The Administration released its *PROPOSED FY 2007 Budget this morning, February 6, 2006. To view the Budget go to OMB’s web site: www.whitehouse.gov/omb/budget/fy2007 where you can click on, and download The President’s Budget Message, and then click on the Department of Transportation. To get the tables with the FY 2007 numbers you need the CD-ROM which is only available with the hard-copy budget document. There are two items of interest to railfans in the FY 2007 Budget.
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Proposed Elimination of the DOT Railroad Rehabilitation and Improvement Low Cost Loan Program
The reasons for eliminating this program are there are no justifications to extend favorable loan terms to private companies, taxes on diesel fuel have been eliminated, and the Government would have to cover any unsecured losses which could be significant in case of a loan default. -
Reforming Passenger Rail Service
In a 2005 assessment of Amtrak the Administration called for significant reforms in curbing losses in its FY 2006 Budget message, and while the Administration feels some progress has been made more needs to be done. In its FY 2007 Budget Message the Administration states Amtrak can no longer maintain the “status quo,” it must reduce costs. The FY 2007 Budget Message quotes part of a December 3, 2005 editorial in the Washington Post – normally friendly toward Amtrak – with Secretary Mineta’s position to only fund passenger service that makes sense. The Administration proposes to give Amtrak to $900 million for FY 2007, and that is broken down into $ 500 million for capital costs - such as upgrading the Northeast Corridor – and $ 400 million for operating costs in discretionary grants contingent on Amtrak’s making the necessary reforms. One of the suggested cost reductions is to phase out the long distance – overnight- passenger trains while others are to overhaul the money-losing on-board food and beverage services and address Amtrak’s high labor costs. -
My take On All of This. <