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80–348 PDF 2013

AMTRAK’S FISCAL YEAR 2014 BUDGET: 

THE STARTING POINT FOR REAUTHORIZATION 

(113–8) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

RAILROADS, PIPELINES, AND 

HAZARDOUS MATERIALS 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 11, 2013 

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 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

TREY RADEL, Florida 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

VACANCY 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

JEFF DENHAM, California, Chairman 

JOHN J. DUNCAN, JR., Tennessee 

JOHN L. MICA, Florida 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

LOU BARLETTA, Pennsylvania 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York, Vice Chair 

DANIEL WEBSTER, Florida 

THOMAS MASSIE, Kentucky 

ROGER WILLIAMS, Texas 

TREY RADEL, Florida 

SCOTT PERRY, Pennsylvania 

BILL SHUSTER, Pennsylvania (Ex Officio) 

CORRINE BROWN, Florida 

DANIEL LIPINSKI, Illinois 

JERROLD NADLER, New York 

ELIJAH E. CUMMINGS, Maryland 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

TIMOTHY J. WALZ, Minnesota 

ALBIO SIRES, New Jersey 

ELIZABETH H. ESTY, Connecticut 

PETER A. DEFAZIO, Oregon 

MICHAEL E. CAPUANO, Massachusetts 

STEVE COHEN, Tennessee 

DINA TITUS, Nevada 

NICK J. RAHALL, II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

Summary of Subject Matter and addendum ......................................................... iv 

TESTIMONY 

Hon. Joseph C. Szabo, Administrator, Federal Railroad Administration ........... 6 

Hon. Joseph H. Boardman, President and Chief Executive Officer, Amtrak ..... 6 

PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS 

Hon. Steve Cohen, of Tennessee ............................................................................. 50 

PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE 

RECORD SUBMITTED BY WITNESSES 

Hon. Joseph C. Szabo: 

Prepared statement .......................................................................................... 51 

Answers to questions from the following Representatives: 

Hon. Jeff Denham, of California ..................................................................... 66 

Hon. Lou Barletta, of Pennsylvania ................................................................ 76 

Hon. Corrine Brown, of Florida ....................................................................... 77 

Hon. Joseph H. Boardman: 

Prepared statement .......................................................................................... 81 

Answers to questions from the following Representatives: 

Hon. Jeff Denham, of California ..................................................................... 92 

Hon. Corrine Brown, of Florida ....................................................................... 96 

SUBMISSIONS FOR THE RECORD 

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

five slides .............................................................................................. 9, 11, 13, 15, 17 

Hon. Jeff Denham, a Representative in Congress from the State of California, 

submission of the following items for the record: ..............................................

Slide entitled, ‘‘PRIIA’s Impact on Amtrak’s Lines of Business: Performance Since 2010’’ ........................................................................................... 31 

Metropolitan Policy Program at the Brookings Institution, ‘‘A New Alignment: Strengthening America’s Commitment to Passenger Rail,’’ (2013) 119 

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(1) 

AMTRAK’S FISCAL YEAR 2014 BUDGET: THE 

STARTING POINT FOR REAUTHORIZATION 

THURSDAY, APRIL 11, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON RAILROADS, PIPELINES, 

AND HAZARDOUS MATERIALS, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:08 a.m. in Room 

2167, Rayburn House Office Building, Hon. Jeff Denham (Chairman of the subcommittee) presiding. 

Mr. DENHAM. The subcommittee will come to order. First, let me 

welcome our distinguished witnesses and thank them for testifying 

today. 

As you know, Chairman Shuster and I are committed to rail reauthorization this year, and hopefully this hearing will continue 

that bipartisan effort. The starting point for this reauthorization is 

Amtrak and the Administration’s respective budget requests. This 

is our starting point, because the primary policy questions answered in this or any other reauthorization, or how much Federal 

funding do we allocate, and what should that funding be used for. 

Today we will hear from both Amtrak and the Administration regarding Amtrak’s fiscal needs. As you may know, the Passenger 

Rail Investment and Improvement Act of 2008, PRIIA, authorized 

funding levels for Amtrak over 5 years for operating grants and 

capital grants. 

On the operating side, PRIIA authorized, Amtrak requested, and 

Congress has appropriated amounts higher than Amtrak’s actual 

needs. In fact, since PRIIA was enacted, Amtrak received $2.6 billion in operating appropriations, but actually only had $2.1 billion 

in losses. While Amtrak did use this money on important projects 

like purchasing a new set of long-distance train sets, imagine if 

Amtrak could have leveraged this half billion dollars for its infrastructure needs on the Northeast Corridor. I look forward to exploring this matter with our witnesses. 

With regard to capital grants, the PRIIA reauthorization levels 

were higher than what has been consistently appropriated. In fiscal 

year 2014, Amtrak is requesting $2.27 billion for its capital program, about $1.4 billion more than the 2013 amount. This additional funding includes the procurement of new rolling stock, initiation projects related to the new Hudson River tunnels in New 

York, and continued station compliance with the Americans with 

Disability Act. 

2 

In addition to hearing about Amtrak’s fiscal needs, both entities 

will also address the reorganization of Amtrak into business lines. 

Amtrak’s decision to split out Northeast Corridor, State-supported 

routes, and long-distance routes will create more transparency and 

show stakeholders where Federal funding is needed. 

There is growing agreement between Amtrak, the Administration, and others like the Brookings Institute, that reorganization is 

a big first step toward running Amtrak more like a business, which 

would allow proper infrastructure development. The current operating structure does not allow proper infrastructure development 

because the profits of the Northeast Corridor go to subsidize losses 

in other routes, especially the long distance routes. We must find 

a better way to do this, and we are open to many new ideas. 

Before I close, I ask unanimous consent that the Brookings Institute report entitled, ‘‘A New Alignment: Strengthening America’s 

Commitment to Passenger Rail’’ be included in the record. 

[No response.] 

Mr. DENHAM. Without objection, so ordered. 

[The Brookings Institute report entitled, ‘‘A New Alignment: 

Strengthening America’s Commitment to Passenger Rail’’ can be 

found on page 119.] 

Mr. DENHAM. Again, I want to thank the witnesses for being 

here today. I would now like to recognize Mrs. Napolitano from 

California for 5 minutes to make any opening statement she may 

have. 

Mrs. NAPOLITANO. Thank you, Mr. Chairman. And I too want to 

thank you for holding the hearing and kicking off our work to reauthorize Amtrak. 

I do believe the best way to approach Amtrak’s future is to fully 

understand its past. In 1971, passenger rail service was in steep 

decline. And the creation of the Interstate Highway System and development of jet aircraft taken its toll on the private railroads. 

Losses reached an all-time high of about $750 million annually, or 

about $4 billion in today’s dollars. To prevent elimination of passenger rail service in the United States, Congress did step in and 

created Amtrak, stating that a modern, efficient, intercity rail passenger service is a necessary part of a balanced transportation system, and that the public convenience and necessity requires a continuance in improvement of such service. 

At the time, Congress recommended moving away from treating 

passenger’s rail as a separate entity. Congress wanted to focus on 

development of a coordinated approach to transportation that provided balance amongst all modes. Legislation to achieve that balance was, unfortunately, abandoned, as Congress feared that delaying the action on passenger rail legislation would lead to the demise of the entire rail system. 

As a result, when Amtrak was born, it was a mess. Just 1,500 

employees were responsible for safety operation of 26.3 train miles. 

That infrastructure, facilities, and equipment that Amtrak inherited from railroads were in a serious state of disrepair. In one particular glaring example, Amtrak was not able to replace a 100-yearold bridge it inherited until enactment of the American Recovery 

Reinvestment Act in 2009, despite the service disruption the aging 

bridge had created for years. 

3 

Similar challenges posed by aging infrastructure today seriously 

hinder Amtrak’s ability to further improve service and increase 

revenues. Make no mistake about it: That is our fault. We never, 

ever gave Amtrak the resource it needs to accomplish a state of 

good repair, much less maintain its current system. In part, these 

challenges stem from the fact that, before Amtrak was created, the 

Federal Government has created—treated railroads, both freight 

and passenger, differently than other modes of transportation. We 

have a different planning process for highways, transits, and rail, 

which makes no sense. We have different funding streams. 

From 1947 to 1970, when Amtrak was created, the Federal Government spent $11.3 billion on aviation. In the same period we provided $52.4 billion for the development of Interstate Highway System. While most of the money came from user fees, at least $8 billion were from the General Fund. Today the annual Federal spending on highway construction exceeds $42 billion. We have not spent 

that much on improved rail services in 43 years. 

We often gloss over the fact that this funding does not all come 

from user fees. But in 2008 a total of $46.3 billion in General 

Funds has been transferred to the highway account of the Highway 

Trust Fund to keep the trust fund solvent. And an additional $6 

billion has been transferred to the mass transit account. 

Despite the considerable constraints that Amtrak is forced to operate under, our national rail carrier continues to set new ridership 

and revenue records, and demand for services is ever-increasing. 

Just last month, more Americans rode the rails than any other 

month in Amtrak’s history. And Amtrak is on track to set yet another yearly ridership record. 

So, Mr. Chairman, we have an opportunity here to help Amtrak 

build on this considerable success. So let’s go in a new direction, 

the one that—as envisioned by the creators of Amtrak back in 

1970. And let’s create a balanced surface transportation system. 

We have deficient roads, deficient bridges, and significant needs in 

transit and passenger and rail service—freight rail. That calls for 

unified short and long-term planning and dedicated financing, 

which our President proposed creating his fiscal year 2014 budget 

request, a Transportation Trust Fund to help finance our freight 

and rail passenger needs. 

I look forward to exploring this a bit more with the witness, and 

I thank Ms. Corrine Brown for asking that I come and sit in, because I wanted to learn more about Amtrak. Thank you, Mr. Chair. 

Mr. DENHAM. Thank you. I now call on the full committee chairman, Mr. Shuster. 

Mr. SHUSTER. Thank you, Mr. Chairman, and I appreciate you 

holding this hearing today. I want to welcome Administrator Szabo 

and Mr. Boardman. It is good to have you here today. And if we 

are going to enact meaningful reauthorization, we need both of 

your input as we move forward. So again, this is a good place to 

start that conversation. 

As I have previously noted before, the rail reauthorization is one 

of the committee’s top priorities, and we have got a lot of hard 

work ahead of us to develop, draft, and pass a rail reauthorization. 

And a major part of that will be Amtrak as we move forward. 

4 

From the beginning of our history in this country, from the canals to the transcontinental railroad, to the Interstate Highway 

System, infrastructure plays an extremely important part in the 

health of the economy of the United States. And now, more than 

ever, as the Nation continues to grow, as we go from 300 million 

to 400 million people, and you look—that population does not all 

move into the South and to the West, the Northeast Corridor and 

these other densely populated corridors are going to have to look 

at alternative ways to move people. And Amtrak needs to be part 

of that equation. 

Our role in the Transportation Committee is to make sure that 

we are investing money wisely in infrastructure to make sure that 

we are going to maintain competitiveness, globally. It is absolutely 

critical, if you are talking about jobs, economic development, trade. 

The fourth thing that you roll off your tongue is transportation. 

The system needs to be in place, again, to move people and to move 

goods. 

Amtrak in the Northeast Corridor is one of our most valuable assets. And we need to make sure that the investment that Amtrak 

is making is geared towards or focused on those important assets 

that we have. And, as I said, the Northeast Corridor is one of those 

that we need to focus like a laser on. 

We may disagree on the funding levels, but I am very encouraged 

that both the Administration and Amtrak believe that there needs 

to be reform and improvement as to how Amtrak operates. For the 

last 40 years, I don’t believe the current structure of Amtrak has 

allowed it to run like an effective business. I know that Mr. 

Boardman has made some improvements at Amtrak, but I think 

there is a lot more we can do there. And again, the focus being on 

the Northeast Corridor, which has been underinvested over the last 

40 years. 

But I believe this is a great starting point. All of us new Members and veteran Members need to take a real hard look at Amtrak 

and improving it as we work towards a reauthorization bill. So 

again, I thank the chairman for not only holding the hearing, but 

for diving into the policy details. He has been doing a great job, 

and we really appreciate that. So again, I yield back. 

Mr. DENHAM. I now recognize the former committee chair for any 

brief comments he may have. Mr. Mica. 

Mr. MICA. Well, thank you, Mr. Chairman, our subcommittee 

chair. I want to thank you for your leadership on this hearing and 

this issue. And, Mr. Chairman, thank you. Mrs. Napolitano, Ms. 

Brown, others who are working towards reauthorization. I think 

the last time we had a hearing we were reminded it took 11 years 

to do passenger rail reauthorization with bipartisan cooperation 

working with Mr. Oberstar and others, people of goodwill, we 

passed that authorization which—the PRIIA—will need to be replaced. And we should do it as efficiently as possible, particularly 

in a time of taxpayer losses. 

You will probably hear some good news from Amtrak, and Mr. 

Boardman has done his best. The problem always isn’t Mr. 

