COVID-19 Rescue Package Signed: What’s in Store for Transit and Amtrak

Written by David Peter Alan, Contributing Editor

Let’s take a closer look at the increases in relief for transit and Amtrak; consider how they will affect service; and examine what transit, Amtrak and their riders can expect in the near future.

It has now been a full year since the COVID-19 virus began to ravage the United States, along with everywhere else in the world. More than a half-million of us have already succumbed to its wrath, and schools, businesses, restaurants and entertainment venues shut down. Ridership on Amtrak and transit declined drastically, exacerbating those agencies’ financial woes. Things are beginning to look up, though, as many Americans now play a computer-driven lottery to get appointments for the elusive shots. When I last reported to you on the subject, the COVID Rescue Plan was making its way through Congress. The Senate passed it, and there were changes. The House ratified the changes, and President Biden has signed the bill into law.

Molly Nagle of ABC News reported: “While Biden had long hoped to pass the bill with bipartisan support, not a single Republican in the House or the Senate voted in favor of the legislation.” She continued: “Despite the party-line vote, the rescue plan has wide support with the American people. A Pew Research poll found that 70% of Americans say they favor the legislation, with 41% of Republicans also saying they support the package.” 

So it appears that Republican members of both houses rejected the package unanimously, despite substantial support from grassroots Republicans and strong support from the public generally. That partisan stance could bring bad news to many transit riders as the 117th Congress continues through this year and next.

As Railway Age reported, the final deal was better for Amtrak and for some transit providers than the original. The transit share was increased by $500 million (less than 2%), while Amtrak’s was increased by $200 million (more than 13%). Because both Amtrak and transit providers are in the public sector, politics always plays a role in funding decisions, and this bill is no exception. Let’s take a closer look at final law, and what has changed, and at what’s next for service.

Transit Funding (and the Politics Behind It)

On the transit site, §5311 grants have been increased from $281 million to $317 million ($36 million or 12.8%), and the pot for Capital Investment Grants under §5309 has increased from $125 billion to $1.675 billion; up by $475 million or 34%. 

Section 5311 is unlike other transit grant provisions because it is restricted to small systems, primarily in rural areas. Grant recipients are community transportation providers who run a few scheduled bus routes or demand-response operations providing limited service. These services are designed for non-motorists, who would otherwise have no way to get to medical appointments, to downtown areas or malls for shopping, or to senior centers for lunch.

In short, the final beneficiaries of these grants, beyond the providers, are people who have very little mobility and need every bit they can get. Even at that, community transportation only operates during limited hours and usually to a limited number of places. Riders on these small systems do not have money or political clout, but their representatives in Congress do. If the additional grants for these providers were designed to lure Republicans to vote for the package, that strategy did not work. If the object was to shore up the support from “blue dog” Democrats like Sen. Jon Tester from Montana or Sen. Joe Manchin from West Virginia, it may have succeeded in saving other provisions of the bill. 

Manchin, in particular, is a fiscal conservative. His was the strongest voice of any Democrat against raising the national minimum wage, eventually to $15 per hour. Seven other Democrats in the Senate went along with him, so the minimum wage (for workers in states that do not have their own minimum wage statutes) remains only $7.25. In addition, Manchin single-handedly kept the weekly unemployment benefit at $300 (other Democrats wanted to raise it to $400), and it will end earlier than other Democrats wanted. Could an extra $36 million for small transit systems, like many in West Virginia and similar states, have sweetened the deal enough to keep him in the fold about transit grants for larger systems in bigger cities? We will never know for sure, but it’s a plausible conjecture.

The other transit provision added $425 million to the pot for Capacity Investment Grants under §5309. Most of those grants have gone or will go to providers in states whose voter base leans heavily toward the Democrats, or to a city where the Democrats are strong, even in a Republican state (such as Kansas City, Mo., or northwestern Indiana for the South Shore Line, a commuter railroad to Chicago). At this writing, the Federal Transit Administration (FTA) has not commented on the increase, so it may be “appropriations as usual.” Still, any increase in grants for transit helps the providers, most of whom are financially strapped at the moment. Because these are capital grants that are not directed toward operations, it is unclear how much the riders of any specific transit agency will benefit, though it will likely be indirect. 

