The new chief of Amtrak told a House subcommittee Wednesday that his government-subsidized company will need an additional $4.9 billion from taxpayers to avoid sweeping service cuts and job losses after Oct. 1.
William J. Flynn, who became president and CEO of Amtrak in April, said the company, which received $1 billion from a roughly $2 trillion coronavirus package passed in March, is burning through $250 million a month because of continued ridership decline caused by the coronavirus pandemic.
Ridership and revenue are still more than 80 percent lower than before the pandemic. Ridership had been down as much as 97 percent.
“We cannot continue to indefinitely fund a workforce too large for the number of passengers we’re serving,” he said, saying the additional money will help “stave off bankruptcy.”
The company’s request is markedly higher than the $1.475 billion it sought in May.
The hearing of the House Transportation and Infrastructure Committee’s Subcommittee on Railroads, Pipelines and Hazardous Materials came one week after Amtrak announced plans to furlough 2,050 employees, 10 percent of its workforce, in October.
But lawmakers at the hearing questioned why the company chose to restore management employees’ 401(k) match while going ahead with the furloughs.
Flynn said the company “heard loud and clear” that taking the match away hurt those managers and that its restoration was done in part to retain employees.
“I think it’s not going to be looked on well,” said Rep. Daniel Lipinski, D-Ill., chairman of the subcommittee.
He expressed frustration that Amtrak didn’t submit its supplemental spending request until 10 days after the House passed a $3.4 trillion coronavirus spending bill in May. And it submitted its $4.9 billion request, he said, just one month before the current fiscal year expires.
Lipinski also questioned the passenger railroad’s decision to temporarily reduce service on most long-distance routes from daily to three times a week. He argued that such cuts were “misguided” and would weaken the rail service.
“Too often it feels like Amtrak is happy to take money from Congress and then ignore Congress’ directives,” he said.
Jim Mathews, president and CEO of the Rail Passengers Association, also questioned the wisdom of reducing the long-distance routes, arguing that dropping daily service in 30 states would create “staggering economic damage in America’s heartland but produce only minuscule savings” to Amtrak.
He said the 12 routes in the crosshairs contribute $4.8 billion to the communities they serve annually and cutting daily service would “drop at least a $2.3 billion bomb on flyover country” while possibly saving just $213 million for Amtrak.
Flynn said the May request was the result of assumptions of a V-shaped recovery. That recovery has not happened, he said.
He said the railway now expects ridership in 2021 to be just 34 percent of what it was in fiscal 2019, before the pandemic.