Boardman or Amtrak. The problem is sometimes Congress, in that 

it sets up the parameters by which Amtrak operates. That is why 

this reauthorization is so important. 

5 

Some of the subsidies per passenger ticket have come down a bit. 

There is still $45.45 for last year, every single passenger ticket was 

underwritten. That is the operating and capital subsidy for Amtrak 

passengers. Some of the routes continue to be huge losses. We cited 

last time you could pick someone up in a limo in New Orleans, take 

them to the airport, fly them to Los Angeles, and have them delivered to their residence or location in the Metropolitan Los Angeles 

area less than you could for Amtrak, again, with the subsidization 

loss that we are now paying. 

The largest carrier in the United States is by surface bus, private 

operators, all who make a profit or go out of business. Many of our 

routes could be changed out. 

In a week in which we memorialize and recognize some of the 

efforts of Margaret Thatcher, you have to look at her example of 

privatization. Now, of course, back in 1971 we set up this Amtrak 

Corporation. It took from 1982, when she began privatization in 

the UK, to past her term with John Major instituting competition 

in rail in the UK. They have had 20 years of experience, some of 

it good, some of it not so good. 

I intend to move forward with trying to open all passenger rail 

service in the United States currently operated by Amtrak to private competition. Nothing healthier than private competition. In 

fact, European Union—and I just got back from riding one of the 

trains there—improved State service because now in Italy they 

have private-sector competition. And I am hoping in this reauthorization we can lay the groundwork for better service for eliminating 

some of the routes that lose incredible amounts of money. 

When we are talking about closing down essential Government 

services, and we are underwriting still—and I am anxious to hear 

the projections for food service loss—where is my McDonald’s here? 

Usually I have my McDonald’s about this time. But we have—we 

grew from $83 to $85 million in losses on food service. And that, 

in a time of incredible stress on our economy, losses, increasing 

debt, we have got to address. 

So, you can only put so much—there is my McDonald’s here—of 

course I always use this as an illustration. Every cup sold on Amtrak, and even with the news of more passengers, it is more underwriting every time they buy a cup of coffee. While McDonald’s can 

sell that for a dollar and make money, and some stores more, we 

lose $1.60 for every dollar spent on food service in Amtrak. But this 

wasteful loss has to come to an end. You can only put so much lipstick on a black hole financial operation, and you still have great 

losses to the taxpayer. 

So, I am interested in the bottom line and an open competition, 

and improving service and working with Amtrak and the committee to make certain that we go down a path of competition, a 

path of saving the taxpayer money, and providing good passenger 

rail service nationally for all the American people. With that, I 

yield back. 

Mr. DENHAM. I would like to again welcome our witnesses here 

today. Our first panel will include the Honorable Joseph Szabo, Administrator of the Federal Railroad Administration and the Honorable Joseph Boardman, president and CEO of Amtrak. I ask unaniVerDate Aug 31 2005 14:39 Jun 20, 2013 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\4-11-1~1\80348.TXT JEAN
6 

mous consent that our witnesses’ full statements be included in the 

record. 

[No response.] 

Mr. DENHAM. Without objection, so ordered. Since your written 

testimony has been made part of the record, the subcommittee 

would request that you limit your oral testimony to 5 minutes. 

Mr. Szabo, you may proceed. 

TESTIMONY OF HON. JOSEPH C. SZABO, ADMINISTRATOR, 

FEDERAL RAILROAD ADMINISTRATION; AND HON. JOSEPH 

H. BOARDMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AMTRAK 

Mr. SZABO. Well, thank you, Mr. Chairman, Chairman Shuster, 

and to the members of the committee. Appreciate the opportunity 

to appear before you today to discuss rail policy reauthorization. 

Our budget request released yesterday reflects our reauthorization priorities, and also reflects an emerging consensus that rail is 

the mode of opportunity. By 2050 America’s transportation network 

will need to move 100 million additional people and 4 billion more 

tons of freight per year. And it will need to do it safely, reliably, 

and efficiently. 

Today our airports and highways are stretched close to their limits, hampered by congestion that costs our economy more than 

$120 billion per year. And these challenges underscore the need to 

invest in more underutilized transportation alternatives, such as 

rail, which can be the most cost-effective, least oil-reliant, most environmentally-friendly, and the safest mode to move both people 

and freight. 

Congress recognized this need in 2008 when it passed, with bipartisan support, 2 pieces of legislation: the Rail Safety Improvement Act, and the Passenger Rail Investment and Improvement 

Act. Both have provided the policy framework for our safety and 

development initiatives now helping to fuel the resurgence of 

American rail. Since these two landmark acts were passed, railroad 

accidents have fallen to record lows, while Amtrak’s ridership and 

on-time performance have risen to record highs. 

Intermodal freight traffic surge last year to near-record levels. 

And the freight rail industry continues to reinvest in capacity expansion like at no other time since the Gilded Age. Passenger rail 

too is experiencing a renaissance. Amtrak has set ridership records 

9 out of the last 10 years. And since 1997 its ridership has grown 

55 percent, faster than any other major travel mode, and at a rate 

three times faster than the American population growth during 

that same period. And while all of this occurs, historic levels of 

public and private investment are laying a foundation for a higher 

performing rail system that is safer, more reliable, and more efficient. 

But PRIIA and RSIA and now set to expire at the end of the fiscal year. And as much as we have accomplished, much more needs 

to be done to rebalance our Nation’s transportation network. 

Our budget lays out a comprehensive blueprint for moving forward. Its fundamental goal is to take a more coordinated approach 

to enhancing the Nation’s rail system, a holistic, integrated strategy that addresses rail safety issues, passenger and freight service 

7 

improvements, and planning. Our new approach builds on the core 

principles of PRIIA and RSIA, and it better reflects our on-theground experiences, including the complex reality of a rail system 

which mainly runs on privately owned track and carries a mix of 

passenger and freight trains. 

Safety remains our top priority. RSIA has enabled us to focus on 

risk-reduction program regulations in some of the most challenging 

areas of safety, from hazardous materials to track, highway rail 

grade crossings, and rail trespassing. Fully implementing these 

regulations will drive rail accidents to new record lows. 

But continued capital investment that upgrade or eliminate the 

need for public highway rail grade crossings, advancing the creation of sealed corridors, is another huge win for safety. We envision the domestic rail industry again being world-leading, an industry that exploits intellectual capital—or exports, I should say intellectual capital—and rail products all over the world. And will continue to manage our investments through a transparent process. 

And, with your support, we can safely position our rail network for 

its increasingly vital role. 

Much of the rail infrastructure we rely on today was built by 

past generations of Americans who acted boldly on our behalf. Now 

the time has come for our generation, for the sake of our children 

and grandchildren, to recapture that visionary spirit. A sustained, 

long-term funding strategy similar to those in place for highways, 

transit, and aviation will make that possible. And it is appropriate, 

given the enormous pent-up demand for rail projects. For the $10 billion this Administration invested in high-speed 

and higher performing intercity passenger rail, we have received 

applications from 39 States, the District of Columbia, and Amtrak 

requesting 7 times that amount. Our reauthorization priorities will 

enable us to continue answering this strong demand, and it will enable rail to continue moving America’s economy forward. 

So, I look forward to discussing our proposal and working with 

you, Mr. Chair and Mr. Chair, and the members of these committees, to meet our mutual goals this year. Thank you very much. 

Mr. DENHAM. Thank you, Mr. Szabo. 

Mr. Boardman, you may proceed. 

Mr. BOARDMAN. Thank you, Mr. Chairman and all. One of the 

issues we have heard a lot about this year is cash management. 

Understanding how we do this is more important than understanding our budget request. Because we are a business, rather 

than an agency, our budgets are much more fluid. We generate revenues and our need for operating funding fluctuates, depending on 

our revenue performance. 

Over the last couple of years that performance has been very 

good, but it hasn’t changed Amtrak’s basic situation. We are a capital-intensive business that does not generate sufficient revenues to 

cover our operating costs, let alone fund capital investment. We are 

a heavily seasonal business, one that is frequently affected by 

weather and other events. And our real fiscal challenge is not so 

much budgeting as it is cash management. 

You will see that here, on the first slide. Over the last 3 fiscal 

years we have used capital grant money to fund operating expenditures on four occasions, none longer than 9 days’ duration and none 

8 

more than 2 percent of the total value of our annual operating expenses. All of our capital funds were eventually used for activities 

in our approved capital plan. 

We have actually been recognized by Treasury & Risk magazine 

with their Alexander Hamilton Award for the efficiency of our cash 

management, since it minimizes the need for duplicative work, provides us with a much-needed flexibility, and saves on unnecessary 

expense. 

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The next slide will explain why this is necessary. The seasonality 

of our revenues is exacerbated by the periodic nature of our operating support payments and the challenges that come with an unpredictable budget cycle. I would add that those challenges aren’t 

just associated with the Federal budget cycle, although that is challenging enough. Each of the 15 States that partner with us to offer 

service has its own budget cycle, and those cycles can affect when 

States pay the bills they incur from operation of our State services. There is an aspect of due caution involved in budgeting for a $4 

billion company that has little liquidity as Amtrak enjoys. We typically have about $200 million in cash reserves, and there are points 

where that reserve dropped below $100 million, which is a major 

concern for us. Let me put it in real-life perspective. If you made 

$400 a week, that means you would carry $20 around in your pocket. We have had to deal with the challenge that comes from having 

a continuing resolution every year since 1998. 

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This next slide will give you an idea of some of the challenges 

we face in building an operating budget for the coming fiscal year. 

We typically budget with the expectation that there will be certain 

levels of disruption. In part, we would rather ask for the money upfront than come back to Congress in the midst of a major event 

with a sudden request for more funding. As you can see from the 

chart, we are running a degree of calculated risk in 2014. Our 

budget includes a projected total of $85 million from the States 

generated by the Section 209 process that was mentioned earlier. 

But the process of concluding and funding the new contracts is 

still, for the most part, ahead of us. And if it doesn’t work out, services will need to be cut. It will trigger shut-down costs for Amtrak, 

with a change in revenue and generation cost structure. 

While we do need the flexibility to use capital money to cover operating expense on a temporary basis, there is another side to the 

coin. When the financial situation is favorable, Amtrak does use 

the operating money to meet capital and other expenses. For example, we have used operating funds to ensure that Amtrak’s retirement fund is currently fully funded. 

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In the next slide we will explain another one of the investments 

we have made. It will show a reduction in overall debt. And you 

can see that during that glide path to profitability back in 1999 to 

2002, it was funded by increasing debt. During this period, the 

company was starved for cash. New York Penn Station was mortgaged, 30-year-old cars were sold and leased back to the company, 

all to generate money Amtrak needed to keep things moving. We 

have made a definite decision to change that. 

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Be assured there are a lot of checks and balances in place to ensure that no abuses occur. And if you look at the next slide, you 

will see some of the agencies, firms, and bodies that oversee Amtrak’s financial transactions. We report our cash balances to the 

FRA every day. And we also submit monthly reports so they are 

very aware of both our immediate balance and our longer term outlook. We are also audited on an annual basis, just as any publicly 

traded company would be. It would be hard to think of an entity, 

public or private, that is as thoroughly subject to scrutiny or oversight as Amtrak. Some even say we have more studies on us than 

the Kennedy assassination. 

17 


Insert offset folio 13 here 80348.013
18 

Over the last decade we have grown our ridership, cut our debt, 

reliance on Federal support, and we brought new service to States 

and regions that have fewer and fewer choices. We are doing the 

right things and we are doing things right. Congress should be 

proud of the job we have done. 

But we faced very real capital challenges that have to be addressed. If we do not invest, we would expect to see not lower operating costs, but higher ones. Not higher speeds, but lower ones. Not 

better on-time performance, but worse. Our fleet and Northeast 

Corridor infrastructure are old and getting more fragile than they 

have ever been. Each day the investment need grows. This reauthorization provides an opportunity to make a decision about what 

kind of railroad we want and what kind of business we are going 

to run. 

For the benefit of our customers, our employees, and our Nation, 

I ask you to address the needs for investment that provide for the 

safe, secure transportation of our customers at competitive trip 

times, with greater capacity to support our economy, and with a 

national intercity mobility and connectivity in mind for Amtrak, 

America’s railroad. Thank you. 

Mr. DENHAM. Thank you, Mr. Boardman. Mr. Szabo, I wanted to 

start first by discussing the budget that was recently presented. 

This year Amtrak received $1.5 billion in Federal funds, but the 

Administration is now requesting $2.7 billion for Amtrak in 2014, 

and an average of $2.6 billion per year for the next 5 years. You are seeking an additional $1.2 billion for Amtrak. What is 

the need for the additional funds? Where do you expect the expenditures to take place? And what is the revenue system you are looking to generate or offset that? 

Mr. SZABO. It is really a matter of taking a look at what does 

it take to do this right and to make sure that rail, whether we are 

talking passenger or freight rail, plays the role that it is going to 

have to play in meeting our growing transportation needs. 

