Rebels stall Amtrak break-up plan

Amtrak says it needs $1.8bn in subsidies

A US Government plan to break up ailing national rail operator Amtrak has already run into resistance in Congress.

The Department of Transportation wants to eliminate Amtrak's up to $1.8bn (£1.1bn) in annual subsidy, handing over responsibility to the states.

This, the department believes, will be the first step toward splitting the firm into three parts: an infrastructure operator, a government-owned passenger rail operator, and contractor of private train services to individual municipalities.

But four Republican senators have warned that the plan would destroy any semblance of a nationwide network, and proposed new legislation to pump $60bn into Amtrak over the next six years.

'Guaranteed to fail'

"I think that what [the Bush administration] have proposed on Amtrak is a total non-starter and for the most part will get almost no consideration in the Senate, which is what it richly deserves," Senator Trent Lott said.

"If after two-and-a-half years that's all they can come up with, they ought to be ashamed. It is a guarantee to fail."

Senator Lott and his colleagues argued that Amtrak's woes had been caused by years of penny-pinching.

This is the opposite point of view to that of many Republicans, who say that years of lavish subsidies have made Amtrak unwilling to reform.

Since it was founded in 1970, the firm has never made a profit, and last June came close to complete financial collapse.

Head to head

Now, the two competing proposals will fight it out in the Senate, traditionally a source of support for Amtrak.

The powerful Senate Commerce Committee will be the focus of the struggle; its chairman, John McCain, is a proponent of the break-up plan, but many members are believed to be likely rebels.

The pro-Amtrak camp admits that committing to an extra $60bn in subsidies might seem reckless at a time of budget cut-backs.

But they argue that some of the deregulatory aspects of their plan - forcing Amtrak to open up more to competition - will save the state money in the long run.

With the House of Representatives already on its summer break, there is only the month of September to get a bill through Congress before the next budget is drawn up.