Amtrak, Bush Administration Reach Deal to Avert Shutdown

Amtrak will continue to operate thanks to a deal reached late Friday between the passenger rail company and the Bush administration.

"Our goal was to ensure uninterrupted service for the over 750,000 Americans who rely on Amtrak and our nation's commuter rail service every day, and we have accomplished that goal," Transportation Secretary Norman Y. Mineta said.

Under the terms of the agreement, the Transportation Department will give Amtrak a $100 million loan and the Department and Amtrak will jointly ask Congress for another $100 million.

The funding will prevent a systemwide shutdown by closing a $200 million budget gap, but falls far short of erasing Amtrak's long-term problems. Amtrak's total debt was estimated in march to be $3.85 billion.

As part of the deal, Amtrak agreed to a dozen conditions set out by the administration, including greater financial accountability and a freeze on management salaries. Amtrak will also suspend bonuses this year for employees making more than $75,000.

One thing Amtrak didn't give up, however, is control over its seat booking systems, food service, and equipment maintenance. The administration had sought a provision that would have prevented Amtrak from entering into any agreements that limited its ability to contract those services out.

The restriction didn't make the final cut.

"This has been an important week for passenger rail because the events of this week have forever dispelled the question of Amtrak's relevance in the nation's transportation future," Amtrak's governing board chairman John Robert Smith said.

One term of the deal left open was the form of the Congressional assistance. Amtrak would prefer a $100 million appropriation that wouldn't need to be paid back, but the aid could come as another loan.

Mineta's long-term plans for Amtrak include removing the company as the owner of 366 miles of tracks in the Washington-Boston corridor and making states contribute more to the cost of train service.

Although he opposes the drastic reforms proposed by Mineta, Amtrak president David Gunn supports some of the current deal's terms.

"A lot of this is stuff that should be done," Gunn said.

The Associated Press contributed to this report.