And so, it is a matter of drilling down in each of the distinct 

business lines which we propose separating out and fully understanding what are the capital needs to bring that railroad to a 

state of good repair, and ensure kind of three tenants that I come 

back to: safety, efficiency, and reliability. And making sure that we 

are making the capital investments so infrastructure and equipment is fully refreshed, and then the capitalization takes place on 

an ongoing basis for continuing renewal of the infrastructure in the 

fleet, again, to make sure that we operate safely, efficiently, and 

reliably. 

So, we drill down in each of the business lines—as I said, the 

Northeast Corridor—and take a look at the substantial backlog of 

state-of-good-repair needs for the corridor to bring it to the state 

that it should be. 

And the other business line with the States, of course that responsibility is now transferred to the States under PRIIA Section 

209, both the operating as well as the renewal of capital. And so 

we are proposing that transitional assistance for the States that 

phases out over the 5-year period. 

And then again, for the long-distance network, which is kind of 

that third critical business line, understanding, again, what it is 

19 

going to take to do it right, to make sure it is safe, efficient, and 

reliable. 

And then the fourth category in the business lines would be 

those national assets. To a great extent, one-time improvements 

that need to be made, such as bringing all the stations into ADA 

compliance, positive train control investments, as well as what 

would—the elimination of legacy debt—and again, those are the 

three things that would fade away—while also providing for the 

overhead items such as the national reservation system, security, 

and IT systems. 

Mr. DENHAM. And to pay for it? 

Mr. SZABO. President proposes that we pay for this—take roughly—of the $600 billion savings from the drawdown of the overseas 

conflicts, $300 billion of that would go directly to deficit reduction, 

$214 billion of it would go to the Transportation Trust Fund, and 

out of there we would take the $40 billion that we need for a strong 

5-year rail reauthorization program. 

Mr. DENHAM. Thank you. And on the capital investments, how 

much of the capital investments are you looking at for track, new 

track, or track upgrades versus new trains versus bridges and stations, positive train control—— 

Mr. SZABO. Yes. 

Mr. DENHAM [continuing]. How much of it is going to debt? 

Mr. SZABO. I can give you that drill-down for the record. We can 

provide that for the record. But essentially, what we have looked 

at, we have accumulatively, you know, taken a look at what all of 

those capital needs are. And so we can provide you a more detailed 

breakdown for the record. 

Mr. DENHAM. Thank you. Look forward to seeing that. The 2009 

transitional assistance. PRIIA has been in place for 5 years now. 

Obviously, we are very anxious to get a new PRIIA reauthorization. 

But back to the 2009 transition assistance, what States are requesting assistance right now? 

Mr. SZABO. Virtually all of them. I can provide for you the list 

that has come in. But there have been several individual States 

that have requested help, as well as broader—— 

Mr. DENHAM. Do the States not have it in their current budgets? 

Mr. SZABO. It is a challenge for them. It is a serious challenge—— 

Mr. DENHAM. It is a challenge for the entire Nation. We have increased our debt by a huge amount. 

Mr. SZABO. Yes. 

Mr. DENHAM. But the States, under 209, have each put it into 

their current budgets. So my question to you is, if they have got 

it in their current budgets, why would, after a 5-year transitional 

period, after 5 years of PRIIA in place, why would we now reauthorize PRIIA with an additional transition assistance? I am sure 

they would like the additional revenue. I am sure they would like 

to have a number of different revenues from the Federal Government. But this was an agreement 5 years ago. Why would we extend new monies for States that are already budgeting in their current budgets? 

Mr. SZABO. Chairman, at this time there are, in fact, States that 

have not budgeted the appropriate dollars to maintain their curVerDate Aug 31 2005 14:39 Jun 20, 2013 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\4-11-1~1\80348.TXT JEAN
20 

rent level of services. And so there are States that—where service 

is at risk if some form of funding is not found. 

Mr. DENHAM. We would like to see a list of those. 

Mr. SZABO. Very good. We can provide that. 

Mr. DENHAM. Mrs. Napolitano. 

Mrs. NAPOLITANO. Thank you, Mr. Chairman. And on the same 

line of questioning is, what would happen if they do not pay for 

some of those services? What would happen to the rail line? 

Mr. SZABO. The service goes away. You know, in this—under 

PRIIA Section 209, the responsibility for that corridor service becomes the State’s responsibility. And so, if the State cannot pay, 

you know, for their service, their service would have to disappear. 

Mrs. NAPOLITANO. And is this something they are aware of, and 

are—have you notified them? Is this part of the incoming budget? 

Mr. BOARDMAN. It is my responsibility to notify them, and that 

will happen next week. 

Mrs. NAPOLITANO. It will happen? 

Mr. BOARDMAN. Yes. 

Mrs. NAPOLITANO. But would you mind sending us a notice so I 

can follow it up in my own area? 

Mr. BOARDMAN. Certainly. 

Mrs. NAPOLITANO. Thank you. Both of you, California has three 

of the top five busiest Amtrak corridors, and they are all State-supported service routes: the Pacific Surfliner, the Capital Corridor, 

and the San Joaquin. What does the budget, the Administration’s 

budget for these services, how will the Administration, Amtrak 

make sure that the State-supported routes continue to pay their— 

what are you going to do? 

What is it that you are going to convince the States to pay their 

fair share? Because some of them apparently do not. And how will 

they be forced to do that fair share? Will you diminish the amount 

of service, or will you just totally say, ‘‘Sorry, you are not paying 

your fair share’’? 

Mr. SZABO. Yes, the fair share allocations actually were addressed under PRIIA. Under PRIIA Section 209, Amtrak, with the 

assistance of FRA and all of the States, was required to come up 

with a methodology, an agreed-to methodology, that would fairly allocate the cost and expense among the States. And in a consistent 

basis. So this way, every State would pay their fair share, based 

on the level of service that they chose to operate. 

And so, ensuring the implementation of 209 is the, you know, 

surest way to ensure that consistency. It is one of the reasons why 

our program proposes the transitional assistance to the States, to 

make sure that they have the ability to absorb this burden. 

You know, and then, of course, through the second part of our 

reauthorization proposal, the Rail Service Improvement Program, 

States would have the opportunity then to apply for the grants on 

a competitive basis for those service improvements that they would 

like to make. 

Mrs. NAPOLITANO. Thank you. Then another question is the 

Highway Trust Fund is exclusively financed by highway users. 

This is what our opponents have continued to argue, that this is 

something they have a problem with. But that is no longer the 

case. But the—Congress appropriate a billion revenues from the 

21 

Highway Trust Fund. How can for-profit corporation effectively 

plan for the future when it does not know how it will be funded 

on a year-to-year basis? And does the current way of Amtrak financed end up costing the taxpayer more money? And what suggestions do you have to move forward with respect to this funding? 

Mr. SZABO. I will let Joe, in a minute, comment on the effects 

that it has on his organization in trying to plan, you know, in an 

environment where there is no consistency. But one of the most important reasons why we are proposing a 5-year reauthorization, 

and why we are proposing that a rail fund be created inside a 

broader Transportation Trust Fund, is to ensure that we can put 

rail on parity with other modes like highways and aviation, and actually allow Amtrak and allow States to do good, long-range planning. 

You know, the surest way to ensure, you know, success is to have 

predictability and to be able to plan for it. And so that is part of 

the reason why we believe it is so important that there be a dedicated trust fund. 

Mrs. NAPOLITANO. And we agree with you. Mr. Boardman, the 

Passenger Rail Investment Improvement Act authorized the Secretary to finance the early buy-out options in your leases to reduce 

the overall debt. How much did you save, and thus save the taxpayer, the Federal Government? How much would extending that 

authorization save Amtrak and save the taxpayer money? 

Mr. BOARDMAN. We think right now, for—we have got for 2014 

to 2019, there is a cost to do this of a little over a half-a-billion dollars, $572 million, with a net savings in the cost of $393 million. 

So, going forward, we see a real potential here, even just in fiscal 

year 2014. What we are requesting right now is to do a leveraged 

buy-out of nine leases, costing $197 million. And that savings 

would be $107 million. 

Mrs. NAPOLITANO. Thank you very much, Mr. Chair. I look forward to a second round. 

Mr. DENHAM. Mr. Shuster. 

Mr. SHUSTER. Thank you, Mr. Chairman. Mr. Szabo, I want to 

start with you. The 209 funding that you are providing, it seems 

to me the surest way for the States not to come up with the money 

is for the Federal Government to say, ‘‘Oh, we are going to have 

this fund out here for you, so you are not going to have to come 

up with it.’’ What would be the incentive for a State to come up 

with those dollars if the Federal Government is saying, ‘‘Don’t 

worry about it, we are going to provide you that funding’’? 

I think that is the wrong approach. And in Pennsylvania—just 

so everybody knows, when Pennsylvania decided to keep over the 

Pennsylvanian—the Governor made that decision—the line that 

goes right through my district, and that was a decision by the 

State, and I think that that came up, they worked with Mr. 

Boardman to figure out the funding levels, and so they came up 

with it. 

Again, far too often in the Federal Government—and we are 

going through this right now with sequestration—a 2-percent cut 

and the world is coming to an end. We have to make sure that Federal Government as well as State governments, everybody is rolling 

22 

up their sleeves, figuring out in these tough economic times, these 

tough budgetary times, how they are going to make ends meet. 

So, again, explain to me why we think that is going to be helpful, 

and not hurtful, for these States having to make the reforms the 

need. 

Mr. SZABO. Yes, your comments are fair, but let me say this. I 

think the key here—two things. The first one is I want you to understand we are not talking about funding transitional assistance 

for their entire financial burden. We are talking about—only talking about the delta, the increase in the burden that States are 

going to be facing. 

Secondly, instead of this dropping on them all at once like an 

anvil, it comes back to what I said before of the ability to predictably plan. And so, a 5-year incremental phase-down allows them to 

do that, to make sure that they can get their budgetary constraints 

in order. They are going to assume the entire burden, but allows 

it just to be phased in in a little more fair or rational approach, 

rather than slugging them right in the face all at once. 

Mr. SHUSTER. Well, again, they have known for some time now 

that this was coming. And so, again, I think States need to—if they 

are getting the service from Amtrak, step up to the plate. And 

again, I am just concerned this is going to just allow States to punt 

on this one and just wait until the Federal Government provides 

them with the funding. 

Talking about certainty, PTC. I understand that it is going to 

be—very difficult for us to hit that timeline. So is the Administration looking at moving that date from 2015 down the road to allow 

for these folks to be able to purchase or develop the PTC? 

Mr. SZABO. Only Congress can change the date. 

Mr. SHUSTER. Well, I—— 

Mr. SZABO. You know, our responsibility is, in essence, to execute 

the requirements you give us. And as of right now, the requirement 

that we are obligated to execute is that deadline of 2015. 

Now, we did issue our report to Congress last year that does 

itemize the list of challenges that the different rail carriers are facing. And I do believe that full implementation across the Nation is 

going to be very, very difficult, if not impossible to achieve by that 

2015 date. We can see partial implementation. 

And so, if you go back to our report, what we recommended is 

that Congress not in a carte blanche manner extend the date. But 

instead, give FRA the authority to grant extensions on an as-need 

basis, you know, based on a verified—you know, very verified and 

documented understanding of the challenges that a particular railroad might be facing. 

Mr. SHUSTER. So you are in agreement that 215 is probably not 

going to be met by a significant number. 

Mr. SZABO. Not fully implementation. Partial, yes. 

Mr. SHUSTER. And final question for you, the Administration is 

proposing $190 million in grant funding to support freight rail 

projects. Given that the freights are investing record numbers, why 

does the Administration, especially at this time when our budgets 

are as tight as they are, why are you proposing those freight 

rail—— 

23 

Mr. SZABO. A couple of reasons. First off, again, we want our reauthorization proposal to be viewed as one that is holistic. You 

know, understanding that this isn’t about passenger rail, you 

know, it has got to be about the rail industry. And it is all intertwined. 

There are certainly rail projects out there where there can be 

well-defined public benefits. And so we are talking about being able 

to invest in the value of those public benefits, not the private benefits. And I can give you some good examples, things like, in the 

past, the Heartland Corridor or Crescent Corridor, the intermodal 

operations that CSX and NS have invested in, projects like the Indiana Gateway, where, you know, there is just tremendous rail congestion that is affecting the movement of both freight and passenger trains in and out of Chicago through a very, you know, tight 

funnel there in Indiana, and has negative impacts upon the community. 

And so, there are public benefits in these investments. And we 

would only expect our dollars to go in to matching those public benefits. We also believe that as the role that freight and passenger 

rail grows, there will be additional negative impacts upon communities. 

And so, we believe that it is in the public interest to provide for 

community mitigation that eliminates some of those negative impacts on those communities and enhances safety: grade crossing 

improvements, underpasses, overpasses, things of that nature. 

Mr. SHUSTER. And there will be a process, we will be able to see 

some transparency on where those—— 

Mr. SZABO. Absolutely. We would talk about a competitive grant 

process, and one that would provide full and complete transparency. 

Mr. SHUSTER. I see my time has expired. Are we going to have 

a second round? 

Mr. DENHAM. Yes, we will have a second round. We will actually 

be showing some slides on the funding of the different routes. 

