Deal solves Amtrak's budget woes

WASHINGTON (AP) -- Having sealed a deal to solve Amtrak's immediate budget crisis, the Bush administration and leaders of the national passenger railroad now must tackle differences over long-term reforms.

Amtrak Chairman John Robert Smith and Transportation Secretary Norman Y. Mineta announced an agreement Friday night to help Amtrak get the $200 million it needs to keep trains running through September.

The deal helps Amtrak avert the first systemwide shutdown in its 31- year history, which had been threatened to begin next week.

But the broad differences between the railroad and the administration were evident even as the two sides were jointly praising the deal.

Smith said Congress, the administration and Amtrak now must "craft a bold new vision for passenger rail that will serve all of the regions of this country."

Mineta called the agreement "an initial, very modest downpayment" toward implementing the administration's ideas for changing the way Amtrak does business.

He has proposed ending federal operating subsidies to intercity passenger rail, a step that could threaten the survival of money-losing trains serving many states. He would also give states more responsibility to pay for train service.

The debate will play out over the next few months as Congress writes a federal budget for the fiscal year that begins Oct. 1.

Amtrak insists it needs at least $1.2 billion to run through September 2003. The administration is sticking by its initial proposal of $521 million, saying the railroad must undergo significant reforms before seeking more.

Smith called $521 million "a non-starter."

Whatever Amtrak receives, it will have to use $100 million to pay back the administration for a loan that is part of the short-term rescue package sealed Friday.