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Amtrak Proposal by 4 Senators Breaks With Bush Plan (Update2)

July 30 (Bloomberg) -- Four Republican U.S. senators proposed to keep Amtrak running for at least six more years, clashing with President George W. Bush's plan to dismantle the money-losing passenger railroad.

Senators Kay Bailey Hutchison of Texas, Conrad Burns of Montana, Olympia Snowe of Maine and Trent Lott of Mississippi proposed a $2 billion annual subsidy for six years and a $48 billion fund backed by bonds for track improvements to speed up trains. Amtrak would operate a national train system and turn over track ownership in the Northeast to the U.S.

Bush's administration on Monday proposed turning over Amtrak service, which has lost $25 billion since being created in 1971, to private operators over a six-year period to stem losses. States would decide which routes should be run, and nationwide service would end if states couldn't agree on funding and train schedules.

``I am extremely disappointed with what the administration came up with,'' Lott said at a Washington news conference. ``What they have proposed on Amtrak is a total non-starter. It will get the amount of consideration it deserves, which is nothing.''

Hutchison said that winning approval for the senators' plan would take until next year and that Amtrak in the meantime may get as much as $1.4 billion for the fiscal year that starts Oct. 1. Amtrak wants $1.8 billion, twice what the Republican administration proposed. The subsidy for this year is $1.05 billion, after a record loss of $1.2 billion the previous year.

`Fundamental Reform'

The senators' proposal ``isn't linked to a fundamental and needed reform of the system that is going to help the vast majority of passengers,'' said Transportation Department spokesman Leonardo Alcivar. ``It is surprising that anyone in the Congress would want to continue the status quo. The administration doesn't hold a slavish devotion to a 40-year old route structure.''

The House and Senate are considering other measures that would give Amtrak between $900 million and $2 billion for next year, without approving any funds yet.

Bush's plan would create multi-state coalitions to run trains and end federal payments to cover operating losses after six years. States, which now aren't required to pay anything for capital costs such as new equipment, would have to pay 50 percent.

The administration's proposal ``is a death sentence for rail service if the states have to pick up additional costs,'' said Eileen Doherty, a spokeswoman for the National Conference of State Legislators, a Washington group that lobbies on behalf of elected state officials. ``Any shift in the cost for rail services is misguided because of the financial crisis states are facing.''

States would have to pay 20 percent of track improvements under the senators' plan.

Amtrak, whose subsidies cover about 40 percent of its costs, has needed bailouts at least $270 million in the each of the last two fiscal years to avoid running out of cash.

Last Updated: July 30, 2003 16:49 EDT