Amtrak Head Seeking Eased Operating Rules : Is Confident Congress Won’t Kill Passenger System’s U.S. Subsidy

The president of Amtrak said Friday that he is confident Congress will not eliminate the passenger rail system’s federal subsidy, as the Reagan Administration has proposed, and suggested that the proposal may instead push lawmakers to ease Amtrak’s operating rules so the company can save money.

At a news conference, W. Graham Claytor, president and chairman of the National Rail Passenger Corp., repeated a warning that Amtrak will have to shut down if its subsidy is eliminated or even reduced.

‘Doesn’t Make Sense’

“The United States would be the only developed country in the world without intercity rail service,” he said. “ . . . I feel confident Congress will see that this doesn’t make any economic sense.”

Amtrak could not simply cut back its routes because of fixed costs, especially labor settlements that require the railroad to pay laid-off employees their full salaries for several years, Claytor said. The cost if Amtrak laid off its 25,000 employees would be $2.1 billion over six years, Amtrak estimates.

Moreover, raising ticket prices would simply drive riders to competing forms of transportation, such as airlines and buses, Claytor said.

Route Changes Inhibited

The changes Claytor is seeking from Congress would make it easier for Amtrak to drop less-profitable routes and let the railroad move employees to fill vacant positions across the nation. Currently, Amtrak must give a laid-off employee a new job within 30 miles of his home or pay him his full salary for up to six years--and that rule, Claytor said, makes it too expensive for Amtrak to change routes.

The Administration believes that the federal government, which owns most of Amtrak’s stock, should get out of the railroad business and that railroads should compete freely with other forms of transportation. The government is in the process of selling its interest in Conrail, the freight line, to the Norfolk Southern Railway.

Secretary of Transportation Elizabeth Hanford Dole recently told Congress that, if Amtrak went out of business, private operators or state and local governments would pick up its more successful or necessary routes.

No Profitable Routes

But Claytor said that no Amtrak routes--not even the popular Los Angeles-San Diego and New York-Washington trains--are profitable. State and local governments, whose federal mass transit subsidies also are targeted for cuts, do not have the money to take over Amtrak’s routes, he said.

Passenger railroads cannot be run without government subsidies, Claytor said, because competing forms of transportation have large “hidden subsidies,” including highway construction funds, government-paid air traffic controllers and tax deductions for business travel.

The government actually spends more--about $42--for each airline passenger than its $34-a-passenger Amtrak subsidy, he said.

Claytor defended Amtrak’s financial performance, saying that the federal government’s share of its budget has been going down for several years. The federal government supplied 44% of Amtrak’s $1.4-billion operating budget in fiscal 1984 and is expected to supply 42% in 1985.

Claytor has told Congress that he will accept a freeze on the subsidy at its 1985 level of $684 million.