives the green light to Wall Street to cherry pick the 

parts of the network that can make the most profit, and let the rest 

of the system wither. 

I am sure there are some panelists here who think that is a good 

idea. I do not. 

That approach will not unleash the private sector’s capability to 

provide passenger rail service to a Nation that is starving for more 

train service. No. It will unleash Wall Street’s ability to make 

money for Wall Street. 

Third, longstanding employee protections are eliminated in this 

legislation. I wish Mr. Mica was in the room to discuss it. 

Despite public claims that Amtrak workers would be held harmless, there is nothing in this legislation that holds these employees 

harmless. 

The bill would eliminate Railway Labor Act coverage, thereby 

stripping employees of current bargaining rights and union representation. Amtrak employees would lose all wage rates and benefits and protections in their union contracts. 

So, contrary to public claims, nothing in the bill guarantees anything to the employees of Amtrak. 

The Mica-Shuster proposal also eliminates coverage under the 

Railroad Retirement Act, the railroad pension, unemployment and 

disability benefits system that has been around for decades. 

Thousands would be siphoned from the system in the new entities, the long-term sovereignty of the rail retirement system would 

be jeopardized, and enormous tax increases, yes, tax increases, 

would be imposed on the current employers, including, by the way, 

the private freight railroads. 

We do not think 547,000 retirees, spouses and survivors should 

see their benefits threatened so that billionaires like Richard 

Branson can get richer and evade railroad pension obligations, 

which is exactly what is on the table. 

Assurances have been made that our members at Amtrak will 

also be able to follow their work. The problem is the legislation 

does not do that. All it does is give them some hiring preferences, 

which means they are guaranteed a chance to be considered for a 

job. 

I do not think anybody can pay a mortgage, child care or college 

tuition bill with that sort of promise. 

Lastly, let me talk about Virgin Trains. It has been discussed in 

this committee, and I thought it was important to inject some new 

facts about Virgin Trains’ operation. 

First of all, the system is 35 percent more expensive than the 

State-owned European railways, according to a study done on the 

ground there. 

Between 1996 and 2009, revenues from the U.K.’s privatized system more than doubled. That is great. The problem is the public 

subsidy grew 500 percent. 

Virgin Trains received $1.75 billion in direct Government subsidies for its West Coast franchise, and $14 billion in indirect subsidies to upgrade the infrastructure on the West Coast line. 

As one labor leader described it in Great Britain, people are getting filthy rich on public subsidies. 

50 

We have heard from the committee that Virgin Trains is repaying the Government. The fact is that Virgin Trains takes more 

money from British taxpayers than it gives back. Since 2002, it received $2.6 billion in direct public subsidies. It is true that in 2008 and 2009, it repaid back $81 million. That is 

a single year. In 2009 and 2010, they were again receiving more 

money than they repaid. 

Repeatedly discussing this as if one single year sets out a context 

for the entire Virgin Trains’ operation is not accurate. 

Lastly, service complaints at Virgin Trains are 600 percent higher than the average train operator in Great Britain. 

It is safe to say that the labor movement is not for this proposal. 

We have a long history in the Transportation Trades Department 

of working with both sides of the aisle. 

I have enjoyed developing a relationship with both Mr. Mica and 

Mr. Shuster on all sorts of important transportation issues, but 

this bill written as we see it today is too harmful to Amtrak. 

Our employees are placed at risk, and we think the Northeast 

Corridor is too vital an asset to put at risk with a privatization program that we think has many risks inherent in the ideas in there. 

Having said that, we are happy to be here. I am happy to take 

any questions you might have. Thank you. 

Mr. SHUSTER. Thank you very much, Mr. Wytkind. Mr. Chairman? 

Mr. MICA. [presiding.] Thank you for taking over the chair on 

this important oversight hearing. 

Let me say first that we did conduct three hearings on trying to 

improve passenger rail service. We focused first on high-speed rail, 

and met in New York City and had a great turn out. 

When we talked to folks on high-speed rail, most of the people 

that we talked to believed the best possibility for success in the 

country is the Northeast Corridor. 

Amtrak owns the Corridor basically. We do have some indebtedness. We have the connections. We have regional transportation 

systems that can link and distribute people. It is a real natural. We 

own that. 

The 21,000–22,000 miles of freight rail, we do not own. Amtrak 

has some other little pieces here and there, but that is the most 

conducive. 

I was disappointed with the money that was spent. We had a 

total of $10.5 billion, an $8 billion stimulus. A lot of that has been 

returned—projects that were just destined to fail. They just did not 

make sense. You could not get State support for them, whether it 

was Florida, Wisconsin, Ohio, or maybe even other States. 

I think as a benefit to the Nation, the high-speed rail corridor in 

the Northeast should be our focus. It was not eligible for some of 

that money in the beginning. I think an important step the Obama 

administration took a couple of months ago is designating it as 

high speed, and then also awarding it some money. 

But it was only three-quarters of a billion dollars that came back 

that was redirected to the Northeast Corridor. 

The problem is that is just of taking shears around the edges and 

trying to develop high-speed rail piece by piece, a little appropriation by appropriation, or throwing money at it on a fractional basis, 

51 

which is not going to give us true high-speed rail or what we hope 

to achieve. 

Mr. Boardman, you opened your testimony with saying that the 

key to Amtrak getting into that service is attracting capital. Was 

that not your comment? 

Mr. BOARDMAN. Yes. We think that is one of the keys. 

Mr. MICA. I have looked at it, too. Again, I have told people you 

are going to turn blue waiting. We have challenged you. You came 

back with a plan. It was 30 years, $117 billion to do the whole 

thing. 

If I had my druthers and I could assist you with getting that 

kind of capital all at once, we would do it. That is not going to happen. 

What we want to do is take the funds that we can get from Congress, and then leverage them with the private sector capital. 

You have already had some of these proposals out, is that not 

correct, to attract some private capital? 

Mr. BOARDMAN. We have a solicitation that came back on the 

20th, which was Monday, on looking at what we needed to do to 

finance what our plans were. 

Mr. MICA. One of the reasons I proceeded legislatively is we put 

together PRIIA. PRIIA was a good faith blueprint to establish sort 

of an outline of how we proceed with high-speed rail. 

The money came before actually we were able to move forward 

in an expedited fashion. That is why I think we have to approach 

this legislatively. 

In talking with folks to get the private sector to invest capital, 

they are going to want a return. To do that, they are going to have 

to either get a return from operating the infrastructure in the 

Northeast Corridor, the rail itself and be in charge of it, or the 

operational part of the high-speed rail or the passenger rail service. 

By increasing the ridership, it will increase revenues and pay the 

Government rather than having it subsidized. It still is subsidized. 

We can debate on the figures, not that we do not have to subsidize 

some rail service, but what you want to do is minimize that, and 

with a great route like we have in the Northeast Corridor, we can 

maximize, and I think actually bring capital into Amtrak. 

Part of the question we faced in crafting this legislation, Mr. 

