Washington, D.C.– The House Transportation and Infrastructure Committee held a hearing today to receive testimony on a controversial and potentially unconstitutional Republican bill to privatize Amtrak that would put it out of business by auctioning off its assets to the highest bidder.
“The non-partisan Congressional Research Service has determined that this proposal is unconstitutional because it violates the Appointments Clause of the Constitution. It is also likely that the proposal violates the Takings Clause because it takes Amtrak’s private property without just compensation,” said U.S. Representative Nick J. Rahall (D-WV), top Democrat on the House Transportation and Infrastructure Committee. “As a for-profit corporation, I believe Amtrak’s standing is little different than that of any other for-profit corporation in America.”
Amtrak was created by Congress in 1970 to take over passenger rail services previously operated by private rail companies after years of declining ridership and financial losses. The Republican proposal would strip Amtrak of its assets, demand that it continues to pay its debts with no means to do so, and would provide $2 million in Federal funds to up to three entities to submit proposals. The Northeast Corridor Executive Committee established by the bill to manage what would be Amtrak’s former assets, which CRS believes is unconstitutional, would accept the proposals and would select the ‘best’ one.
“There is no criteria contained in the measure as to what qualifications or restrictions might pertain to these entities. In fact, under a clear reading of the measure, China could qualify and operate the Northeast Corridor. Now, is that something we want to see happen? I do not think so,” said Rahall. “I also fail to see why we would hand over $2 million in taxpayer dollars to up to three entities in order for them to develop detailed proposals. This is rather odd; paying somebody to develop a proposal to submit to yourself. I do not think this is how things of this nature are normally done.”
Rahall also warned that stripping Amtrak of its assets in the Northeast Corridor will have a devastating domino effect on passenger rail service from coast to coast. Amtrak CEO and Chief Executive Officer Joseph H. Boardman said in a letter to Chairman Mica that “As currently written, this bill would likely mean the end of Amtrak and the national passenger rail system that Congress authorized nearly 40 years ago.”
“With the abolishment of Amtrak in the Northeast Corridor, the Cardinal in West Virginia will suffer a fatal blow under this proposal, along with many other vital routes that connect rural communities coast to coast including the Auto Train, Capitol Limited, California Zephyr, Coast Starlight, Empire Builder, and Texas Eagle,” said Rahall. “Right now, Amtrak serves about 40% of America’s rural population; all of this service would be lost under the draft legislation.”
The Republican proposal would significantly alter labor protections for thousands of American workers.
“I also have significant concerns about the implications of this proposal on rail labor. Under this measure, the existing contracts of 19,000 Amtrak workers would be abrogated, and new workers would have no Davis Bacon protections and no protections under the Railroad Retirement Act, Railroad Unemployment Compensation, and the Railway Labor Act,” said Rahall. “In other words, this proposal leaves rail labor sitting at the station.”
At the request of Ranking Member Rahall and Subcommittee on Railroads, Pipelines and Hazardous Materials Ranking Member Corrine Brown (D-FL), Chairman Mica agreed to hold a hearing on the measure instead of rushing for Committee consideration a mere 24 hours after introducing the bill, as previously planned.
“In its present form, this proposal will have serious consequences for commuter rail agencies and freight railroads,” said Rahall. “And frankly, I am not sure this proposal can even be fixed. My fear is that if it is enacted, it will result in a Transcontinental Tragedy.”
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