But I just want to clarify. In the budget we are continuing to 

have questions about this $300 million on the State corridors. That 

is a big disconnect from what we have up here. You are requesting 

$300 million, but State-supported routes is about $100 million, $85 

million of what we expect. So where is the other $200 million for 

State-supported routes? 

Mr. SZABO. I will get back to you on the record, Chairman, to 

make sure we have got a very clear breakdown for you. 

But this is, again, holistically understanding both the capital, as 

well as operating needs that the States are now going to have to 

incur. 

Mr. DENHAM. This is not my time, I just want to clarify, because 

that is a huge disconnect. 

Mr. Boardman, do you have any idea of the—— 

Mr. BOARDMAN. Yes, I believe that Joe is probably right. There 

is a capital component of what they are talking about. So it would 

be operating, because the 305 committee, as a part of PRIIA, began 

to buy equipment and locomotives for the States. 

Mr. DENHAM. OK, thank you. 

24 

Mrs. NAPOLITANO. Mr. Chairman, could I request that that be 

part of the record, to submit to us what the changes are, or what 

the distribution is? 

Mr. DENHAM. Yes. 

Mr. SZABO. Yes, definitely. 

Mr. DENHAM. Mr. Nadler. 

Mr. NADLER. Thank you, Mr. Chairman. Mr. Boardman, with re- spect to capital funding, the PRIIA authorized $6.7 billion in capital grants to Amtrak for fiscal years 2009 through 2013. The committee, this committee, worked closely with Amtrak on a bipartisan 

basis to determine appropriate authorization levels. 

Unfortunately, congressional appropriators provided Amtrak with $4.7 billion instead of $6.7 billion, a shortfall of $2 billion. 

What impact did this shortfall in the appropriations have on Amtrak? And does shortchanging Amtrak result in more of a backlog 

which ends up costing us more, eventually? 

Mr. BOARDMAN. Yes. I think, Congressman, that what happened 

always happens, and that is you do fall farther behind. Today, just 

in what we need to get done, we are in a backlog of about $5.8 billion. 

But I think, more importantly—and I entered it in the record 

last time, so I don’t need to do that again—is that it has been all 

documented now at $52 billion. The number used to be $40 billion. 

It is now—— 

Mr. NADLER. What is $52 billion? I am sorry. 

Mr. BOARDMAN. $52 billion to really bring the Northeast Corridor 

to a state of good repair. 

Mr. NADLER. So this $2 billion shortfall was for the Northeast 

Corridor? 

Mr. BOARDMAN. Yes. 

Mr. NADLER. And the—can you tell us what impact that has had 

so far, besides just a long-term piling up of more deferred capital? 

Mr. BOARDMAN. We have been able to maintain our services 

through maintenance. But, as I said in my testimony, the continuing underfunding of what needs to be done will result in potentially slower speeds and potentially worse on-time performance, 

and just generally degrading the Northeast Corridor. 

Mr. NADLER. Let me ask you one other question. I am more familiar with the New York City Transit Authority. The mean distance between failures today is about 170,000 miles. In 1976, after 

years of deferred maintenance such as Amtrak is undergoing now, 

that figure was 6,000 miles. We instituted a series of capital plans 

and got it from 6,000 miles to 170,000 miles. When it was 6,000 

miles you couldn’t go anywhere because the cars were breaking 

down all the time. 

If we keep underfunding the capital needs of Amtrak, you are 

going to have to do deferred maintenance. Can you see anything 

like that happening over a period of time? 

Mr. BOARDMAN. On equipment itself, we have a very strong program of rebuilding and maintaining reliability. But I do see a problem, especially on the infrastructure of the corridor, of maintaining 

it at the speeds that we really are operating now. 

Mr. NADLER. So we have to slow the speeds? 

Mr. BOARDMAN. Yes. 

25 

Mr. NADLER. Thank you. And also, the Disaster Relief Appropriations Act of 2013 provided Amtrak with $86 million in capital 

grants and $32 million in operating grants to address repairs related to Hurricane Sandy. I understand that Amtrak has decided 

not to accept the $86 million in capital grants because language 

contained in the Act would prohibit Amtrak from using any of its 

capital or debt service grants for operating expenses, including 

temporary transfer of such funds. 

Why is this language a problem for Amtrak? And what impact 

will not being able to accept the $86 million have on Amtrak? 

Mr. BOARDMAN. I think I tried to address that in slide 2 of my 

testimony. Where Amtrak really has been was in a situation where 

it had regularly—at least in four times in the last couple of years— 

used the capital funding to support the liquidity it needed to operate the railroad. There was a clause in the Sandy Bill that said we 

couldn’t do that. So—— 

Mr. NADLER. Did that clause apply only to the $86 million, or to 

all capital funds? 

Mr. BOARDMAN. Well, we saw it in the future as being all capital 

funds. But it did apply to the $86 million specifically, or that is the 

way we initially—— 

Mr. NADLER. So you didn’t accept the $86 million because you 

were upset with the precedent that might inhibit your future 

use—— 

Mr. BOARDMAN. We actually didn’t—we actually used capital 

funds for 2 days after this bill was signed. So we weren’t really eligible for the $86 million at that point in time. 

Mr. NADLER. Because you used it for operating for 2 days. 

Mr. BOARDMAN. Because we dipped into the capital side. So we 

need a legislative fix in order for us to access the $86 million. 

Mr. NADLER. When this was being considered by Congress, you 

were aware of it? And did you oppose it, this provision that said 

you couldn’t use the capital for operating? 

Mr. BOARDMAN. I believe we had discussions about it and were 

not happy about it. I don’t know all the detail of that. 

Mr. NADLER. And Mr. Szabo, Administrator Szabo, does this language cause concern for FRA? 

Mr. SZABO. Well, it is certainly not prohibited by our grant. And 

understanding that Amtrak is a private corporation, it is actually 

somewhat a—the, you know, pooling of cash and floating of cash 

is a widely accepted practice in private industry. 

Mr. NADLER. So you—so this language for Amtrak causes you 

concern? 

Mr. SZABO. The language would cause us concern, yes, yes. We— 

you know, we believe that it is a practice that should not be prohibited, and that the $86 million is, you know, so vitally necessary for 

Amtrak. 

Mr. NADLER. Thank you. 

Mr. DENHAM. Thank you. Mr. Mica. 

Mr. MICA. Thank you. Again, we have made some progress in accounting and some progress in paying down debt and lessening 

some of the subsidies. But I am still concerned about the size of 

the losses. 

26 

Mr. Szabo or Mr. Boardman, can you tell me from last year what 

the loss was on food service? I go back to my McDonald’s illustration. 

Mr. BOARDMAN. I will provide a written response—— 

Mr. MICA. No, I want—no one has a clue as to how much we lost 

and—— 

Mr. BOARDMAN. No. 

Mr. MICA. Do you have a clue? 

Mr. SZABO. I prefer to be accurate—— 

Mr. MICA. Because you say you have got all these—— 

Mr. SZABO [continuing]. Congressman, so we will provide—— 

Mr. MICA. You said you got all these accounting awards and everything, and neither the FRA Administrator nor the Amtrak leader can tell us how much they lost in food service. 

Mr. BOARDMAN. Nobody would ever give me an accounting 

award, but they did give that to Amtrak. 

Mr. MICA. But it is a simple thing. We went from $83 million 

to—— 

Mr. BOARDMAN. I don’t have the answer, Congressman. 

Mr. MICA [continuing]. $85 million. Well, I would like that, because this cup of coffee, again, I can buy at McDonald’s, they can 

make a profit. If it cost $1 on Amtrak, it costs the taxpayers $1.60. 

And weren’t you subject to some sequestration requirements in 

Amtrak? 

Mr. SZABO. Yes. 

Mr. MICA. Were you, Mr. Boardman? 

Mr. BOARDMAN. Yes. Yes, we were, sir. 

Mr. MICA. What was it, 5 percent or something? 

Mr. BOARDMAN. I don’t really remember the total. 

Mr. MICA. Didn’t you look for areas where you could cut your 

losses? Isn’t this—$85 million—— 

Mr. BOARDMAN. Yes. 

Mr. MICA. A lot of our figures have been—we could close down 

food service on Amtrak and actually save taxpayers a huge amount 

of money. 

In fact, if you take the money that is coming in, which is—the 209 money will be about $85 million more, according to your chart, 

209, the—— 

Mr. BOARDMAN. That is the expectation, yes. 

Mr. MICA. Yes, yes. And we take the loss from food service. I 

mean we are in the $200 million range. 

Mr. Szabo, you came here—well, first of all, we looked at the dipping in to the—if you look at the charts that were provided, it’s 

kind of interesting, because Amtrak survives a lot on stealing capital for operating expenses, historically, at least with what you—— 

Mr. BOARDMAN. Well, it doesn’t really steal. You put it right back 

again. 

Mr. MICA. But—— 

Mr. BOARDMAN. If you look at, really, what was there, you were 

taking it out and you were putting it back—— 

Mr. MICA. Well, we are taking it from capital—— 

Mr. BOARDMAN [continuing]. To manage the cash. And that was 

what I was really trying to talk about. You had to have that cash 

management—— 

27 

Mr. MICA. And it is kind of interesting. If you see the FRA 

grants—now, some—not all the grants were subject to the restriction we put on some of the transfer of capital money. Is that correct, Mr. Szabo? 

Mr. SZABO. No. It is my understanding that the way the language is written, that it would prohibit the temporary float of 

any—— 

Mr. MICA. OK. 

Mr. SZABO [continuing]. Capital dollars for the purpose of—— 

Mr. MICA. Well, I see these FRA grants—and this is your 

chart—— 

Mr. BOARDMAN. Oh, no, it is our chart. It is not—— 

Mr. MICA. OK. Well, somebody gave me the chart. It is showing 

the influx of FRA grants—— 

Mr. BOARDMAN. Well, that is when the—when we would receive 

money from the FRA—— 

Mr. MICA. But that was going on—— 

Mr. BOARDMAN [continuing]. Which would be dependent on 

whether—— 

Mr. MICA. Yes. 

Mr. BOARDMAN [continuing]. Congress had passed the resolution. 

Mr. MICA. And then this chart shows the use of capital to cover 

operating expenses. That wasn’t just Superstorm Sandy, because 

we have March of 2011—— 

Mr. BOARDMAN. Oh, no. We do that on a regular basis. 

Mr. MICA. September of 2011 there wasn’t a superstorm. 

Mr. BOARDMAN. That is correct. 

Mr. MICA. March of 2012 there wasn’t a superstorm. 

Mr. BOARDMAN. That is correct. 

Mr. MICA. So it is sort of a pattern. 

Mr. BOARDMAN. Yes, it is. It is a pattern. We use it and do it 

on a regular basis. 

Mr. MICA. May need—you may need some operational reserves, 

and that would be prudent business practice—— 

Mr. BOARDMAN. It would cost us more money to do that than the 

way we are doing it now. 

Mr. MICA. Well, again, I look at some of the information provided 

and the calculations are a 4.5-percent increase in benefits and 

other costs. 

Mr. BOARDMAN. Those are labor contracts, yes. 

Mr. MICA. Well, shouldn’t they be subject to, again, some reductions, in either reducing number of employees or—— 

Mr. BOARDMAN. We actually have reduced the number of employees. But not on the operating side. We did not—we chose not to cut 

service, because that is where our customers need—— 

Mr. MICA. What about on the management side? 

Mr. BOARDMAN. It is on the management side that we have cut. 

Mr. MICA. OK. If you can provide the committee—I am interested—at a time when, again, we have got trillion-dollar deficits 

growing, we are—you can’t even get into the building here, one of 

the guards got me this morning, ‘‘Mr. Mica, we don’t have enough 

people to service getting folks to their representatives.’’ And we are 

paying a dollar—underwriting $1.60 for every dollar—— 

28 

Mr. BOARDMAN. Well, I don’t know that that is the case. That is 

the number that you testified to, but I don’t agree with that. 

Mr. MICA. Well, I don’t—and no one seems to know, even with 

the accounting awards, at how much our losses are on a major activity. How are we doing on our credit cards? Can you use a credit 

card for all transactions now? Are we a cashless operation on Amtrak? 

Mr. BOARDMAN. We are not entirely cashless. People can still use 

cash. 

Mr. MICA. Oh, no. Please don’t tell me that. I thought we—this 

is something we have asked for—— 

Mr. BOARDMAN. I think if you read a dollar bill it will tell you 

you can use it, but yes, we are still using—— 

Mr. MICA. Even with your mobile phone you can get a device now 

to charge things for people who do lawn work. And you can’t—we 

still do not have common efficiencies in Amtrak. Yield back the balance of my time. 

Mr. DENHAM. Thank you. Ms. Esty. 

Ms. ESTY. Thank you very much. And thank you to my colleague 

for allowing me to go and then return to a markup where we have 

votes very shortly. 