Shuster and I, we were told we should consider two models. One, 

infrastructure separate, and operational separate, and then also a 

turnkey to offer to someone. 

Are you looking at it on that basis, too, Mr. Boardman, and do 

you have the authority to offer it on that basis? 

Mr. BOARDMAN. The way we are really looking at this is that in 

order for profits to come to the Corridor, you have to have a Corridor that can actually increase the amount of service that is available. The trains have to be reliable. They have to be faster. 

The credibility first is being able to have a vision that an infrastructure will work. It was not just us looking at a vision for the 

future; the vision of 220 miles an hour. It was also having others 

look at that vision as well, and looking across the globe at some 

leaders, JR East from Japan. 

52 

Mr. MICA. Was your proposal based on doing a turnkey or division of operation and the infrastructure? Is that what you discussed with these folks, or did you invite both? 

Mr. BOARDMAN. I recognize the answer you want, and I will get 

there for you. I think what we needed to understand first was 

whether we had a competent plan, whether there was a plan that 

would really work, was it too expensive, was it realistic. 

That is why we had these peer reviews, SNCF, and looking at 

JR st and Deutsche Bahn and all, coming and looking at what we 

were doing, asking, ‘‘Is this the right thing or is it not?’’ 

What I said in my testimony is that we could adopt or we could 

adapt the things that made sense. As they looked at it, we began 

to learn some things. 

First, they thought it was a little too expensive. The Japanese 

said you can make your tunnels a little bit narrower. You could 

really think about this differently. We have taken that in. We understand it. 

We think that is probably a good thing in the way Government 

and business works today, if our plan was more now than what it 

is really going to cost. It is not an escalation of cost. 

They also said they thought we would have a lot more ridership, 

and that would improve the revenues. Again, in my own experiences, if you start proposing that it is going to do so much more 

than what you originally started with, and then you have to see it 

is not, then again, you lose credibility. 

The key was to get this vision to be looked at by folks that says 

is this credible, and it is. 

Amtrak is a transportation operating company. There is no 

doubt. That is the core of our business. We do have a very strong 

engineering department, and we are the only ones, and I think you 

know this, that really does electric rail in the United States. 

When you get to your question, are you going to split it up this 

way or are you going to do it another way, we do not know that. 

Mr. MICA. You are looking at all the options. 

Mr. BOARDMAN. We need to do what is necessary for us to get 

the financing and the investments. 

Mr. MICA. For financing, someone is going to want a piece of the 

action. If they see there is a potential for revenue, they are going 

to want to pay their investors. That is the only way we are going 

to attract private capital. 

The private sector just does not come in and do things for the 

sake of charity. They are going to want a return. 

We are going to have to find some way to bring them in. They 

are either going to have to control—again, ownership, we have always said, would stay with the United States or Amtrak. They are 

going to have to control the management of that infrastructure. 

Mr. BOARDMAN. The venture capitalists want their capital back. 

We understand that. 

Mr. MICA. They are going to also want to increase service for 

commuters because they are going to get revenue if there is increased commuter service for freight, for high-speed rail, maximizing the Corridor. 

53 

The second thing is you get an operator. People do use the U.K. 

model and say it all went bad, but the U.K. was a totally different 

model. 

They took all that rail infrastructure in the whole country that 

deteriorated over years, and put it into Rail U.K., or whatever it 

was called. It did collapse. It was a huge thing. It took everything, 

even some of the local commuter routes, and it had very aging, decrepit infrastructure. 

That is not the case in the United States. Most of what you run, 

a service, 20,000 and some odd miles, is over freight rails. 

We are talking about specifically the Northeast Corridor and how 

to maximize its development. 

You do have some challenges in-house. 

When I saw the proposal that was brought out, I am not sure if 

that is really what I want to do, to create another entity. 

It was done for several purposes, one, because there was a model 

that was recommended by some people who might want to do this, 

and they said it would be attractive in that fashion, to have those 

options available. 

We did exactly the same thing you did. We said look at the Corridor and tell us how this could remain—I am not opposed—first, 

I am not trying to do away with Amtrak. I am not trying to limit 

any service they provide or privatize all of Amtrak. 

The most important part of this is do you have the authority to 

move forward and create those entities I described, either to offer 

as a turnkey or to offer separate operations and rail infrastructure? 

Do you think you have that ability? 

Mr. BOARDMAN. I think we are going to have some of the same 

problems everybody would have. We do not own the whole Corridor. The States own almost 100 miles of the Corridor. There are 

issues that need to be worked out. 

Mr. MICA. Can your attorneys look at it and see if you have that? 

I have had oh, we want to do that, Mica, but our charter is this, 

intercity passenger service and whatever we have now. They always come back and say we really do not have that charter or that 

ability. 

What I want from your counsel is—I do not mind giving authority to Amtrak to do what we are trying to achieve. I do not know 

that we need to create a second entity to do this. 

I have to make certain that you have the power to do this, then 

I am going to direct you to do it, to take those offers. 

I cannot believe for the life of me that people here would not welcome the private sector making an offer. I know there have been 

some bad examples around the world, people taking advantage, the 

private sector not writing the RFP right or the terms. 

I do not want to model it after that. I do not want to model anything on what the Virgin Rail did or they did wrong. 

Certainly, you are going to need significant amounts of Federal 

capital to subsidize some of the infrastructure improvements. 

Like you stated today, the key is to attract private capital. We 

have to have the ability for whatever entity, if it is Amtrak or another entity, to attract that private capital. 

Right, Mr. Boardman? 

Mr. BOARDMAN. I think that is correct. 

54 

Mr. MICA. Would you say the same thing? I know you have 

looked at this, Mr. Geddes. 

Mr. GEDDES. Do you mean on the need to attract private capital? 

Mr. MICA. Yes. You represent the American Enterprise Institute. 

Can you attract private capital if it is structured the way we are 

talking? I think you did testify affirmatively. 

Mr. GEDDES. Absolutely, yes. 

Mr. MICA. I want everybody to have a chance here, the 

gentlelady representing the Governors of Northeast. 

What we tried to do, in PRIIA, we created a blueprint for going 

forward. The money got ahead of us, as I said, and we have now 

had a history of some failures on high-speed rail. 

We created the different commissions to try to bring local governments into the process, whether it is the Northeast Corridor, or 

wherever they may pursue this, but what we were trying to do was 

empower and also have some transparency in the selection process 

of an operator. 

If you wanted to select Amtrak who partnered with—I told Mr. 

Rahall he could put in a Build America provision or whatever he 

wants, if we want to do that. Whoever they want to partner with. 

What we thought would be good is to empower you to go back 

and revise PRIIA provisions. We set up the commissions. I have 

been before them. They are working. We wanted to empower them 

in the process. 

If we kept it with Amtrak, we could still do this, too. 

Do you see what we are trying to do there? You have to be 

happy, because you have to be satisfied, like you said, your concern 

was on commuter rail, freight service, utilization of the Corridor, 

but we do not want you outside that loop. 

