Statement on Signing the Amtrak Improvement Act of 1973.

THREE years ago this week I signed into law the Rail Passenger Service Act of 1970, making the Federal Government a supporting partner with our Nation's passenger railroads in the effort to maintain nationally available, high-quality, economically competitive intercity rail passenger service in this country.

Emerging trends and international events since that time have increasingly dramatized two additional dimensions of the national interest in enabling--and indeed encouraging--our people to choose a train when they make travel plans. Those dimensions are energy conservation and protection of our environment. Railroads can carry more passengers over greater distances per gallon of fuel than automobiles or airlines are able to do, while adding fewer pollutants to our air. With our oil resources becoming increasingly precious, not just this winter but for some years ahead, the energy efficiency of rail travel is an especially compelling argument for expansion of appropriate Federal assistance to Amtrak, the rail passenger corporation.

It is with these concerns in mind that I have today signed S. 2016, the Amtrak Improvement Act of 1973, despite my reservations about several aspects of this bill.

S. 2016 provides for increased Federal financial aid to Amtrak during the current fiscal year, in the form of a $107 million increase in grant authority plus $300 million in new loan guarantees, thus assuring the corporation of continuity and flexibility in its operations at this important time in rail passenger development and in our national energy squeeze. It should enable Amtrak to build on the progress it has already made in reversing the long downtrend in rail passenger ridership and to make further ridership gains beyond the one-third improvement expected in the current fiscal year above the level of fiscal year 1972.

To my regret, however, the Congress in framing this bill failed to address some of the major shortcomings that have shown up in Amtrak's early experience, including a number of routes with uneconomically low ridership, persistent management weaknesses, and increasing operating losses.

Three sections of S. 2016 actually threaten worsen these problems:

--Section 11 freezes all Amtrak mutes in existence for another year and requires the establishment of at least one additional experimental route each year.

--Section 12 deprives the executive branch of any meaningful authority to review in advance the spending plans of the rail passenger corporation or to exercise sensible budgetary and legislative control. We will seek legislation to repeal the mandatory spending and direct budget submittal features which create this anomaly, but in any event I do not consider that they establish a precedent for other agencies, since Amtrak enjoys special status as a profit making corporation.

--Third, section 14 gives the Interstate Commerce Commission broad new regulatory responsibilities which would have the effect of dictating the way in which a large part of Amtrak's capital and operating expenditures are made without regard to the economic disciplines which ought to govern corporate decisionmaking.

The overall effect of these provisions would be to deepen in amount, and to extend indefinitely in time, Amtrak's dependence on public funds, and simultaneously to bar the executive branch from exercising the close stewardship over subsidy funds which taxpayers have a right to expect. The original intent with which Amtrak was established--that of creating a market-oriented, profit making corporation which would gradually outgrow the need for taxpayer support--would be turned precisely inside out, tending to make Amtrak a permanently subsidized establishment.

Accordingly, while I have decided to sign this bill for the overriding reasons already stated, I am also directing the Secretary of Transportation to take immediate steps aimed at remedying the bill's defects. Legislation to change the objectionable provisions will be submitted to the Congress, and while that is pending, the Administration will move to improve Amtrak's management efficiency and economic viability through the authority granted by S. 2016 to establish general guidelines for grants and loans and to review certain aspects of management.

Finally, looking beyond the rail .passenger problem to the larger context of the Nation's overall railroad needs, I want to emphasize very strongly that my acceptance of this bill in no way alters my position that Federal action to shore up the financial condition of our major Northeast and Midwest railroad freight lines must take the form of a private solution that would impose only a minimal and finite financial burden on the taxpayer. As I stated in my message to the Congress on national legislative goals on September 10, I simply could not sign any legislation which purported to solve this problem through massive, open-ended subsidies or through quasi-nationalization. As we work with the Congress to strengthen the new Amtrak Improvement Act, the Administration will also continue cooperating fully in helping to produce a sound, acceptable bill to assist the bankrupt Northeast-Midwest railroads.