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Bush, in reversal, clears $1.3B in aid to Amtrak

(The following article by Robert Cohen was posted on the Newark Star-Ledger website on December 1.)

WASHINGTON -- After vowing to eliminate all subsidies for Amtrak, President Bush signed legislation yesterday that will provide the financially ailing passenger railroad with $1.3 billion in federal aid for next year.

The Amtrak appropriation is part of a $137.6 billion transportation funding bill that includes more than $120 million for New Jersey highway and transit projects.

The White House, intent on breaking up Amtrak, shifting some of its rail costs to the states and potentially selling off portions of the passenger line to private interests, had proposed zero funding for fiscal 2006, in part to spur financial reforms.

Both the House and Senate rejected the administration plan to end subsidies, coming up with a compromise $1.3 billion package that represents a $108 million increase over current funding.

Amtrak spokesman Clifford Black said the appropriation will allow the money-losing rail line to continue operating in the year ahead and avoid the possibility of insolvency.

The measure includes $495 million for operating subsidies and more than $780 million to maintain and repair capital infrastructure, of which $280 million could be used for debt-service obligations.

The agreement requires Amtrak to achieve savings by increasing its operational efficiency, including changes to food and beverage services and first class service. It also requires submission within 60 days of an approved comprehensive business plan to Congress to curb continual operating losses.

Separate legislation to provide a long-term financing solution and mandate specific reforms for Amtrak is pending in Congress. The plan, sponsored by Sens. Trent Lott (R-Miss.) and Frank Lautenberg (D-N.J.), is opposed by the Bush administration because it envisions maintaining a nationally-run rail system and continuing large subsidies for years to come.

The congressional plan had been backed by Amtrak President David Gunn, who was fired earlier this month by the rail line's board of directors. Gunn also opposed the board's plans to separate the Northeast Corridor from the rail corporation.

Besides Amtrak, the legislation signed by Bush will provide funding for a number of New Jersey initiatives.

These include $12.3 million to continue planning for a new rail tunnel linking northern New Jersey to Manhattan; $100 million to extend the Hudson-Bergen Light Rail 6.1 miles north from Hoboken to Tonnelle Avenue in North Bergen and south from 34th Street to 22nd Street in Bayonne; $2 million for the Delaware Ferry Terminal; $1 million for Newark Penn Station improvements; and $3 million for restoration of Morristown Station.

Thursday, December 01, 2005

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