It is nice to be advisory and everyone ignored you. We were trying to empower the locals and States who have a stake in this, not 

only some ownership. 

Do you see what we are trying to achieve? If you can look at our 

language, and if you see that it needs to be better crafted, we welcome that. 

Ms. STUBBS. We will look very closely at the language. One of the 

concerns is not just two or three members from the Northeast, but 

all of the States’ interests, on and off the Corridor would need to 

be addressed. 

Mr. MICA. Mr. Wytkind, you worked with us when we did the 

PRIIA. Again, we are trying to find a way. We set a blueprint so 

we can move forward and protect labor. 

I know we have some language in here that probably is not the 

language you would like, but we had to write something initially. 

We want to make sure that labor is protected. 

I firmly believe that you can dramatically increase your membership. You can actually significantly improve the benefits with your 

folks. I saw how they got treated in the past versus their brothers 

and sisters in the private rail operation. 

I think there is hope. I welcome your suggestions in language. I 

may not be able to buy everything you give me, but I am trying 

to craft as much as I can to protect labor. 

The secret to this is attracting private capital. They are going to 

go. They are not going to be able to do this in-house. They are 

55 

going to have to have somebody who has done it before take the 

project on and work with them. 

They may be a partner. They may be able to contribute. They 

may be able to help direct the project. Actually, to construct and 

then to operate, I do not think in the future—— 

Mr. WYTKIND. Do you want me to respond? 

Mr. MICA. Yes, go right ahead. 

Mr. WYTKIND. First of all, I did not hear Mr. Boardman say anything other than he is looking for private capital partners. I did not 

hear him say he is going to be sending his operation to a private 

entity to run it for him. 

Second of all, the reason I made the comments I made regarding 

your draft legislation is because this legislation does not hold Amtrak employees harmless. 

None of the statutes that apply to railroad workers are applied 

in this legislation, including Railway Retirement. 

Mr. MICA. I welcome your language. 

Mr. WYTKIND. I am not trying to sort of cook the books here. We 

read the bill. The bill does not apply railroad laws to railroad workers. 

This Florida example that keeps being raised—— 

Mr. MICA. If I add your language, then you will be—— 

Mr. WYTKIND. No. There are a lot of concerns that we have. 

One last point. The Florida example that Mr. Shuster points out, 

that company does not pay railway retirement. If the model of the 

draft bill is applied in this case, the new entities will not pay railway retirement either. 

Mr. MICA. I have no problem moving the train along whatever 

track we get to. It is going to require private capital. 

Mr. WYTKIND. We are not against that. We have not been one 

time against that. 

Mr. MICA. The private capital will require a piece of either operational pie, from an infrastructure standpoint, operations, or both. 

That is going to happen or you are not going to get the private capital. Then we will just chug along at our 83 miles an hour and 60 

some miles an hour. 

I am taking an awful lot of time. I wanted to cover these things 

before I scoot. 

Again, I welcome your suggestions. We are keeping the record 

open. If I have to do more hearings and drag you back in and others back in—a lot of people did not obviously read the bill. We are 

going to try to educate Members slowly on this, if we have to cut 

it up, slice it, and feed it so people understand it. 

It is nothing outrageous. It is nothing to do away with passenger 

rail service or harm Amtrak. 

In fact, I think Amtrak could end up operating many more 

trains, hiring many more people, and being a very viable entity in 

the future if we work together in finding some means of attracting 

capital to this process, with private sector initiatives, efficiencies, 

and ingenuity, that always has made this country and the system 

great. 

I apologize, Mr. Shuster, for taking so long. I wanted to get a 

couple of questions in. 

Mr. SHUSTER. [presiding.] Thank you, Mr. Chairman. 

56 

With that, I will recognize Ms. Norton for questions for 5 minutes. 

Ms. NORTON. I am informed that Mr. Nadler has to leave. 

Mr. SHUSTER. I will recognize him and then come back to you 

later. Mr. Nadler? 

Mr. NADLER. I thank the Chairman. I thank Ms. Norton. 

Mr. Boardman, first of all, given that Amtrak is a for profit corporation, owns the Northeast Corridor, I think the bill raises a serious Fifth Amendment problem with the taking. 

Under your reading of the bill, when Amtrak transfers the 

Northeast Corridor to the Department of Transportation, what 

compensation would Amtrak receive? 

When Amtrak transfers their only stock to the DOT, where private interest is required under the bill, what compensation would 

Amtrak receive for that? 

Mr. BOARDMAN. The way we read it right now is we would receive no compensation for either. In fact, in the history of the taking, that is not what we do in this country, and that is not what 

happened when the Corridor was transferred to Amtrak back in 

1976. The private owners were paid substantially, even though 

they were bankrupt for that. 

Mr. NADLER. You think this would be a taking of both the rolling 

stock and the infrastructure? 

Mr. BOARDMAN. The rolling stock is a little different because we 

owe enough debt on that, that debt would have to be satisfied before they could take it at all. That is owned by the banks. It would 

not have that availability. 

Mr. NADLER. Do you have financing for most of that rolling stock 

now? 

Mr. BOARDMAN. For most of our rolling stock, yes. 

Mr. NADLER. How do you transfer the rolling stock if you are still 

making payments on it? 

Mr. BOARDMAN. As I said, we could not, because we would not 

have the money to pay off the debt. It would not happen. We would 

not have revenue any more. 

Mr. NADLER. Could you transfer it if it assumed the balance of 

the debt? 

Mr. BOARDMAN. That is not what the legislation said. 

Mr. Nadler. No, but would that work? 

Mr. BOARDMAN. If they took the debt with the equipment and all 

of that, it certainly makes it so it does not get lost. 

Mr. NADLER. Amtrak makes a considerable profit on the Northeast Corridor, and cross subsidizes all the other routes; is that correct? 

Mr. BOARDMAN. For operating, yes. 

Mr. NADLER. If this bill or something like it were enacted, what 

would happen to the other corridors, other than the Northeast Corridor? 

Mr. BOARDMAN. What would happen, especially with us being left 

with the debt, is we could not service it, and we could not operate 

without additional Federal subsidy. 

Mr. NADLER. The other corridors, you would have to shut unless 

you had additional Federal subsidy? 

Mr. BOARDMAN. That is correct. 

57 

Mr. NADLER. Do you know what the magnitude of that additional 

subsidy is that would be required? 

Mr. BOARDMAN. One of the difficulties of that, and Rick and I 

were talking about transparency, is that the allocation formula 

across both the direct and indirect makes it difficult to figure out 

completely accurately what should be applied to those other corridors. 

In this particular case, it would be a lot easier, because all the 

indirect costs would then be applied to the other corridors. 

I have not added them up. It would be very expensive. 

Mr. NADLER. It would be very expensive. Let me ask you one 

other thing. The dialogue a moment ago with Mr. Wytkind, he 

made very clear that the labor protections that labor now has with 

Amtrak would not be carried through by this bill as currently 

drafted. Those people who are now under the Railway Labor Act, 

et cetera. 

