REMARKS FOR THE HONORALE NORMAN Y. MINETA
SECRETARY OF TRANSPORTATION
ASSOCIATION FOR A BETTER NEW YORK (AMTRAK)
NEW YORK, NY
NOVEMBER 17, 2005
8:30 AM
Thank you, Bill [William Rudin, President, Rudin Management and Chairman of the Association for a Better New York] for that kind introduction.
And my thanks to all of you for taking time out of your busy schedules to be here this morning. This is a powerful gathering, and I appreciate Bill and the Association for a Better New York making it possible for me to speak with you today.
I wanted to come here to give you a first-hand report on what is going on with Amtrak.
I thought that it was important to do so here, because nowhere is intercity passenger rail service a more vital piece of the transportation puzzle than it is in New York City.
And I thought that it was important to do so now, because significant changes have been set in motion.
And contrary to some assertions by people who have many mixed agendas, I want to tell you what my objectives are with respect to Amtrak… and what they are not.
During my thirty years in public life, transportation has been my passion. When I was a mayor of a city that was becoming the center of the Silicon Valley, transportation was the central component of my work on business development.
When I was chair of the major transportation committee in the Congress, I joined with your Senator, Pat Moynihan, and we required the obsolete federal transportation funding system of “freeways first” to become an intermodal system that included public transit – both heavy and light rail.
Yet throughout this time, first Conrail and then Amtrak kept successfully operating on a subsidized basis while making one broken promise after another that it would reform itself and become a profitable enterprise.
Many Members of Congress would accept these promises knowing that there was nothing behind them. They did that because, if asked, they actually believe that America should have a European-style, state-subsidized system of rail. But, the truth of the matter is, since Congress as a majority and Americans as an electorate would flatly disagree with that approach, they were satisfied with the status quo.
The result: in the field of transportation, the passenger rail system in the United States today is an antique.
I believe very strongly that there is a viable future for passenger rail transportation in the United States. But the future is not the 1950s model for passenger rail.
You might want to lean a little closer for this next part – I had to leave Washington D.C. to be able to say it.
The United States is not Europe or Japan.
Passenger rail simply cannot compete with air travel in most markets in the United States. The country is simply too large; our population centers are too distant.
Unless you are taking the train for the experience of taking the train, you do not ride Amtrak from New York City to Los Angeles… or Denver… or probably even Chicago. Not when you can make the trip by air in hours, rather than days… and, in most cases, at a lower price.
On the other hand, many of us prefer to take the train from New York to Washington, D.C., or Boston. On those routes, Amtrak basically splits the market with the airlines. And a lot more Americans would like to take a fast and efficient train system from Boston to New York… or Sacramento to San Francisco… instead of driving.
I have spent the last year traveling the country, looking at the rail system and meeting with community and business leaders. I firmly believe that there are other regions where passenger rail can be a viable transportation business.
Some of them already exist. And, as corridor traffic grows, it creates links where longer distance rail travel, that wouldn’t otherwise be viable, is nevertheless available.
Strip away all the rhetoric and the histrionics and here is the fundamental difference between the Bush Administration and its critics. We are willing to use taxpayer money to fund passenger rail where it makes sense, but we aren’t where it doesn’t.
Let me say that again. This Administration is willing to invest federal dollars in passenger rail service.
We are willing to provide federal funds to build and repair tracks, just as we spend taxpayer money to build and repair highways, runways, and subway lines.
We are willing to invest federal funds in train stations and switching equipment, just as we invest in exit ramps, air traffic control towers, and new transit depots every day.
And yes, we want to spend federal funds to improve the tracks, tunnels, bridges, and stations along the Northeast Corridor, which we recognize is vital… not just to New York and the other communities along the route… but also to the economic health of this Nation.
But we aren’t willing to continue funding the current system. We aren’t even willing to continue funding tinkering around the edges.
In corporate America, if your failing business wants to attract new capital to keep it afloat, you have to make real changes to your operation… changes that are significant enough to give new investors confidence that your company can turn itself around. That’s exactly where we stand with Amtrak.
Just two weeks ago, the government’s auditors issued a scathing indictment of the company.
They pointed to systemic failures ranging from weak financial reporting and management… to lack of clear mission and strategic plan… to transparency and accountability issues.
But most troubling of all was the bottom line. From 2002 to 2004, when Amtrak was supposedly being “stabilized,” its losses actually increased by 7 percent. And the report predicted annual losses would increase by another 40 percent by 2009.
If your company were already losing a billion dollars a year, and you received that prognosis, you would take decisive, dramatic action to reverse it. Period.
Well, wait a minute. I take that back.
You would take decisive action unless you could go back to the Congress and get more money without real reforms.
Amtrak management has always been able to do that…. and they expected that they could do it this time.
And that’s precisely what the Amtrak Board and the U.S. Department of Transportation said that it did not want to happen. Tough choices have to be made. There is simply too much at stake to allow one of the worst performing business enterprises in America to deteriorate any further.
Sadly, there are those who are erroneously characterizing the Board’s action as the first step toward shutting Amtrak down.
Let me suggest that the best indicator of the Board’s true intentions will be their selection of Amtrak’s next chief executive.
And Board President David Laney made clear, they’re looking for a turn-around CEO... not a liquidator. I agree.
The Board has shown that it is serious by crafting an ambitious reform proposal and demanding action on it. And on September 22, it began to pave the way for Northeast Corridor improvements by beginning to study how to establish it as a subsidiary, within Amtrak.
Board President Laney told Congress two days ago that nobody fully understands the complexities of this task. And that’s why the Board will study the issue before making any decisions.
And there are encouraging signs that the Congress is beginning to accept the Administration’s approach to real reform.
Just as we promised in February: we are willing to invest federal funds in Amtrak if the money comes with reforms attached.
And I’m hoping that next year we will be able to tie even more reforms to a new budget request. It’s the only way to put passenger rail service in the United States back on the right track.
There are some who have said, “Mineta, what happened? You’re going to stand by while Amtrak is dismantled?” Let me be clear about this. Amtrak is not a public policy issue that you can sit around and debate while nothing gets done. You can’t stall reform because just you can’t get the system that you want.
This is an operating transportation system that thousands of people rely on. It needs to be run safely and efficiently.
We need a better Amtrak, and I believe that we are beginning to take the actions that will accomplish that.
Again, thank you for letting me come and talk to you today. It’s always a pleasure to be in this great city. Thank you for everything that you do to keep it great.
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