So, one just quick question, Mr. Boardman, as a frequent user of 

the Northeast Corridor—and I want to thank Mr. Nadler for asking 

a couple of the other questions that are of particular concern to us 

here. Section 212 of the Passenger Rail Investment and Improvement Act requires that the Northeast Corridor Infrastructure and 

Operations Advisory Commission—requires them to develop a formula for compensating Amtrak for commuter rail usage of the infrastructure facilities and services in the Northeast Corridor. Amtrak is then required to work with the Northeast Corridor States 

to implement a new agreement based on the formula. 

Can you tell us what the status is of Section 212, please? 

Mr. BOARDMAN. Yes, ma’am. We have had a regular working 

group going on at the commission, looking at how the methodology 

for providing those dollars would go forward. We are expecting a 

report out from the commission in, we hope, the spring. It may be 

summer before that happens. But we are working right along, as 

required. 

Ms. ESTY. Thank you very much. Be very eager to see that, as 

I know my Governor is very eager to see it, as well. Thank you 

very much. And thank you again to the chairman and to my colleagues. 

Mrs. NAPOLITANO. Would you yield, Ms. Esty? 

Ms. ESTY. I yield back the balance of my time. 

Mrs. NAPOLITANO. Would you yield to me? Thank you. Mr. Mica 

wants the cashless system, which means credit cards. Credit card 

companies do charge retailers, including Amtrak, fees for using 

them, which costs the taxpayer. How, then, is this going to save 

money? Or does it cost Amtrak additional money? 

I know you were talking about it costs more money to do it the 

other way, versus what you are doing now. Please explain the difference. 

Mr. BOARDMAN. Well, we do have a pilot program going on right 

now with a cashless—in an effort to look at how a cashless system 

29 

would really work. But we have not eliminated all the cash requirements at this point in time. 

The debt cards don’t have all those same charges, I don’t believe, 

but this is not an area I am a real expert in. There is going to be 

a demand for the future. Somebody told me that, ‘‘It is you old 

Baby Boomers are the ones that carry cash around in your pocket. 

It is not us Millenniums and younger.’’ So there really is a demand 

for it, as well. That is how people do pay for things today. So we 

are trying to accommodate our customers. 

Mr. SZABO. And, Congresswoman, if I could make a comment, 

too, this is one of the important reasons—going back to Congressman Mica’s concerns, one of the biggest reasons why we think it 

is important to now take a look at Amtrak by the individual business lines we would require a 5-year business plan from them for 

each one of their business lines. And in that business plan we can 

start talking about costs associated with things like food service, 

and better understand what is the plan to achieve better efficiencies. 

And certainly technology will likely be a part of that. It may not 

be the entire solution, for the very reasons you and, you know, 

President Boardman have discussed of meeting the needs of all of 

the traveling public, as well as the potential costs involved, both 

capital as well as operating, in just going entirely cashless. 

Mrs. NAPOLITANO. Well, but how much does it cost Amtrak when 

a credit card is used? Every time. 

Mr. BOARDMAN. I will get a response to you, a written response 

to you. 

Mrs. NAPOLITANO. Would you? Because that adds up. I mean as 

many employees you may have, as many services you might need, 

then that would add up if—every time you do use your credit card. 

Whereas the cashless, do you pay by check or do you pay actual 

dollar bills? 

Mr. BOARDMAN. We will give you a good—— 

Mrs. NAPOLITANO. Thank you, appreciate it. 

Mr. BOARDMAN [continuing]. Detailed response. 

Mrs. NAPOLITANO. Thank you very much. Thank you, Mr. Chair. 

Mr. DENHAM. Mr. Webster. 

Mr. WEBSTER. Thank you, Mr. Chairman. I have a question for 

Mr. Boardman. Do you do market share studies? 

Mr. BOARDMAN. Absolutely, yes. 

Mr. WEBSTER. Florida, which is where I am from, we have millions of people—in fact, probably 100,000 a day—come to my area 

from just internal to United States. Is there a—do you have any 

plans for increasing your market share there, and possibly maybe 

even creating a better revenue source? 

Mr. BOARDMAN. I recently went down and met with Secretary 

Prasad and discussed how we might be able to provide additional 

services. And so we are in discussion right now with Florida on 

what they would like to have us do, especially along the east coast. 

But we haven’t arrived at any agreements at this time. 

Mr. WEBSTER. Yield back. 

Mr. DENHAM. The Administration 2014 request proposes, Mr. 

Szabo, to fund Amtrak through lines of business, Northeast CorVerDate Aug 31 2005 14:39 Jun 20, 2013 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\4-11-1~1\80348.TXT JEAN
30 

ridor, State-supported routes, and long-distance routes. What is the 

benefit that FRA has in allocating funding in that manner? 

Mr. SZABO. According to the business lines, really, a couple of 

things. We believe that it just provides greater transparency, it allows for more accurate accountability, and we really feel it allows 

us, as the Federal Government, to better understand just what 

services that it is that we are purchasing from Amtrak. 

Mr. DENHAM. And I think it is important that we do separate 

them out that way. But followup would be the operating costs 

versus capital. It goes back to our question on the $300 million on 

the State corridors. If the current 209 funding is at $100 million, 

why wouldn’t we separate it? Or why isn’t the Administration separating out the operating costs versus the capital expenditure cost? 

Mr. SZABO. You are talking about for the State-supported service? I mean, actually—— 

Mr. DENHAM. Well, I’m talking about all lines. I mean, obviously—— 

Mr. SZABO. Yes, yes, yes. 

Mr. DENHAM [continuing]. Northeast Corridor still has—— 

Mr. SZABO. Yes. I mean, clearly, strong estimates were put together in both operating as well as capital needs in the preparation 

of the budget. But it really would come back to the preparation of 

that 5-year business plan in better understanding what will be Amtrak’s operating and capital needs, based on that business plan, in 

each of the next 5 years. 

So, it allows for some elements of flexibility, again, to make sure 

that we are getting the maximum value that the public should expect for the services we are buying. 

Mr. DENHAM. And I would like to put up a slide quickly here, as 

I utilize the rest of Mr. Webster’s time. Northeast Corridor profits 

up 143 percent, likely to continue to increase, continue to do a better and better job on the Northeast Corridor, very profitable, more 

and more people riding it. State-supported routes, we are doing a 

much better job, losses are down 24 percent. Federal share will 

continue to drop. I know we still have that concern or question 

about what the asset piece of this is. But dropping another 62 percent. 

31 


Insert offset folio 14 here 80348.014
32 

The big question is the long-distance routes. Losses are up 11 

percent. PRIIA had no impact in reducing those losses. The question is on the long-distance routes. Actually, let me—Mr. 

Boardman, let me ask you. Can Amtrak continue to afford increased losses in long-distance routes? 

Mr. BOARDMAN. I think that is up to Congress. 

Mr. DENHAM. Well, what procedures or mechanisms would you 

put in place to reduce those losses? 

Mr. BOARDMAN. I think that it is very difficult with the way that 

we operate our business model on the long-distance trains to ever 

make it profitable, because you can’t get enough people on the train 

to make that really happen. 

I think where Congress has been on this, right from the beginning, is that it is a common good for the United States, a 

connectivity and mobility of coast-to-coast and border-to-border 

service. Even if you charged a greater amount than the $9.50 that 

Mr. Mica talked about earlier for a hamburger and a bag of chips, 

you are still not going to get the kind of revenue that you really 

would be looking for on some of these long-distance trains to really 

make this happen. 

There has to be an understanding that maintaining the 

connectivity and the mobility by Congress is a common good. If 

that is not understood, this will never continue. 

Mr. SZABO. And, Chairman, if I can add to that, I mean, first off, 

we believe that it is very important that rural America not be 

disenfranchised by, you know, eliminating this very necessary service for them. 

But we believe one of the strengths in our proposal, by having 

the separate business lines, requiring the preparation of 5-year 

business plans for each of those business lines, and again, making 

the appropriate capital investments—it is a critical part of it—to 

both infrastructure and equipment to make sure that this long-distance service is as safe, reliable, and efficient as possible, allows us 

to take a look at where we can achieve additional efficiencies 

through that business plan. 

You know, we should not suffer any illusions that we are ever 

going to make a profit on long-distance service. Clearly, on the corridor an operating profit can be made, and I think you are going 

to continue to see significant growth in State services. 

So the goal with long-distance, and I think we share this—— 

Mr. DENHAM. I understand the goal. I am out of time. I understand the goal. Do we subsidize—— 

Mr. SZABO. What we have to do is—— 

Mr. DENHAM. Do we subsidize the long-haul bus routes? 

Mr. SZABO. Well, you are seeing all that service fade away, sir, 

which is what is making the long-distance—— 

Mr. DENHAM. Is there a Federal subsidy to United Airlines, or 

any of the airline companies? 

Mr. SZABO. I think you could argue that actually there is, if you 

take a look at the entire transportation picture that every mode is 

subsidized in one form or another, including the bus routes, which 

are getting free use of a federally subsidized highway system. And, 

in the meantime, all of this bus service to rural America is going 

33 

away, leaving Amtrak as the only alternative for these rural communities. 

Mr. DENHAM. Thank you. Time has expired. Mr. Cummings? 

Mr. CUMMINGS. At some point, it seems to me, that what you 

said, Mr. Boardman, about connectivity and coast-to-coast transportation is something that all of us should strive for. 

You know, we can keep cutting and cutting, and you will end up 

with zero. And I live in an urban area. I have lived there all my 

life, and I will die there. But I will fight like hell for somebody in 

rural South Dakota or wherever to be able to have access to transportation. 

Now, there are several issues here, and one of them is this whole 

idea of competition. And I am convinced—see, you know, the—on 

the one hand you have got a goal, I guess, of trying to have transportation all over the country. And then you have got the Northeast Corridor doing a great job, I guess sort of subsidizing. Is that 

right? 

Mr. BOARDMAN. That is correct. 

Mr. CUMMINGS. The others. But do you think—I keep hearing 

these, you know, complaints about we need more competition, and 

that will help matters. And there is probably some truth to that. 

But, I mean, what is your reaction to that, Mr. Boardman? 

Mr. BOARDMAN. I have a couple reactions. And one of the things, 

if you will permit me for just 1 second—— 

Mr. CUMMINGS. Yes, sure. I only got 3 minutes and 20 seconds, 

but go ahead. 

Mr. BOARDMAN. When we talk about profitability on the Northeast Corridor, for example, and 143 percent was put up on the 

screen, it is, I think, sometimes very difficult to understand that 

is only operating. That has nothing to do with capital. If you added 

this book or even part of it, or even the existing capital that we 

have in there, you would see numbers worse than what you see on 

the long-distance trains. 

And with long-distance trains, at least part of the cost is capital, 

because we are operating on the private railroads’ line. And a huge 

part of the cost for us, and what we look for, is what we pay the 

freight railroads to provide that service. So, we are not really comparing apples to apples in the way that I know that we really want 

to. 

In terms of your question, though, about competition, and what 

does it mean—and Mr. Mica’s gone. It wasn’t Margaret Thatcher 

who privatized the British rail. In fact, she said that it was a privatization too far, and it wasn’t something that she was really 

going to do. 

And one of my big worries and concerns here is that what the 

concept may be in reauthorization is we can split out the Northeast 

Corridor, privatize the Northeast Corridor, and then operate or not 

operate the rest of the country. This is a network operation. We 

bring over a half-a-million people a year into the Northeast Corridor from the long-distance trains. That is 1,300 and some odd 

people a day. That is 40 busloads of people that are being brought 

into the Northeast Corridor. 

Mr. CUMMINGS. And it is also our constituents. 

Mr. BOARDMAN. That is correct. 

34 

Mr. CUMMINGS. Let me ask you something, real quick questions. 

Amtrak now carries 75 percent of travelers between New York and 

Washington, DC. All of them travel through the Baltimore and Potomac Tunnel under the city of Baltimore, where I live. As you 

know, this tunnel is a bottleneck on the Northeast Corridor, and 

is in desperate need of repair. The American Recovery and Reinvestment Act provided $60 million for the development of a new 

tunnel alignment, as authorized in the PRIIA legislation. 

Can you give me an update on the status of this project, how far 

along we are in developing a new rail alignment? Further, once the 

alignment is identified, do you have any estimate of how much construction of that alignment would be actually—would actually cost? 

Mr. BOARDMAN. Yes, we can. And we can do that, basically, Mr. 

Cummings, because of this report. If you open to page 20 on the 

report—and I think I gave every committee member a copy of 

this—what you find is that we are in the preliminary engineering 

and environmental analysis phase, which is a good thing. Because 

if you look at a lot of the other projects in here, they are not along 

that far. 

And what that is going to allow us to do, then, with funding from 

Congress, is to get to final design, and then we will know what it 

is really going to cost us to replace these tunnels. Right now the 

estimate is $1,500,000,000 in this report. So we are making 

progress, and we appreciate the support we have gotten from you 

and from others that we can make that progress. 

Mr. CUMMINGS. And with regard to the—our—Penn Station, 

what funds are currently available to Amtrak to support station 

modernization? 

Mr. BOARDMAN. I don’t have the number with me, but I will respond to that in writing. 

Mr. CUMMINGS. Well, we will send it to you in writing. Thank 

you, Mr. Chairman. 