Let’s assume that were changed, and all the labor protections 

were in fact carried through. What would that do to the financing 

structure of this bill? 

Mr. BOARDMAN. I am not sure I quite understand the question. 

Mr. NADLER. Let’s assume that the bill were changed, and every 

labor guarantee that Amtrak employees have, whether Railway 

Labor Act or whatever, were in fact carried forward. They were 

held harmless. 

What would that do to the financing of the bill? How much cost 

would that impose on whom? 

Mr. BOARDMAN. It is going to cost, if everything goes down, a little over $4 billion over a 5-year period of time. You have the rest 

of the labor protections that are existing out there that would be 

transferred to whoever would be the operator for the future on the 

Corridor. 

Again, I have not added up those numbers. 

Mr. NADLER. Presumably, they would have to put that in the 

bids as cost factors. 

Mr. BOARDMAN. I see. That is correct. 

Mr. NADLER. That would be very expensive? 

Mr. BOARDMAN. That would be as expensive as what it costs for 

us. 

Mr. NADLER. Thank you. Mr. Wytkind, last question. You said 

that even if all the workers are held harmless and every protection 

was carried through, you still have other problems with this. Could 

you just briefly outline what the other problems are? 

Mr. WYTKIND. Sure. Thank you, Mr. Nadler. I do not think Balkanizing our passenger rail system and allowing private sector interests to chase profits is the way you run a national transportation system. That is exactly what this bill would do. 

Those with wealth would try to create more wealth with that 

wealth, and the rest of the system, which relies on cross subsidies, 

relies on services into communities that do not have the density of 

the Northeast Corridor, would all completely wither. 

As Mr. Mica said very appropriately, capitalists do not chase investments that lose money. They are going to chase investments 

that make them money. 

58 

We think this is a flawed model. It has been tried in many industries around the world and around our country, and it always ends 

up giving the public sector the shaft, and the workers the shaft. 

Mr. NADLER. Thank you. My time has expired. 

Mr. SHUSTER. This is already a flawed model; what we are trying 

to do is save it. There are 28 million passengers on Amtrak every 

year. There are 750 to 800 million that ride airlines. I do not even 

know the number of people that drive their cars back and forth to 

work. Millions of people. 

Based on the will of this country, what we have now is not going 

to work, and we are going to end up with a situation where the 

American people at some point are going to say enough, we do not 

want to fund Amtrak any more. 

I think we have a golden opportunity right now in this time in 

our history to deregulate passenger rail in this country. 

For labor, you talk about the 20,000 jobs that are at risk. Well, 

10,000 of them have been lost in the last 10 years. We can make 

an argument for whatever reason. 

This is about, I believe, saving passenger rail in this country, 

getting private sector involvement, injecting the Federal funds into 

it, and as Mr. Mica points out, nobody is going to put money into 

an operation that they do not have at least some control over. 

How will this all look at the end of the day? Maybe it is Amtrak 

as the operator, the entity that takes care of the infrastructure, 

and somebody else comes in to operate, which has been shown in 

other examples. 

You mentioned the Florida situation. That is going to be the next question, Mr. Boardman. How is it that you bid $265 to $97 million? Is that all railroad retirement? 

If that is the case, at least they are going to be there in the future paying a wage instead of not having a wage. 

We are dealing with Social Security and pensions in this country. 

We have to figure out how to make things pay for themselves or 

we are not going to have them for the future. That is what we are 

trying to do in this bill. 

Mr. Boardman, on that Florida Tri-Rail situation, $70 million difference in the bid. Why so much? 

Mr. BOARDMAN. First of all, let me tell you this, there are about 

250 million riders of rail in this country. Amtrak is responsible for 

most of those riders because a large portion of that comes from the 

Northeast Corridor. 

The company that bid against us in Florida did not have liability 

costs to pay, like Amtrak does. It did not have the legally obligated 

Railway Labor Act. It did not have railroad retirement to protect 

the employees. There is always an additional amount of cost to the 

reality of what they were really trying to do. 

Furthermore, and I want to come back to something you said 

earlier, Mr. Shuster, and that is you are not supposed to go to work 

for the other company until you have left the company you are in. 

That is what the lawsuit is about. 

It is not about the fact that people cannot move from one company to the other. I have been lobbied by all the political people 

to tell me that we should drop this lawsuit and it will not be 

dropped. 

59 

Mr. SHUSTER. Again, I think it is taxpayer dollars that should 

not be spent. 

As far as accounting, and you have been over there now for 2 or 

3 years, I think things have improved, especially when it comes to 

accounting. 

I understand you took somebody from FRA to come over to your 

shop, and it improved. 

In the past, accounting on all accounts has not been a strong 

suit. It has been miserable as far as I can tell at Amtrak. 

What are you doing to improve accounting? If we are to attract 

private capital, they want to do due diligence. They want to look 

at the books. Right now, I am not so sure they could figure out 

what is up at Amtrak. 

Mr. BOARDMAN. One of the most important things for Amtrak 

was to be stable and continue to follow through and not be distracted by everything that comes down the pipe for Amtrak, and 

that has been one of my efforts at Amtrak for over 2 years, really 

to try to stabilize, not go in and change the entire management 

team like has been done in the past. 

There was a series of almost seven different presidents for this 

company, and they changed the CFO, and they changed the senior 

management, and they changed this and they changed that, and it 

is extremely difficult for a major company like this to be able to 

sustain that and continue to provide the improvements organizationally, financially, and otherwise that are necessary. 

There have been 8 years’ worth of labor difficulty at Amtrak, and 

there has been a culture of blame as opposed to being a culture of 

accountability. That is beginning to change. 

I get somewhat depressed when I see all of this occurring because we can see so many things that are improving for Amtrak 

and for the customers of Amtrak and for the safety of Amtrak, and 

it is just another disruption that throws us again to the wind. 

Mr. SHUSTER. Ms. Stubbs, I have word from the administration 

in Pennsylvania they are very interested in what we are putting 

forward here. I would like to hear what the other Governors out 

there are saying. 

Former Governor Ed Rendell is very much on board, excuse the 

pun, with what we are trying to move forward here. He has been 

out traveling the country talking about these types of private/public 

partnerships. 

Could you let us know? 

Ms. STUBBS. The comments I made today are based upon a longstanding policy. What we want to do is look very closely at the bill, 

hold it up against the principles that we have, and look at how it 

would work, both for intercity and for commuter. 

I think I have indicated some of the areas that we feel would 

need to be addressed. 

Mr. SHUSTER. Any particular States that have been more aggressive or positive? 

Ms. STUBBS. It is still undergoing review in all of our States. 

Mr. SHUSTER. I think you will find Pennsylvania is going to be 

very, very interested. 

Ms. STUBBS. I know they are. 

60 

Mr. SHUSTER. Mr. Geddes, could you talk a little bit about what 

you have studied, looking at Europe and Japan, and the findings 

of competition there and its impact? From what I see, it has been 

positive. Can you talk a little more about that, the competition aspect of it? 

