Amtrak Asks for $5 Billion in House Subcommittee Hearing
On Wednesday, September 9, the House Subcommittee on Railroads, Pipelines, and Hazardous Materials held a hearing about recent events at Amtrak in light of the COVID-19 pandemic. After achieving record levels of ridership, revenue, and financial performance in FY 2019 and into the first months of FY 2020, last week, the company announced it would furlough over 2,000 employees on October 1 in light of a 97 percent decrease in ridership due to the pandemic. The company also plans to reduce service on 12 out of 15 long-distance routes from daily to three times per week in October. Amid these proposed cuts and others already enacted by the company, Amtrak CEO William Flynn asked for $4.9 billion from Congress.
Witnesses included (click on their name to read their prepared testimony):
- William Flynn, President and Chief Executive Officer, Amtrak
- Arthur Maratea, National President, Transportation Communications Union (TCU/IAM)
- Amy Griffin, President of America Local 1460, Transport Workers Union of America
- Jim Mathews, President and Chief Executive Officer, Rail Passengers Association
Chairman Daniel Lipinski (D-IL) expressed concern over the announced furloughs. Congress provided Amtrak with $1 billion in CARES Act funding with the understanding that part of the funding would be used to prevent furloughs. He stated that while the announced furloughs come just in advance of the beginning of a new fiscal year, Amtrak “has had months to come to Congress and request additional funding to help keep workers on the payroll.” Among the reasons the company did not receive funding in the proposed Heroes Act was because it did not submit a request until 10 days after the bill passed in the House.
Lipinski urged Congress to act quickly to prevent furloughs, as furloughed workers are eligible for special Railroad Unemployment Insurance that is funded by taxes on the employees of Amtrak and the company itself. He also said that cuts to employees and service would do little to save money, would hurt rural communities, and would make it more difficult to resume normal service when the pandemic is over.
In his testimony, Flynn, who joined Amtrak in April of this year, thanked the subcommittee for its inclusion of a rail title in the INVEST in America Act, which would authorize tripled funding for Amtrak over five years. He acknowledged that the funding Amtrak received in the CARES Act allowed the company to survive the impacts of FY 2020, but per their recently updated forecast for FY 2021, the company now anticipates needing an total of $4.9 billion from Congress to “operate and invest in our network, support our partners, and address congressional concerns such as avoiding employee furloughs and maintaining daily long distance service.” He indicated that Amtrak anticipates burning nearly $250 million per month if they don’t receive supplemental funding.
(Amtrak’s regular subsidy from Congress is about $2 billion per year, via the annual transportation appropriations act, so Amtrak would need an extra $2.9 billion on top of that for fiscal 2021, per Flynn’s numbers.)
There was widespread concern among Flynn’s fellow witnesses and subcommittee members that the service and employee cuts would not be temporary. Flynn stated that if given supplemental funding from Congress directing Amtrak to rescind furloughs, the company would comply.
Maratea raised a compounding factor to the furlough issue: railroad unemployment is subject to budgetary sequestration, resulting in a 5.7 percent decrease to Unemployment Insurance checks for railroaders. (See the bottom of page 15 of the 2021 sequestration notice.) Further, the August 8th memo from President Trump to address the lapse in UI did not include railroaders in the extended $300 COVID-19 benefit.
In addition to this, whereas Amtrak initially suspended a 401(k) match program for its non-labor-agreement employees in response to the pandemic, last week’s announcement included a return of the match. When asked by Reps. Lipinski and Tom Malinowski if restoring the match was appropriate amid other cuts, Flynn indicated that the decision was a matter of “balancing equities,” as the majority of Amtrak’s employees to receive this benefit are frontline managers and supervisors who earn fewer benefits than the labor agreement employees they supervise.
Rep. Rodney Davis (R-IL), emphasized that now is the time to address institutional issues, such as coordination with Class 1 railroads, while ridership is down. Flynn responded that while Amtrak was close to securing the technology advances needed to improve on-time performance, the pandemic has affected their ability to conduct technology testing.