Mr. DENHAM. Mr. Bucshon. 

Dr. BUCSHON. Thank you, Mr. Chairman. Mr. Szabo, as you 

know, the Highway Trust Fund has not met the financial requirements for our infrastructure for quite a number of years, and has 

required other money to be appropriated from other areas of the 

budget to meet those needs. 

And I see the Administration proposed funding Amtrak by rolling 

it into an expanded Transportation Trust Fund funded by what 

is—and maybe I am ignorant to this, but financed with mandatory 

contract authority and discretionary obligation limitations. As you 

know, we already have a transit system in our cities that is part 

of the Highway Trust Fund designated funding stream, and we 

can’t keep up with that, partially because they don’t contribute to 

the Highway Trust Fund. 

So, I am just interested in why the Administration thinks that 

this is a good idea, other than taking away the discretionary process from Congress for Amtrak. And be more specific about how you 

think we can bring more money into what the Administration is 

calling an expanded Transportation Trust Fund. 

Mr. BOARDMAN. Sure, sure. First off, Congressman, I think it is 

really important to note that with the establishment of the Transportation Trust Fund we are not—absolutely not—talking about diVerDate Aug 31 2005 14:39 Jun 20, 2013 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\4-11-1~1\80348.TXT JEAN
35 

verting any of the existing revenues that go into the highway or 

transit program. We are not proposing that any of those be diverted for rail. But we are, in fact, recommending that rail become 

a part of a broader Transportation Trust Fund. 

You know, recognizing the fact that we have to look at transportation holistically, multimodally, and start positioning ourselves so 

that whether it is moving people or goods, we can use the mode 

that happens to be most efficient for a particular journey. And so, 

rail, both passenger and freight, has clearly been the underutilized 

mode. And so we have to give a parity with the other modes. 

And so, that is why it is important that it become a part of the 

trust fund. The funding for our 5-year reauthorization proposal 

comes from the $600 billion savings from the overseas drawdowns, 

allows $300 billion of that immediately to go to deficit reduction, 

and then takes $214 billion to go into the Transportation Trust 

Fund to fully fund the highway piece through the year 2020, and 

transit, and allow the $40 billion that we are requesting for rail reauthorization for our 5-year program. 

Dr. BUCSHON. So using the OCO funds, so-called OCO funds, 

Offseas Contingency Operation funds, obviously here in town we 

have tried to use that for almost everything possible. 

As you know, we are planning to draw down anyway. So in my 

view it would be like saying, you know, that I plan on buying a 

$40,000 car next year. And then, when next year comes around, I 

say, ‘‘Well, I have decided not to buy the car,’’ and all of a sudden 

my bank account has $40,000 in it because I didn’t actually buy the 

car. 

So, I just—my point is that, you know, we already have trouble 

funding the Highway Trust Fund, based on the current funding 

stream through the Federal gas tax. I am a little skeptical that, 

with the proposal from the Administration, that we wouldn’t just 

get ourselves in a pretty significant bind. And it is really theoretical money that really doesn’t exist, because we are broke. 

And so, I was just curious. Like I said, other than taking away 

the annual or how many ever years we appropriate money to Amtrak, or authorize money for Amtrak and then appropriate it annually, other than taking that away from Congress, what would be 

the benefit of putting Amtrak into an expanded Transportation 

Trust Fund? 

Mr. BOARDMAN. Predictability. It not only comes back to the parity that I talked about, but predictability. For the first time with 

rail, we would be able to make long-range plans and predictably invest, just as we have been able to do now for, what, seven decades 

for highways and roads, and you know, certainly several decades 

for aviation and transit. And so, again, it comes back to the need 

to give rail parity with the other modes, allow us to balance our 

transportation network. 

And, you know, in life all of us have to make priorities and 

choose. And it doesn’t mean necessarily one thing or the other. It 

means doing two or three things over here, and not doing three or 

four things over here. And so, taking the $600 billion in savings, 

directing $300 billion immediately to deficit reduction, and funding 

transportation with $214 billion we believe are appropriate priorities. It helps us get our house in order, both from a deficit reducVerDate Aug 31 2005 14:39 Jun 20, 2013 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\4-11-1~1\80348.TXT JEAN
36 

tion standpoint, as well as making the very necessary upgrades to 

our transportation network, particularly for rail. 

Dr. BUCSHON. Thank you very much. I yield back. 

Mr. DENHAM. Thank you. Ms. Brown. 

Ms. BROWN. Thank you. And hello, Honorable Szabo. I have not 

seen you in a long time. And Mr. Boardman. I have a couple of 

questions. 

Let me just say I was watching the news recently and I saw that 

Amtrak ridership was up. It was a big story. So can you give me 

some in-depth information about it? Because it is very exciting for 

me to know that people are riding the train. And we understand 

that we in Florida are not just competing with Alabama and Mississippi and those other nice States, but we are competing with the 

Chinese that have put $350 billion into rail. And we are just trucking along. You know, we are the caboose, and we don’t use cabooses 

any more. So would you just give me some updates? I am very excited about it. 

Mr. BOARDMAN. I—— 

Ms. BROWN. And I am one Member, and I am probably the only 

one, that would not put a dime of the savings into deficit reduction. 

That is a long-term problem. I would put every dime into infrastructure investments. That is my position, but I am not the President and I am not the only Member of Congress. But no, that is 

my position. I want to grow the economy. I want to invest in infrastructure. 

We used to do that. We used to do it on a bipartisan method here 

in Congress. And I hope we can get back to it. We want to put people to work. So that is my opening statement, Madam Chairman 

and Mr.—and my question, I told him. Tell me about two things. 

Tell me about that big news story I saw on television. 

Mr. BOARDMAN. We have been—Congresswoman, it is good to 

have you here. 

[Laughter.] 

Ms. BROWN. I was at the VA. 

Mr. BOARDMAN. You always ask me the question, and then you 

take me on another trip. 

One of the things that I think that are—I don’t have all the numbers in front of me, we would be happy to give you all the numbers—but we are setting records that we have had the greatest ridership on record for March in our history. For any month that Amtrak has operated. 

Why and how are we doing that? Well, I would like to think we 

are meeting our customers’ needs. Their wants, their needs, their 

expectations. We are also managing our revenue. We are managing 

what we do for making equipment available, so we are maximizing 

the number of seats that are available, we are increasing our capacity in every way that we can. We are looking for ways to make 

sure that we are reducing the cost to the Federal Government for 

the services that are out there, whether they be capital investments or whether they be operating investments. 

So, it is really that foundation of safety, the focus on the customer, and then we see something better on the bottom line. 

Ms. BROWN. Would you talk about Hurricane Sandy? How are we 

recovering from that? 

37 

Mr. BOARDMAN. We recovered a lot quicker than anybody expected. We pushed very hard. We were open again by the second 

night going into New York City. And within 3 days we were open 

again to Boston, because it was at a critical time for us to move 

for Thanksgiving, which is our greatest ridership and revenue in 

all the year. 

And what we found was even though the original projections 

were we were going to lose more, we actually began to recover 

quickly. So we are recovering what we will have lost, to the largest 

extent, because of this increase in ridership and revenue. We still 

had a problem in a short period of time, and we don’t have the capital to fix the problems that we had during Sandy. 

Ms. BROWN. Can you tell us the importance of dedicated funding 

source, and what would it do for passenger rail in this country? 

Mr. BOARDMAN. I think it would stop us having to do these piecemeal investments. And I believe that all of you up there want to 

figure out a way to make that happen. I understand that. This is 

a difficult time in our Nation to figure out how to finance the 

things that we really need to do, and balance the transportation 

modes. I think that Joe and the Administration have really tried 

to look at this and put a reasonable foot forward on it. I think it 

is difficult on all of you to figure out how are we really going to 

make this happen. 

Ms. BROWN. Mr. Szabo, I have got a few seconds. You want to 

add anything? 

Mr. SZABO. Well, just that, you know, we continue to see rail as 

the mode of opportunity for the future. I mean you just take a look 

at the dramatic growth in passenger rail. And it is not just on the 

Northeast Corridor or in the State-sponsored service, but it is also 

on the long-distance network. And the more that we can ensure the 

safety, improve the reliability, and continue to achieve efficiencies, 

the more it is going to continue to grow. 

Ms. BROWN. Thank you. 

Mr. DENHAM. Mr. Boardman, we recently got the Brookings Institute’s recommendations, the book that I had held up earlier, focusing on the Federal subsidies on the Northeast Corridor and the 

State-supported routes, and having States pick up more of the responsibility for money-losing long-distance trains. 

How would Amtrak support such a structural change to how the 

long-distance trains are funded? 

Mr. BOARDMAN. For the record, because you have put the report 

in the record, I think that the Brookings Institution was right in 

some areas. They are not right about long-distance trains. There is 

not going to be a compact of States that begin to finance long-distance trains. 

States do not want—and, Chairman Shuster, in the discussion 

that led to the Pennsylvanian being resolved, there was an undertone all the time of the necessity or the lack of necessity that there 

was to actually get passengers to Chicago. That is not what Pennsylvania wanted to do. It wanted to get people from Philadelphia 

to Harrisburg, and then on to Pittsburgh. But they resented the 

fact that part of that train’s function may really result in moving 

people in interstate service. 

38 

And I think that is part of the problem here, in looking at a compact of States. I guess the way I look at it, Chairman, is that we 

have one. It is the United States. And it is the United States who 

has to figure out how, for the common good, we are going to connect our Nation together. 

Mr. SZABO. Just for the record, Chairman. 

Mr. DENHAM. Mr. Szabo. 

Mr. SZABO. The Administration would echo that, that when it 

comes to the long-distance network, we believe that compact of 

States is the United States of America. And so it becomes our responsibility to ensure that we have a strong, reliable, and efficient 

long-distance passenger rail network. We think the proposal that 

we have put forward gives us both the capital, as well as operating 

support that it is going to take to do that, that the more efficient 

that we can make—or I should say the more reliable we can make 

the system, the more efficient we are going to be able to make it. 

Mr. DENHAM. Thank you. I have limited time, but I do want to 

just touch on that real quickly. The question is efficient. And 

whether you are talking about California high-speed rail or the 

Northeast Corridor, you start having to make tough decisions on 

the amount of stops that you have. The more stops that you have, 

the less efficient you are. 

And the real question really becomes does a State need a stop 

if it stops at 2:00 a.m. You know, does that State then say, ‘‘No, 

make the rail more efficient. Don’t stop here. We will bus people 

to the next State so that we can have that connectivity’’? 

Mr. SZABO. Let me answer that in two parts. I mean, first off, 

we really believe—and again, our proposal places a strong emphasis on this, that as we move forward, these decisions really have 

to be market-based. We have to do good planning, we have to do 

strong planning, and we have to make sure that States and regions, as they put their plans together, you know, understand the 

types and levels and frequency of service that are most efficiently 

going to meet their market needs. 

When it comes to the long-distance network, you know, yes, there 

are some challenges with service hitting these communities at 2:00 

a.m. and 4:00 a.m. It is kind of the nature of the beast. And I am 

sure those communities would argue that they would prefer to see 

service in the a.m. You know, but unless you are having a conversation about doubling service on the long-distance network, 

there is going to be winners and losers in that a.m./p.m. battle. 

And for rural America, they are still going to tell you, Mr. Chairman, that they would rather have that service than not have any 

at all, because aviation is leaving these rural communities, intercity bus is leaving these rural communities. And rural America has 

to have some transportation options. 

Mr. DENHAM. Thank you. It is certainly an area that this committee will continue to look at. But I think that warrants probably 

a hearing all of its own. 

I did want to get back to the budget. Mr. Szabo, both the House 

and the Senate 2014 budget resolutions include no funding—no 

funding—for high-speed rail grants. Given that the reality of limited fiscal resources, huge trillion-dollar debt increases year after 

39 

year after year, even though this President said it is un-American 

to have increased debt, we continue to see $8 trillion of new debt. 

I know the President’s focus on fix-it-first. But if we are going 

to fix it first, why is the Administration again proposing billions of 

dollars of new high-speed rail projects, like in California, when 

there is $30 billion of backlog of capital projects on the Northeast 

Corridor? If we are going to fix it first, are we going to fix it, first? 

The question is are we going to fix it first, or are we going to 

continue to throw more money at things like California high-speed 

rail, the Recovery Act, the stimulus dollars, $8 billion—and while 

I can appreciate Ms. Brown being willing to give Florida’s money 

to Mrs. Napolitano, that money is still not being spent. So why increase spending in this year’s budget for high-speed rail when we 

haven’t even spent the money from 3 years ago that is still sitting 

in a pot? 

Mr. SZABO. Well, actually, all of that money has been awarded 

and about $3.6 billion of the $10 billion is either construction that 

is completed, currently underway, or we will be initiating here in 

the next couple of months. 

But going back to our budget proposal, a significant portion of it, 

it is all about—the top half of our proposal is all about fix-it-first. 

It is all about meeting the state-of-good-repair needs for the Northeast Corridor. So, we take into account all of those fix-it-first needs 

for the intercity passenger rail network. 