Mr. GEDDES. I can, Mr. Shuster. I was on sabbatical last year 

studying public/private partnerships in transportation in Australia, 

which began with the Sydney Harbor Tunnel in the mid-1980s. 

The Government simply did not have the money to build the tunnel under Sydney Harbor. The bridge that we are all familiar with 

in Sydney Harbor was completely and utterly congested, and that 

has been an extremely positive piece of infrastructure. They moved 

on to do competitive bidding. 

My main focus has been in highways, roads, bridges and tunnels. 

They did an extremely complicated P3 in Melbourne called 

CityLink, which has been very successful according to accounts of 

everybody I was able to talk to in Australia. 

It introduces competition. It is a competitive bidding process to 

win that. Financing on CityLink was provided by the private sector, which I think is the main focus here. Now, the State of New 

South Wales, Sydney is in the State of New South Wales, which 

is predominately a labor Government in Australia, is dedicated to 

doing all highway transportation projects going forward through 

P3s. 

They moved completely away from the traditional financing 

model and moved in the P3 direction because they are such firm 

believers in the P3 approach. 

It has been successful. One issue I did not have time to discuss 

in my testimony but I think is important is not only competition, 

which we all agree competition is socially beneficial, but the transfer of some risks to private investors. 

Private equity investors are getting a rate of return, of course, 

but they are being compensated for taking on real risks that are 

not illuminated through the traditional model. They are simply 

hidden and absorbed by taxpayers. Taxpayers are absorbing risks. 

I think a major benefit of the P3 is to do that. 

If I may, one thing I think I have learned from that experience, 

and this really addresses Mr. Mica’s point of emphasis on what 

specifics we recommend as a panel in the legislation. 

If you want to attract private sector investment to sunk, longlived assets of this nature, you need to provide in this bill the institutional stability that ensures those people that they will get that 

return in the future, and the Government will not do something to 

reduce the value of that asset. 

If I had one lesson from my sabbatical experience, it would be 

to design the legislation to provide a stable institutional structure, 

to which the investors from around the world, which is good, would 

look and say hey, I am going to put my dollars in there. These are 

long lived socially beneficial investments, and I know they will not 

be ex-appropriated by the Government down the road. 

The worse possible thing is what happened in Pennsylvania. I 

know Governor Rendell tried up and down to get it done with the 

lease of the Pennsylvania Turnpike, which would have been wonderful for that State, and the investors came up with their bids, 

61 

which were multimillion-dollar costs to produce the bid, and then 

at the last minute, the State legislature changed its mind. 

That type of time in consistency is what I would hope in the bill 

you could try to avoid in the future. 

Mr. SHUSTER. That is a great point. With the Pennsylvania Turnpike situation, there was not as much money as was projected, 

number one, but second, the taxpayers need that same kind of 

guarantee. If you lease an asset, you are not going to squander the 

money and 20 or 30 years down the road look in the bank and say, 

‘‘Oh, we have spent it all.’’ 

The last thing I want to say is not a question, Mr. Wytkind, it 

is a request. You have a very clear stance, and I understand that, 

but you talked about discussing other models. 

Not today, but I would love for you to put together your ideas 

on how you do this, as long as it has a private element to it. 

I just do not believe we can go forward if your solution is the 

Federal Government ought to give $3 billion a year for the next 10 

years to Amtrak—it is not going to happen. 

We are in a world where we have to be realistic about where we 

are going with this. I believe that what we are proposing is realistic. That is why we are having this hearing today, to talk about 

other ways to do this. 

I would welcome you to present me with something that is reasonable, and it does not have to be a 40-page paper, but it should 

include a private sector element talking about the various labor 

guarantees and things we can do to get you to consider moving in 

a different direction. 

Mr. WYTKIND. I will not give you the 40-page answer now. I 

think you would throw me out for good. 

I am happy to come back to you with all of our thoughts. We 

have provided some of them today. As I have said publicly, and we 

are going to continue to say, Amtrak needs to be the centerpiece 

of this proposal. 

We are not against private sector participation. A significant portion of my membership that I am elected to represent works in the 

private sector. 

Mr. SHUSTER. And they make more money. 

Mr. WYTKIND. That is debatable depending on the job. The point 

I am making is we are not all biased and saying the private sector’s role is not important and therefore we should ignore it. 

As long as you understand the proposals I come back to you with 

are going to be with the centerpiece of the proposals being Amtrak 

as the primary high-speed rail provider for the country. 

Mr. BOARDMAN. Can I add, Mr. Shuster? 

Mr. SHUSTER. Yes. 

Mr. BOARDMAN. I thought Mr. Geddes brought up an excellent 

point on institutional stability. I did not have the term of art when 

I was trying to explain what we were trying to do. 

It is critical. I would not want to see this legislation damage our 

ability to move forward now. He may not have been applying it exactly how I am using it right this minute, but the fact is the stability of Amtrak and its future are critical to have any confidence 

in us as the centerpiece or anything else. 

62 

This legislation and the way that we are characterized on a regular basis does not sustain that confidence in the investing public, 

and it is not accurate. 

Mr. SHUSTER. Mr. Hart? 

Mr. HART. Yes, Chairman Shuster. I define it as a political sustainability, and it is a very key factor. That is why it is important 

to generate bipartisan support. 

I believe you can do that. There are 29 States in the country that 

have public/private partnerships in operation now. There are many 

countries, including the nine models that I referred to for public/ 

private partnerships in rail in my long form testimony today. 

It is nothing to be afraid of. It is something to be encouraged. 

The private sector is ready, Congresswoman Norton, to invest in 

Amtrak and invest in the Northeast Corridor. 

In my preparation for today and in my preparation for earlier 

testimony, I met with major financial institutions in New York, in 

and around the world, that are willing to invest capital under the 

right circumstances, that do not necessarily exploit the opportunity. They do want a return on their investment. They do want 

to minimize their risks. 

There is a key factor regarding political sustainability that overrides everything. 

I think this is an opportunity for the committee, bipartisan committee, one of the most bipartisan committees in Congress, to show 

real leadership. 

The timing is now. As we approach the debt ceiling debate, which 

is going to really tear Congress apart and possibly the entire country apart, this opportunity here, the leadership of this committee, 

can impact even that debate. 

Public/private partnerships are the way of the future. To deny 

that fact is to deny the reality that we are not going to be able to 

fund public transportation to the levels that we have in the past. 

I wish we could. We just cannot. 

Public/private partnerships let the money players come to the 

table. That is one of the things that is absent on this panel. I am 

hoping there can be another hearing where we bring the real 

money players to the table and give them an opportunity to put 

their proposal and their money on the table. 

That was one of the big problems with the move to reject the 

Florida plan. It did not give the private sector the opportunity to 

show they were willing to put money up. 

