Amtrak 6 Year Severance Repealed
Bill Gives Amtrak $2.3 Billion Refund of Taxes Never Paid

Washington (3 December): The United States Congress passed the Amtrak Reform and Accountability Act on November 13, 1997, which would discontinue the extraordinary 6-year severance payment available to laid off employees. This provision has been widely criticized for providing Amtrak employees government financed privileges that extend far beyond that available to other employees, who also have paid for the Amtrak severance program through their taxes. The six year severance program will end in 180 days, with future severance programs subject to collective bargaining between Amtrak and its trade unions.

The bill also provides that Amtrak can being to competitively tender (competitively contract) for services beginning in 2000.

The bill was signed into law by President Clinton on December 2, 1997.

$2.3 billion in refunds of taxes never paid by Amtrak will also be provided under the law. This provision had been included in the balanced budget agreement between the United States Congress and the President. When it was originally approved, Arizona Senator John McCain remarked:

"How we can give a corporate tax refund to a quasi-governmental corporation that has NEVER paid federal corporate income taxes defies imagination. It's too bad the American taxpayers aren't so favorably treated. I think every taxpayer would like the chance to receive a tax refund they aren't legally owed. Of all the charades I have seen over the years, this Amtrak "special" tax provision takes the cake.

"I want the public to be aware, this bill contains $2.3 billion for Amtrak to be doled out over two years, not subject to appropriation or congressional oversight. This is the same outfit that has drained $20 billion from the federal treasury to serve a small percentage of commuters in the northeast.

"This windfall would be accomplished through a far fetched tax scheme that will give Amtrak tax credits for the operating losses incurred by freight railroads. The provision instructs the Internal Revenue Service to sift back through the tax returns of the freight railroads and determine the losses they incurred from their passenger service from 1917 to 1971, before Amtrak ever existed. Those losses, which no one can quantify today, will then be provided to Amtrak in the form of $2.3 billion in tax credits.

"... give me a break. Are we supposed to be fooled by this? If we're going to permit a giveaway to Amtrak let's just be straight with the American people. Let's not insult them with this bogus charade. It's a mockery of our tax policy and an insult to the public."