But again, it comes back to having priorities. And we believe that 

rail is the mode of opportunity, has to be put on equal footing with 

other transportation modes. And because, as a Nation we have 

failed to invest in higher performing intercity passenger rail and 

high-speed rail, that these investments need to be made. 

We have come forward with the funding plan, $600 billion of savings. These are real savings from the overseas drawdown, $300 billion immediately going to deficit reduction, $214 billion going into 

the Transportation Trust Fund to make sure it is solvent through— 

I believe it is the year 2020. And then it funds our 5-year proposal, 

the $40 billion that we are looking to take care of both the fix-itfirst needs, as well as moving forward with investments. 

Mr. DENHAM. Thank you. Mrs. Napolitano. 

Mrs. NAPOLITANO. Yes. Just changing track, if you will. Your 

statement, Mr. Szabo, indicates that rail trespassing accounts for 

63 percent of all rail-related fatalities. My district sometimes has 

more than one a year in rail crossings, whether it is railroad or 

Amtrak. 

They could be preventable. I know the railroad has a program. 

But what investment does this budget make in highway rail safety 

improvements and education? And where are these workshops referred to being held? And what is it that we need to know to be 

able to take advantage or—because I do have a lot of rail in my 

area, to be able to tell my cities, my communities, my schools, that 

they can access assistance in being able to educate their youngsters 

and their families. 

Mr. SZABO. Congresswoman, let me start by saying, first off, we 

are particularly proud that, by virtually every statistical measurement, this was the safest year in railroad history. But—— 

Mrs. NAPOLITANO. But it is still high. 

40 

Mr. SZABO. Exactly. And that is where I was going to go. And 

that includes grade crossing fatalities. But they are still way too 

high and, you know, a significant challenge for us. I will, for the 

record, get you the information on where the additional workshops 

are being held as a followup to the workshop that we held in St. 

Louis last year. 

But an important component of our budget proposal, if you go 

down under the area for—it is titled, ‘‘Freight Capacity,’’ which 

really isn’t the best title. In there we are also talking about things 

for community mitigation that would include the ability to do some 

good work like the State of North Carolina has done in sealing 

their corridors, in closing off additional grade crossings and building additional overpasses and underpasses. The safest grade crossing is one that doesn’t exist. 

Mrs. NAPOLITANO. Well, I know in our area we are trying to include more grade separations, because of the—— 

Mr. SZABO. Yes, yes. 

Mrs. NAPOLITANO [continuing]. Alameda Corridor, which could 

benefit the Amtrak. 

Mr. SZABO. And that is the type of project that would also be eligible under that particular line item, things like the Alameda Corridor. 

Mrs. NAPOLITANO. Well, there is a lot of issues with the—because 

we are such a community that is divided by avenues and boulevards, instead of long distances. So we really have a lot of contention when it comes to congestion, when it comes to rail crossings 

and all of that. The safety issue is great for us. So, I really would 

have a great need to be able to see how this is moving along. That 

is one area. 

Then the other area would be to address track cost accidents. 

FRA has issued regulation—concrete ties. Is it all Amtrak usage, 

or is it just Amtrak-owned or State-owned? Because this really is 

an issue. We have had—well, not recently, but we had about five 

or six rail accidents in my area back a few years back. And a railroad replied back by doing replacement of some tracks because 

they were having hairline cracks in their rail. What about Amtrak? 

Mr. SZABO. If I follow your question, the regulation on concrete 

ties would not mandate concrete ties to be used everywhere, but it 

does establish regulations for when they are used. And, obviously, 

there are freight scenarios where they are the safest and provide 

the best cost benefit to the freight carriers. They are certainly appropriate in higher speed rail operations like the Northeast Corridor. The work that is being done in the Midwest, much of it is 

being done with concrete ties. 

An important part of our budget proposal is into research and development. And we have been doing some very good R&D that I am 

hoping to advance even further on track inspection. 

Mrs. NAPOLITANO. With which university? 

Mr. SZABO. I would have to get you that for the record. Actually, 

I believe there are a couple of them involved. But we are using 

laser technology now, or investigating laser technology that actually does a far superior job of not only detecting the flaws, but in 

hopefully, we hope, providing predictability in rail fatigue and helpVerDate Aug 31 2005 14:39 Jun 20, 2013 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\4-11-1~1\80348.TXT JEAN
41 

ing us better understand when it is going to fail, so it can be replaced in advance. 

Mrs. NAPOLITANO. Well, I hate to tell you, but laser technology 

was being used on the rail tie that failed. And it wasn’t as helpful 

as—— 

Mr. SZABO. Well, it certainly isn’t the new technology that R&D 

is proposing now. 

Mrs. NAPOLITANO. OK. Well, we would love to be able to have 

some of that information to be able to pass that on down. 

There are other questions I will submit for the record, Mr. Chairman, but I thank you for allowing us to do this. 

Mr. DENHAM. Mr. Shuster. 

Mr. SHUSTER. Thank you, Mr. Chairman. Long-distance rail. And 

I know New Orleans to Los Angeles, Sunset, is probably the biggest loser we have out there. Is there a breakdown from where the 

ridership is? I am sure there is, but like New Orleans to Houston. 

Does it go to Austin or San Antonio? I am not sure where—San Antonio? 

Mr. BOARDMAN. San Antonio. 

Mr. SHUSTER. And then from Texas to Albuquerque, New Mexico. 

Is there a breakdown? I mean how many people are going from 

New Orleans to Los Angeles? I got to believe very few. 

Mr. BOARDMAN. Yes. There is an awful lot of on and off traffic 

on the train. Maybe not so much on that particular one. That is 

not our biggest loser. Our biggest loser is the one that goes through 

Albuquerque. It is the Southwest Chief. That costs us the most. 

Mr. SHUSTER. Where does it go? 

Mr. BOARDMAN. It goes from Chicago through La Junta, Colorado, over the Raton Pass, to Albuquerque, and then on to L.A. 

So—and I have a chart, Chairman, and it was in the last hearing, 

where if you took the top six losers, you cut off all service to the 

west coast from Chicago all the way—anything that lost over $10 

million a year. 

Mr. SHUSTER. Right. It seems to me that these long-distance— 

you know, are the biggest problem. You know, refocusing, looking 

at them from city to city, is that something that is possible to do? 

Because, again, at some point you are going to have to make decisions. We are going to have to make a decision. I believe we want 

a national rail system. But at this time, do we step back and focus 

on lines that, you know, city-to-city—New Orleans, the Houston, or 

whatever it is, and focus our efforts there? And maybe some of 

these for a period of time you step back away from them and suspend them—because I believe if we do this in the right way, organically this thing grows. We have tried to impose this on the Nation and it just doesn’t seem to be working. 

And we talk about rural areas. I come from a rural area. Everybody has got—98 percent of the people have cars. People aren’t 

clamoring to get on trains and travel the United States. They have 

their other modes to do it. And I know we don’t want to cut off 

rural—as you mentioned, air service is being cut off. But again, 

people have the wherewithal, the vast majority, to move about. 

So, again, do you have an analysis on those city-to-city rides, and 

a breakdown—— 

42 

Mr. BOARDMAN. Actually, people are clamoring to get on the 

trains, believe it or not. You can’t get a bedroom, you can’t get a 

seat many times in the summer time, because people do want to 

see the United States on the train. 

And if you looked at—back to your Sunset Limited example for 

a minute—we operate that 3 days a week. We looked at operating 

it 7 days a week, and the freight railroad that was involved said, 

‘‘OK, but it is going to cost you $700 million to do that, to get back 

on that route for 7 days a week.’’ And that—therein, Chairman, is 

the problem with cutting back. 

If you cut back, then what you are going to have when you go 

back to put it back in service, if you ever do? You probably can’t 

afford to do so. You lose it. And that is the biggest difficulty here, 

is losing the whole shebang. 

Mr. SHUSTER. All right. Well, you mentioned about people clamoring to get on trains. If they are clamoring to get on trains, then 

are we charging them enough money? 

Mr. BOARDMAN. $900 for a bedroom. We are really charging them 

a lot of money. And I didn’t mean to cut you off. It is just we have 

a very high rate to do this. But you have got few people that can 

get on that train. 

And you are not going to want—your freight railroads, if all the 

sudden you proposed to put another train out there, would be very 

negative on that. And I don’t think that is what we want to do. We 

want to get them on the railroads and off the railroads as quick 

as we can. 

Mr. SHUSTER. Because when I talk about charging enough 

money, I ride the Keystoner frequently to Harrisburg. And every 

time I do, my little back-of-the-envelope analysis, they charge me 

somewhere between $29 and $39 one way. So, you know, $58 to 

$79—$60 to $80 round trip. When I do the analysis, I don’t think 

we are charging enough on those trains. And I know—the Governor 

of Pennsylvania decides on rates, is that accurate? 

Mr. BOARDMAN. We work with Pennsylvania on that. 

Mr. SHUSTER. That sound right? 

Mr. BOARDMAN. But it is something they probably want to charge 

more for in the future. 

Mr. SHUSTER. And I guess it is getting close to break-even, what 

we have done there in the Keystone. Is that accurate? 

Mr. BOARDMAN. Yes, I don’t know. Depending on break-even operating—— 

Mr. SHUSTER. Operation, operation. 

Mr. BOARDMAN [continuing]. The capital. 

Mr. SHUSTER. Yes, operationally. So, again, and we need to look 

at those kinds of things. Because, again, I do an analysis and figure $100 for a business traveler being on the train, productivity, 

eliminate the headaches to get in and out of Philadelphia or New 

York or in the corridor. So I think those are things we need to really look at. 

You mentioned, too, that there is not a significant number of people on these long-distance trains—what kind of increase would you 

have to see to move the needle to see significant reduction in the 

cost? 

43 

Mr. BOARDMAN. I think what you are asking for—and we will 

give it to you—is an analysis of the long-distance network, and the 

way that it could operate or not. 

Mr. SHUSTER. Right. And I see my time has expired, but finally, you know, I think you said there is $10 billion—when the chairman 

was asking you about the money that is not spent, you said $3.5 

billion is spent. 

I still think we have to take a real hard look at what we are 

doing in California. I mean it is not in my lifetime that they are 

ever going to come up with the money to build a high-speed rail 

from San Francisco to Los Angeles because that State is in bad fiscal condition. But redirecting that money—and, of course, I would 

make the case, and maybe offending my California friends, that 

that money going into the Northeast Corridor would be a huge benefit. And 5.2—it is about two-thirds of your backlog that you have 

in the Northeast Corridor. 

But even if I back off of that—I see Mr. Denham is lighting up the little—if you took that $3.5 billion and you put it into the San 

Diego-Los Angeles system, or the San Jose-San Francisco, I am told 

by those folks that operate those trains in the transportation world 

there, that would be significant reduction in time from San Diego 

to Los Angeles. And if any place in the world needs help to reduce 

congestion, that is the Los Angeles and San Diego leg or the San 

Jose-San Francisco leg. So, I hope that is something that we look at, because that is $3.5 

billion that they may build that length through the Central Valley, 

but $60 billion more is just—to me—I think it is going to be a complete boondoggle—— 

Mr. SZABO. I will just say this, Chairman. We remain both committed and bullish on the California high-speed rail project. And 

one of the reasons why in our budget proposal, you know, we are 

calling for additional planning dollars is to make sure that we can 

continue and complete the Northeast Corridor future study, which 

is going to be imperative, so they are both eligible and ready for 

future investments. 

And that was the biggest challenge 4 years ago, because the 

States hadn’t come together on a unified vision because good planning hadn’t been done on the Federal level or the State level. They 

really weren’t well positioned for the type of investment that you 

are talking about that is so necessary to allow that to become the 

shining star that it can be. 

You know, it is great service today. But there is no question that 

we can make—— 

Mr. DENHAM. Mr. Szabo, I am going to have to cut you off, and— 

Mr. Shuster went way over his time, and I am trying to run a tight 

ship. And Ms. Brown has been very patient. She and I are going 

to be traveling quite a bit across the Nation, and I need to stay on 

her good side. So, Ms. Brown? 

[Laughter.] 

Ms. BROWN. Thank you, Mr. Chairman. I guess you didn’t think about that when you mentioned the fact that we sent $3 billion to 

18 other States that the legislature and the people of Florida had 

indicated that they were all on board and all supportive, and 1 person—the Governor at the time—sent that money back to the FedVerDate Aug 31 2005 14:39 Jun 20, 2013 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\RR\4-11-1~1\80348.TXT JEAN
44 

eral Government. And over 200 stakeholders came to Washington 

on plane, rail, and everything else to try to get our money, and 18 

other States got the money and put people to work. 

But let me just say something else. We did have an election. And 

I don’t know what it means to anybody, but I think the President 

won. And I think some of his proposals should go through. I mean 

maybe I am by myself. But I do think some of his proposals should 

go through. And when I sit here and listen to people talk about 

transportation, I guess I am the only person in the room that remember when we had Katrina over 3,000 people died because they 

couldn’t be moved out of harm’s way. Over 3,000 people. They 

couldn’t be moved. 