Frankly, the folks that advocated for the rejection of that money 

played right into Amtrak’s hands. They could not create the competitive environment to bring in other international and domestic 

players that wanted to compete with Amtrak on a true high-speed 

system in Florida. That was wiped away, and everything fell back 

to Amtrak by default. 

We have to create an opportunity for the private sector to speak 

for itself, put in the terms and conditions that are acceptable, and 

then let the Congress, DOT, Amtrak and others evaluate it. The 

money will speak for itself at the time they are given the opportunity. 

Mr. SHUSTER. Thank you very much, Mr. Hart. With that, I yield 

to Ms. Holmes Norton. 

63 

Ms. NORTON. Thank you, Mr. Chairman. I did not say the private 

sector did not want to invest in Amtrak or anything else. I said 

there was no passenger rail system that was never subsidized, and 

that is the operative word here. 

I just want to say for the record, the chairman indicated that 

when I said there had been no high-speed rail bill before, he indicated he would correct me and cited a bill actually passed when the 

Democrats were in control of Congress, although in fact, President 

Bush signed this bill. 

It was a bill for good repair for Amtrak. It was not a high-speed 

bill. It had a small, small subsidy for private proposals for highspeed rail. 

Bush will not be remembered for high-speed rail or even for Amtrak. He will be remembered for year after year trying to zero out 

Amtrak. 

Actually, Mr. Shuster was on the Floor with me. There were 

scores of Members trying to save Amtrak from being zeroed out 

and put through bankruptcy. That is all you can give Mr. Bush 

credit for. 

I find it very interesting. The majority here has had conniptions 

about the affordable health care bill, too big to swallow. 

Can you imagine what would happen if in its present form we 

were to pass this bill. It would be a nuclear shock to States all 

around the country. This has no chance of passage. 

That is what annoys me about the bill. This is a serious matter. 

This is a committee that has always been very practical. How can 

we get something done. This is not the way to get something done. 

For example, Mr. Boardman, you indicated, I believe I read in 

your testimony, that this proposal would actually set back the development of high-speed rail. I think you said by a number of 

years, 10 years. I do not have it before me now. 

I do remember reading something that you wrote that said this 

proposal would mean the end of our national passenger rail system. 

I would like you to comment on both of those. 

Mr. BOARDMAN. I think the end of the system, let me just say 

it simply, with the debt we would be left with, we would not be 

able to service that debt, and as a result of that, without an increase in additional Federal assistance, there would be no way for 

us to continue to operate any of the non-profitable—— 

Ms. NORTON. That is what I want to focus on. This has been 

about biting off the only profitable part of the system. 

If in fact Amtrak operated today with only that part with no obligation to a national system, then Amtrak would indeed be profitable. That ought to be said and that ought to be understood. Amtrak in fact pays for itself, but it also pays for a lot else. 

I want Mr. Geddes, for example, to tell me what we do with the 

23 States and 233 local communities all over the country who depend upon Amtrak with subsidies coming in part from Amtrak, of 

course, they come from the Federal Government, but they also 

come in part from Amtrak. 

What do you want to do with them, while you are out making 

money with one section of the railroad? 

Mr. GEDDES. Thank you for the question. I have been waiting to 

address that question for a while. It is terrific. 

64 

I am in no way, shape or form opposed to those subsidies, as long 

as subsidies are (a) transparent; (b) provided in the least possible 

cost. 

Ms. NORTON. Which subsidies? 

Mr. GEDDES. Subsidies to the routes you are referring to, to these 

small communities. 

Ms. NORTON. Part of those subsidies come from Amtrak, the 

Northeast Corridor. 

Mr. GEDDES. Some of the subsidies come from the Northeast Corridor. 

Ms. NORTON. The other comes from the Federal Government. Do 

you want more from the Federal Government? 

Mr. GEDDES. There is absolutely no policy reason why those subsidies need to come from riders in the Northeast Corridor. There 

is no solid social policy reason why a rider between Washington, 

D.C. and New York should be cross subsidizing a ride on Amtrak 

say from Des Moines to Seattle, wherever, pick your towns. 

Ms. NORTON. That is a very interesting notion of transportation. 

Some States, Mr. Geddes, in our system regularly subsidize other 

States. This is a 70 percent federally funded corporation. 

Some States fund smaller States, and the other way around. This 

is a union. Maybe you do not think there should be cross subsidy, 

but I do not understand why. 

Mr. GEDDES. No, madam. This comes from 20 years of teaching 

Economics 101 after I received my Ph.D. from the University of 

Chicago. 

A cross subsidy of the nature you are referring to generates social losses because it distorts the price system. We have recognized 

that in economics for over 40 years. 

There is a problem, a serious problem associated with building 

cross subsidies into a system like this. 

Ms. NORTON. I get your point, Mr. Geddes. The people of the 

United States will subsidize these 23 States and 233 communities 

rather than getting it from the private sector or the fare box of Amtrak. 

I would like to ask you another question. What do you think 

about the proposal to pay people $2 million to write a proposal, in 

light of your notion that the private sector should take responsibility? Should it not take responsibility for writing its own proposal? 

Mr. GEDDES. Absolutely, and they would take responsibility. 

Ms. NORTON. They should not give $2 million from the taxpayers 

for people to write a proposal? 

Mr. GEDDES. We have a giant body of law called antitrust laws 

that is intended to promote competition. We as a society believe 

that competition is per se good and positive. 

One of the things that this proposal would do is encourage that 

competition. 

Ms. NORTON. We pay corporations in order to encourage competition among corporations? Do I hear you right? 

Mr. GEDDES. You want to get more bidders into the process. 

Ms. NORTON. Should there not be an indication of whether or not 

a bidder, a serious bidder, was willing to put his own capital up 

to bid? 

65 

Mr. GEDDES. They are at risk of losing that if they do not win 

the bid. 

Ms. NORTON. Mr. Geddes, I am chair of a subcommittee that has 

to do with construction and leasing for Federal buildings throughout the United States. Regularly, they engage in competition. We 

put out an RFP. They engage in a competition. They lose—of 

course, there is a way of taking care of that in the tax system or 

at least part of it—they lose millions of dollars every year competing for Federal contracts. Indeed, that is the way it has been 

throughout the Federal system. 

Why should this be an exception to how the Federal Government 

does business with the private sector if it wants to do business 

with us? Put up your own money. We will know you are serious. 

I am not going to pay you. 

Mr. SHUSTER. I would ask the gentlelady to wrap up. We want 

to make sure we get to Mr. Sires. They are going to call votes here 

shortly. 

Ms. NORTON. I will wrap up very shortly. I just could not stand 

it. 

Mr. GEDDES. It is used throughout the world, Congresswoman. 

Ms. NORTON. It is not used in the United States of America. That 

is one part of this proposal that has to go or be laughed out of the 

proposal. I think the reason it is in the proposal is nobody was willing to put up his money in the first place when the word went out 

for private proposals. 

I just want to say Amtrak is itself a public/private corporation. 

The public part is us. 

Mr. SHUSTER. I am going to ask the gentlelady to wrap up. Mr. 

