Trainsmag.com just reported that Amtrak has yet to land a $205 million loan that will prevent it from shutting down in July, but gained the support of an unlikely ally on Friday: Sen. John McCain, the railroad's chief critic in Congress.
The backing of the Ariz. Republican will likely help Amtrak secure a loan. As collateral for the loan, Amtrak plans to use the $1.2 billion federal subsidy it is seeking for the fiscal year that begins October 1.
With McCain signaling his support, lenders may easily concude that Congress ultimately will back the railroad's request to double its annual subsidy to $1.2 billion from $521 million. A $1.9 billion measure, which includes funding for tunnel safety and security improvements on the Northeast Corridor, is working its way through the House.
McCain said he would ask the Commerce Committee to hold a hearing on what can be done to avoid a shutdown of Amtrak.
"Clearly, a shut-down of Amtrak's operations along the Northeast Corridor, in California, and in certain other locations, would be highly disruptive," McCain wrote in a letter, responding to one from Amtrak Predident and CEO David Gunn. (To read the full text of McCain's letter, see.)
But McCain said he still believes that most of Amtrak's routes are run for political reasons and ought to be dropped or supported by the states.
Nonetheless, Gunn was able to accomplish in three weeks on the job what no one at Amtrak has ever been able to do: Soften McCain's hard-line stancetoward the railroad.
Gunn had told McCain that while Congress should never hjave demanded that Amtrak try to become operationally self-sufficient, Amtrak management never should have agreed to try.
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