So, we need to think out of the box, like the rest of the world. 

Think out of the box. How are we going to move our people out of 

harm’s way? How are we going to continue to do that? It is not just 

how much it costs. What is the cost of life? What is the cost of service? 

We—Mr. Boardman did not reinstate the Sunset Limited on the 

other side. I have had two meetings with the mayors, elected officials from New Orleans to Orlando that is interested in reinstating 

that system from New Orleans to Mobile to Pensacola to Tallahassee to Jacksonville and Orlando. That is a lot of interest in reinstating that area. How do we work with the local officials when you 

have Governors that have their head in the sand, or think like 

some of my colleagues that, I guess, everybody should have a car. 

Well, those people in New Orleans did not have cars. 

And now, if we have another hurricane, how we going to get 

them out of harm’s way? That is—remains the problem. We need 

to continue to think out of the box. How we going to move our people if we are attacked? It can’t happen the day that the attack occurs. 

Where are we—I know we did a study on the Sunset Limited. I 

have a meeting scheduled in July with all of those elected officials 

coming to Jacksonville. We are very interested in reinstating the 

Sunset Limited. And we know what was the problem. It wasn’t 

that the people didn’t want the services, but the freight rail interferes. And so you are arriving in New Orleans 2:00 in the morning. 

That is the problem. We need a direct from—and you can call it 

anything you want to—starting in New Orleans to Orlando, destination to destination. 

All right, Mr. Boardman. 

[Laughter.] 

Mr. BOARDMAN. We did do the study, Congresswoman. And, as 

you know, our requirement on that particular study was to bring 

it back to Congress and ask Congress to fund it. 

Ms. BROWN. Congress? 

Mr. BOARDMAN. Yes. 

Ms. BROWN. Oh. 

[Laughter.] 

Mr. BOARDMAN. And that did not happen. So we didn’t progress. 

Ms. BROWN. What is the possibilities of doing—you know my colleagues always talk about outsourcing or partnering or—there are 

other people that is interested in participating. What is the possibilities of us doing that? 

45 

Mr. BOARDMAN. We are always interested in working with our 

partners, and certainly working with you. In the end, though, we 

always come back to the dollars that it takes to get the job done. 

And I think that is what we have all been talking about here today 

is how are we going to do that. And we are certainly interested in 

it, but we have to have funding to make that happen. 

Ms. BROWN. There are people that would be interested in just 

cutting out the long-distance so those people in rural areas would 

have absolutely no service, whether it is rail—that is the only service they have now—I have forgotten the number of cities that is the 

only service they have—they don’t have airplanes, they don’t have 

buses. What—I mean I guess they don’t want mail for them, either. 

I mean it is the United States of America. 

Mr. BOARDMAN. I agree with that. I agree. 

Ms. BROWN. I am not through. What I want to know is—back to 

this budget, I see the President’s recommendation on this budget, 

$214 billion for infrastructure for the shortfall, and $40 billion for 

rail infrastructure. Is that going to be a grant-type program, what 

we already have, wherein the Federal Governments put the grants 

out and the State come in not with the Congress—I guess the Administration actually administers it—and we get all upset when we 

don’t tell—when the States don’t do what we want them to do. 

Mr. SZABO. Yes. Congresswoman, if I followed you correctly, if we 

are talking about the allocation of—— 

Ms. BROWN. Yes. 

Mr. SZABO [continuing]. The drawdown dollars, OK, $300 billion go to deficit reduction, $214 billion would then go to help fund the 

needs of the Transportation Trust Fund. As you know, the Highway Trust Fund and others already have their own challenges, and 

so that would assist in essentially helping the Transportation Trust 

Fund for highways, transit, and rail, the highway and transit portion being fully funded out to 2020, and then taking care of the 

funding needs for the $40 billion 5-year rail reauthorization. 

And yes, our program going forward for the rail service improvement program, the new improvements, would be a competitive 

grant process that has to be based on sound planning, good market 

analysis, and understanding the transportation needs of States and 

regions, and how rail fits that role. 

Ms. BROWN. I just got one final question. When a State comes 

in and applies—like California, for example—and they said—I don’t 

know why I want to use California, but they come in and apply and 

we in Congress don’t think they made the best decision, but California and the people of California applied, and they got the grant, 

can we have the opportunity to change it if we decides—or is it 

something about states’ rights that still exists, but only when we 

want it to exist? 

Mr. SZABO. Well, obviously, if you have a competitive grant process, and somebody is selected as part of that competition as having, 

you know, one of the most meritorious projects, I think it would be 

highly inappropriate or irregular for Congress to try and override 

the terms of a competitive grant process. 

Mr. DENHAM. Thank you. As we finish up this hearing, just a 

couple final questions on budgets and priorities. This was a good 

segue into that. 

46 

Mr. Boardman, the Northeast Corridor asset improvements, 

about $30 billion? 

Mr. BOARDMAN. $52 billion, according to the report. 

Mr. DENHAM. $52 billion? And how about total system improvements? What is the need? 

Mr. BOARDMAN. Total system beyond the Northeast Corridor? 

Mr. DENHAM. Yes, sir. 

Mr. BOARDMAN. I would have to get you a number back. I don’t 

have it on my head. It doesn’t—it is not a lot, because we don’t own 

a lot. We have got Chicago, we have got New Orleans, and a few 

other things. 

Mr. DENHAM. And the $52 billion, that is just track, bridges—I 

mean that is just basic infrastructure. That is not trains. 

Mr. BOARDMAN. It is not trains. 

Mr. DENHAM. And what about train and asset improvement? 

Mr. BOARDMAN. We believe that we need to begin to replace the 

Acelas within the next 5 years or so, and we are going through an 

analysis right now of what that will cost. 

Mr. DENHAM. And in the $52 billion, that is also stations, as 

well, correct? 

Mr. BOARDMAN. I believe so, yes. Correct. 

Mr. DENHAM. OK. So, Mr. Szabo, the question I have is—— 

Mr. BOARDMAN. And tunnels. 

Mr. DENHAM. I am sorry? 

Mr. BOARDMAN. And tunnels. 

Mr. DENHAM. And tunnels. Obviously, I did not agree with the 

stimulus package, did not agree with the Recovery Act. But the 

point of it was, as Ms. Brown said, is the President was re-elected, 

and it was his funding. But it was supposed to be for shovel-ready 

projects. Obviously, we have got that money still sitting out there. 

These were all shovel-ready projects, where you could put people 

back to work not only immediately, but you could have put them 

back to work 3 years ago. Fifty-two billion—I mean that is a priority that needs to be in our infrastructure currently, our current 

plans. 

Two questions. First of all, the way that we fund our rail is far 

different from the way that we fund our overall road system, our 

highways across the Nation. Why not have a trust fund for Amtrak? And let me ask first, Mr. Boardman, would you want to have 

a trust fund? 

Mr. BOARDMAN. If we found a way to have predictable, regular 

funding, absolutely. I don’t know if it is a trust fund, or what it 

is. 

Mr. DENHAM. So why not have a trust fund? And for that matter, 

why not, like the Department of Transportation, have a separate 

line item for the overhead expense of just having a national rail 

system? 

Mr. SZABO. Well, I think, essentially, that is what we are proposing in our budget proposal. We are proposing that rail have its 

own dedicated trust fund, and we are proposing that we, you know, 

budget according to each business line so we understand the service that we are buying in each of those business lines and have, 

you know, full transparency and accountability. 

47 

So I think what you are asking me or what you are proposing 

is certainly not far off from what it is we are proposing. I would, 

you know, like to have some dialogue to better understand the differences. 

Mr. DENHAM. I would appreciate that dialogue. Let me go a step 

further, because I don’t feel like your priorities line up for that, at 

least the way that we are looking at in the budget. For $40 billion over the next 5 years, but of that $40 billion 35 

percent would go to Amtrak, 65 percent would go to high-speed 

rail, so you get a very small percentage of the $52 billion that Mr. 

Boardman needs to have infrastructure improvements. 

Mr. SZABO. No. Actually, again, 100 percent of his state-of-goodrepair needs are fully met in our proposal. And then he remains 

one of the eligible applicants for additional growth and development and modernization. 

Mr. DENHAM. In the 5-year budget? You meet 100 percent of his 

needs in the 5-year budget? 

Mr. SZABO. His state-of-good-repair needs. 

Mr. BOARDMAN. Not the $52 billion, but the backlog of the $5.8 

billion that we talked about. And I think what he is saying is that 

we would be eligible for the other $52 billion out of the other 65 

percent pot, if I understood your question—— 

Mr. SZABO. Exactly. To enhance the Northeast Corridor to the 

next level, you know, making the NEC future vision become reality 

that would be eligible to compete under the Rail Service Improvement Program. 

Mr. DENHAM. OK. And as we are wrapping up here, just finally, the $40 billion Amtrak—$26 billion, 65 percent of that, is in this 

other pot. But you are saying that Amtrak would have an opportunity to bid—— 

Mr. SZABO. Oh, absolutely. 

Mr. DENHAM [continuing]. As every—— 

Mr. SZABO. Absolutely, yes. 

Mr. DENHAM. And of the $26 billion, 40 percent of that would be 

allocated to California and to the current high-speed rail—$2.4 billion, approximately. 

Mr. SZABO. No future dollars are automatically allocated anywhere. All projects would be expected to compete, you know, 

through a competitive bid process. 

Mr. DENHAM. You are already well on your way of funding California high-speed rail. You are not just going to let the track run 

from Merced to Bakersfield and then stop. 

Mr. SZABO. As I said, we are absolutely committed, as well, as 

I said, bullish on the project. But we will not presuppose that anybody gets any of these dollars that are expected to be competitively 

bid. And so, based upon the applications, based upon the sound 

planning that has been done, and based upon meeting—service 

being tailored to the market needs. 

Mr. DENHAM. So, of the $38 billion, approximately, that GAO 

says that California high-speed rail needs over the next 10 years, 

the $10.4 billion, or the $40—the $26 billion, there are no guarantees in the $26 billion that California high-speed rail will get— 

there is no guarantee that they will get a large percentage of that, 

or any percentage of that. 

48 

Mr. SZABO. They would have to effectively compete. 

Mr. DENHAM. Thank you. We do have a number of other questions. We will submit that to both of you individually, and look forward to a quick response. 

Mrs. Napolitano? 

Mrs. NAPOLITANO. A very, very quick question, Mr. Chair, and 

that has to do with the service if the States do not comply and pay 

their fair share. We talked about that. And what would happen, 

then, to the labor—to the employees and the labor negotiations in 

any of the contracts you may have? 

Mr. SZABO. Talking about PRIIA 209? 

Mr. BOARDMAN. Yes, let me answer that question. 

Mrs. NAPOLITANO. It is 209. 

Mr. BOARDMAN. That would be one of the shut-down costs if the 

States didn’t come forward. If we couldn’t find a place, then we 

would look for our employees to have—be able to move or shift—— 

Mrs. NAPOLITANO. Relocate? 

Mr. BOARDMAN [continuing]. To another location. If that didn’t 

happen, there is a provision called the C–2 provision, where they 

will be paid their salaries for a period of time. I don’t have that 

in my mind right now, but that is a requirement. 

Mrs. NAPOLITANO. Do you foresee any of this happening? 

Mr. BOARDMAN. I do not know at this point in time. I think we 

have not received either enough yeses or noes from the States. We 

continue to hear from them, but we have not been told. They will 

be delivered a message from me next week that says we either 

have to have these contracts signed, or we will end service within 

180 days. 

Mrs. NAPOLITANO. So that would be—— 

Mr. BOARDMAN. October. 

Mrs. NAPOLITANO. October. And based on that timeframe you are 

giving them, are you arranging to have some other contracts that 

would provide some service—not the same full service—— 

Mr. BOARDMAN. No. 

Mrs. NAPOLITANO. Just—— 

Mr. BOARDMAN. None. 

Mrs. NAPOLITANO. None. OK. Thank you, Mr. Chairman. 

Mr. BOARDMAN. If they decide no, then we are not going to. 

Mrs. NAPOLITANO. Thank you. 

Mr. DENHAM. Thank you. Appreciate both of your time today. 

Again I want to re-emphasize the fact that the passenger reauthorization is going to be up this year. We are going to be very aggressive in working with both of you to come up with something that 

is meaningful for the rest of the Nation. And Ms. Brown and I will 

be going on the road and working with each of you to understand 

the specifics of that around the Nation. 

So, again, thank you both for your testimony and your time 

today. Your comments have been very helpful. 

And if there are no other questions, I would ask unanimous consent that the record of today’s hearing remain open until such time 

as our witnesses have provided answers to the questions that have 

been submitted to them in writing, and unanimous consent that 

the record remain open for 15 days for any additional comments 

49 

and information submitted by Members or witnesses to be included 

in that record. 

[No response.] 

Mr. DENHAM. Without objection, so ordered. I would like to again 

thank our witnesses. If no Members have anything to add, the subcommittee stands adjourned. 

[Whereupon, at 12:08 p.m., the subcommittee was adjourned.] 

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Æ 


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