Sires has been here for most—— 

Ms. NORTON. I am going to defer then to the gentleman. 

Mr. SHUSTER. I thank the gentlelady very much. Mr. Sires? 

Mr. SIRES. Thank you very much. Mr. Hart, I have to say you 

scared the hell out of me with your statement to bring money players to the table. 

It seems that every time we bring money players to the table, 

look at the housing industry when we brought the money people, 

the entities, to the housing industry, today, we have more foreclosures than ever, with some of the practices that were going on. 

I am very concerned because the outcome of privatizing this is 

the bottom line is profits and a lot of little people are going to get 

hurt in this process. 

If we do not find a way of protecting some of those little people, 

the pensions, the retirements, we are hurting a lot of Americans. 

I am very concerned about that. Briefly, because I want to ask 

a question to Mr. Boardman. 

Mr. HART. The analogy of the financial industry is a little bit 

misplaced, but I do recognize your overall concern and sincerity in 

raising the issue. 

There are provisions and ways in which the financial sector can 

be beneficial. They can increase the quality of service for Amtrak. 

Put Amtrak to the test of a true business case. 

How much is the Northeast Corridor worth? How much is the infrastructure in the Northeast Corridor worth? I have not heard a 

66 

number from anybody to actually tell me what is the value of the 

asset we are talking about. 

It seems to me Amtrak should have that answer. Certainly, if it 

was a true for profit operating company, we would have that answer, and also a number of other answers to how to improve the 

operations of Amtrak. 

It is a very tough question. The private sector does bring more 

than just money. They do bring money, which we absolutely need. 

They also bring a business discipline and a focus to detail and operations that would be helpful. 

I am not suggesting in our proposal that the private sector take 

over. I am suggesting that up to 40 percent of Amtrak’s infrastructure be given the opportunity for private investment. 

Mr. SIRES. They will need subsidies then. 

Mr. HART. Public/private partnerships are not a replacement for 

public investment in rail. They are a supplement to that. 

Mr. SIRES. I just want you to know that I came from the private 

sector. I had a business for 20 years. I had to meet payroll, health 

benefits and everything else. 

Mr. Boardman, what percentage of the business that Amtrak 

does now is privatized? Do you do any privatization of any of the 

functions of Amtrak now? 

Mr. BOARDMAN. I think in terms of looking at contracts out 

there, we probably have about 60,000 contracts that are private 

contracts for the work we get done. Amtrak itself is a private business in so many ways. 

We have clearly a solid way to bring the private sector in and 

do work, and we have that all over our railroad. 

Mr. SIRES. The concern that I have also is in my district, the 

New Jersey Transit brings people into New York. The New Jersey 

Transit moves a lot of people. 

I am also concerned about the freight lines. I have the ports in 

my district, and we have to move some of this freight away from 

the highways. I do not think the New Jersey Turnpike can take another truck, quite frankly. 

How is that going to impact it if we go through this privatization? We may not have the right-of-way on some of these lines. 

Mr. BOARDMAN. I think there is a lot of complication to that. We 

really do not know that. We know we need to improve the weight 

capacity for a lot of the freight that is out there on the Northeast 

Corridor to 286,000 pounds per car. 

I think it is something we have to get into the detail of, of what 

the economic and industrial development opportunities there. 

There are additional people that can invest in the concept, but we 

have to have that institutional stability to really get people to understand that we are going to be around. 

The agreements that we have made now will continue to be held 

for the future. I think this bill has created a lot of concern about 

that happening. 

Mr. SIRES. How about the commuter lines? 

Mr. BOARDMAN. Same way. The New Jersey Transit in particular 

really has been the largest growth on the Corridor, and yet when 

they get into Penn Station, there is nowhere for them to go, so they 

67 

have to come back through the tunnel, so they demand a large percentage of our capacity. 

We need to find another place to put them in Penn Station to 

really make the fluidity work on the Corridor. 

Mr. SIRES. The other concern that I have is the security. In my 

district, I represent the two most dangerous miles in the country. 

We have the Lincoln Tunnel. We have the Harlem Tunnel. You 

name it. We have it in our district. 

How do you think the security is going to be impacted if you privatize a lot of this service, they may not go through a screening 

process for some of these people going through these tunnels. 

Mr. BOARDMAN. I do not know how it will be impacted. Right 

now, it is not addressed at all. 

Mr. SIRES. Mr. Geddes? 

Mr. GEDDES. That is the very beauty in the core of the P3, that 

you write that detail into the contract. You say that the security 

procedures will be followed this way, and if they are not, there are 

penalties associated with that and they are articulated. 

Mr. SIRES. I heard you talk about contracts before. I was an 

elected official. I put out things to bid. We put out that certain 

things have to be done in the contract. It is just another layer for 

the supervisor to make sure it happens. 

Really, most people out there, when you are going to make 

money, a lot of the stuff in the contract gets cut, including employment for some of the people that are there. 

Mr. SHUSTER. I thank the gentleman from New Jersey. A question to Mr. Boardman. How difficult would it be for Amtrak to provide an inventory of what they had and the value? Do you have a 

valuation of what the Northeast Corridor is worth? 

Mr. BOARDMAN. I will look and see what we have, Mr. Shuster, 

and provide it. 

Mr. SHUSTER. I would appreciate that. Mr. Millar, you have been 

very quiet and very patient. I would like to ask you a question concerning the fact that there are 27 commuter rail systems in the 

country, 19 contracted out. 

Mr. MILLAR. Yes, sir. 

Mr. SHUSTER. Four of them actually are contracted to Amtrak. 

Can you talk a little bit about the difference in operations, the success or lack of success? 

Mr. MILLAR. Yes. Certainly, Amtrak as a management company, 

if I can speak of it in that way, has been a very successful provider. 

They have won competitive proposals, as was pointed out earlier. 

They have also lost some competitive proposals. 

I think the fundamental point I was trying to make is that our 

commuter rail members who choose to purchase service want to 

make sure that they continue to have that right, that it is in fact 

beneficial to them, and in terms of service quality, that is a judgment they and ultimately their customers have to make as to what 

is the best, what is the worse. 

We certainly know of examples with all kinds of different providers where one provider will do very well in one city. They will 

go to the next city and not do so well. 

68 

It is very difficult to generalize beyond the basic point, which is 

competition tends to be something that works and makes things 

better. 

Mr. SHUSTER. That is one of the things in this draft bill. We 

want the States to have the ability to do exactly what you have 

done. It sounds like it has been overall positive. 

Mr. MILLAR. Yes, sir. 

Mr. SHUSTER. Thank you very much. With that, I will yield 5 

minutes to the gentlelady from Florida. 

Ms. BROWN. Thank you, Mr. Chairman. First of all, Mr. 

Boardman, I want to thank you for your leadership and service, 

and for all of the Amtrak employees. 

The feeling of the chairman and others is not the feeling of all 

of the Members. It is not the feeling of the traveling public. 

Last Friday, just for your information, I was flying from Washington to Connecticut. I sat at the airport, after going through security for 3 hours, the flight was cancelled. The next morning, I 

took the flight to Connecticut. 

Saturday morning, I took the train from Connecticut to New 

York. It was on time. It was clean. There were a lot of students 

and traveling public. It was wonderful. I was able to do my work 

as I traveled. I know you do the same thing in the winter time 

when that plane would not have left even the next day in the snow. 

I want to thank you all. The Congresswoman mentioned something about providing money to Amtrak. For years, it was zeroed 

out funding. 

Only with this administration, I want to be clear, it was the 

Obama administration that put the money for Amtrak, not just for 

Amtrak, for high-speed rail, based on the bill that we passed. They 

did not make it up. We passed the bill and they implemented it 

based on that. 

My question to you, you wrote a letter yesterday to the Congress. 

Would you elaborate on that letter, saying what this bill would do 

as far as demolishing Amtrak? 

Mr. BOARDMAN. Sure. I think this bill really does not go to the 

depth, the understanding, the subtleties, the complexities, the difficulties that it takes to operate a railroad. 

I think I am hearing today that a lot of people agree with that, 

there are other things that need to be done here that really would 

make this bill, if you had a bill, a practical one. 

You do not need to do this bill. Almost everything that is available in this bill and that you want to do with the railroad in the 

United States is available to be done with and through Amtrak. 

There has to be stability. There has to be a stable funding 

source. I think Mr. Geddes said the right things about the long-distance trains, quite frankly. It is a policy decision. 

If you are going to decide that you are going to provide the services across the country, you need to pay for those services. Those 

services should be rendered at as low a cost as we can get them 

to. It is not always easy to get to that low cost. 

Especially as we look today, and it gets more complicated for the 

future, you have to understand the capital that needs to be applied 

and given and paid for to the freight railroads. You have to underVerDate Aug 31 2005 16:23 Feb 09, 2012 Jkt 000000 PO 00000 Frm 00138 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\6-22-1~1\67047.TXT JEAN
69 

stand you are going to need to make continuing investment in the 

capital of the Northeast Corridor. 

If questions did not get answered, I think Anne brought it up, 

are we going to bring the Northeast Corridor back to the state of 

good repair, and the master plan there today, even without highspeed rail, is $52 billion to bring that back, to bring it where it 

really needs to be to provide that reliability. 

The private sector is going to be interested in whether that is 

there or not, and if they are going to put part of their dollars forward, they need to know they have that public partner along with 

an operating partner like us. 

When high-speed rail comes to really be looked at and when this 

whole program comes to be looked at, it has to be looked at in its 

whole. 

If you take away the Corridor and you decide you are not going 

to have a policy of having a connected mobile rail system in the 

country, you have begun to destroy Amtrak. 

Ms. BROWN. I attended every single hearing. I did not hear 

maybe what the chairman and others heard. He asked for recommendations on the bill. I would say strike everything and start 

somewhere else. 

I want to ask about the labor protection. The chairman constantly mentions the protection is there for labor, and maybe you 

all discussed it when I was out of the room. 

Mr. SHUSTER. He did. 

Mr. WYTKIND. Let me explain it to you. I did discuss it with him. 

Nothing in this legislation guarantees anything to Amtrak’s employees. The Railway Labor Act, Railroad Retirement Act, none of 

the statutes apply to railroad workers, despite public comments 

made that employees of the company will be held harmless. 

Secondarily, not even the hiring preference really has much 

value to Amtrak workers. All they are guaranteed is a chance to 

be considered for a job. That is it. That is really all I can find in 

this bill that gives Amtrak employees any confidence they will have 

at least a chance to be gainfully employed. 

As far as I am concerned, our public comments say close to 

20,000 jobs are at risk, and that is perfectly valid based upon the 

current draft legislation. 

Mr. SHUSTER. The gentlelady has 1 minute for a final question 

or remark. 

Ms. BROWN. The chairman constantly talks about Virgin Air and 

how they make a profit. The point is the British put in over $50 

billion; is that correct? $15 billion. This is the second round. I had 

been over there for the first round when they took all of the system 

back and bid it out again. 

They put $15 billion in recently, but they only receive $168 million profitability. 

Mr. BOARDMAN. We talked about that a little bit earlier. I think 

one of the things that came to light is that we were really talking 

about 1 year where there was any profitability, and for the rest of 

the time, there has been additional subsidies applied, not just Virgin, but the other private train operating companies that are over 

there. 

70 

The way they get that subsidy is to bid for the cheapest subsidy 

for that particular line. 

Britain is going through another soul searching again about taking this back to a more vertically integrated system. The public 

share of the operating cost is now about 50 percent of the total, as 

opposed to 40 percent, even though they have a great deal more 

ridership, their subsidy levels have increased, and the total cost to 

them is about six times where it was back in the late 1990s. 

Ms. BROWN. I went to the hearing up in New York. One of the 

things is there were people from the Governor’s Office. It was elected officials. 

The point is it is not just one system. It is working together. The 

point is Big Government is going to come in and take over. 

I cannot believe that is the mindset of the Republican leadership 

on this committee. 

Mr. SHUSTER. The gentlelady’s time has expired. They have 

called a vote. I want to wrap this up so we can all get out of here. 

I appreciate the gentlelady’s passion for rail in this country, and 

I appreciate her requesting to have this hearing today. 

Again, I want to thank all of you for being here today. I believe 

it is time to make a change in this country, to deregulate passenger 

rail. 

Mr. Wytkind, I am looking forward to seeing your proposals. 

Forty pages is fine, if it is that kind of detail, and I would like to 

see it. 

Again, I appreciate everybody being here. I thank you all for 

coming, and I am sure we will be talking again. 

Ms. BROWN. Can I have an additional 30 seconds to close? 

Mr. SHUSTER. Sure. Thirty seconds and then I am going to gavel 

you down. 

Ms. BROWN. That is fine. 

Mr. SHUSTER. I have been here for 4 hours. You have not. 

Ms. BROWN. Let me just say one thing. This proposal, I promise 

you, is dead on arrival in the Senate. It is going nowhere. We 

should be dealing with the aviation bill, but what we are dealing 

with is a pipe dream that will end when it arrives at the Senate. 

Thank you very much. 

Mr. SHUSTER. I appreciate those closing remarks. I certainly disagree with them. 

I think this is going to be a talking point in the House, and I 

think for people across the country as well; as I mentioned earlier, 

there are 350 million passenger train rides in the country, but only 

28 million of them occur on Amtrak. The American people are 

going to stand up. I have already heard them in circles, even liberal circles in this country, saying the one thing we should do is 

end Amtrak as it exists today. 

We are going to have a lot of conversations. 

I believe, as Chairman Mica believes, that eventually there are 

going to be significant changes to the way we provide passenger 

rail in this country. 

Again, thank you all for being here, and this hearing is over. 

[Whereupon, at 2:03 p.m., the committee was adjourned.] 

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