President Biden considered this bill to be one of the most important victories of his new Administration. It may be one of his few. That bill used the budget reconciliation process, which meant that it could pass on a simple majority vote in the Senate. Democrats hold a thin majority in the House; a mere handful of seats. Because two Democrats from Georgia were elected to the Senate, the count is 50-50, with Vice President Kamala Harris holding the authority to break a tie in her capacity as President of the Senate. She has already done that. Somehow, a single Republican missed the vote, so it passed by 50-49. That will probably not happen again, since the threat of a Republican filibuster on essentially all other bills places the bar at 60 votes in the Senate to pass “ordinary” legislation. That means ten Republicans must go along with all the Democrats. That is extremely unlikely to happen with transit, since most of it is concentrated in the “blue” states of the Northeast, the West Coast, and a few other places like Illinois.

So what can transit expect for the rest of this Congressional session, and how would it affect riders? Transit providers are relieved because they need the money. Ridership and revenue have plummeted during the past year, and both are just beginning to recover in some places. Even with some riders coming back, numbers are still low and deficits are mounting. The New York MTA is doing its best to keep up a respectable level of service in New York City, while angry commuters forced the Long Island Rail Road to restore trains that it had cut earlier this month. Across the “Hudson Ocean,” as advocate Albert L. Papp calls it, New Jersey Transit is running essentially its full pre-COVID schedule, even though there are still few commuters into New York’s Penn Station for the traditional start of the workday. So, for the most part at least, every transit provider has had different experiences with the effects of the virus. There is no “one size fits all” strategy that will succeed in solving the providers’ problems.

Industry Response

Despite whatever pitfalls may come later, transit providers praised the package. They had no choice. The Washington Area Metropolitan Transit Authority (Metro) said in a statement: “Metro expects to avert service cuts and layoffs that had been proposed in its FY22 budget thanks to new federal relief approved by Congress today.”

The statement quoted Metro Board of Directors Chair Paul C. Smedberg: “Congress has once again stepped up to address the needs of Metro and the regional transit systems that will be critical to our region’s economic recovery. While it will take more time to work out all the details, including Metro’s exact share of this funding, the $1.4 billion provided by the American Recovery Plan for our region’s transit agencies will allow us to avert the painful service reductions and layoffs that were on the table.” Metro must adopt a balanced budget for the next fiscal year by June 30. 

On the West Coast, Bay Area Rapid Transit (BART in the San Francisco Bay area) released this statement: “BART is grateful that Congress continues to prioritize transit. This new relief helps us balance our budget without layoffs and drastic service cuts. It means we can remain nimble and responsive to changing travel patterns.”

Metro and BART have had similar experiences, having started about 50 years ago, providing dense local service in the urban core and having lines that stretch to the suburbs, and slashing service since the virus hit last year. Neither statement said anything about restoring service that had been lost. Both emphasized balancing the budget and averting painful service cuts. What neither statement said was that future cuts would exacerbate the ones that have been made already. Nobody had to say that. Still, given the political process and the difficulty in securing ten Republican Senators to vote with the Democrats on anything, this may be the only COVID-19 relief package that the Biden Administration and Congressional Democrats can deliver in light of solid Republican refusal to vote for the relief plan.

Also delivering praise for the package was the Metropolitan Atlanta Rapid Transit Authority (MARTA). In a statement, MARTA said that “while the Atlanta-Region Transit Link Authority (ATL) will divvy up the money for metro Atlanta transit agencies, using the math intended in the plan, MARTA can expect approximately $284 million in emergency funding.”

As part of the statement, MARTA General Manager and CEO Jeffrey Parker said: “MARTA appreciates the federal government’s recognition that transit is an integral part of the post-pandemic economic recovery of this country. This funding helps in our continued preparation for the anticipated return of customers as vaccine distribution widens and life returns to pre-pandemic levels of activity. In the coming weeks, I will share more details about how this funding will be of great benefit to our customers, our essential employees, and the greater regional economic health.”

At the American Public Transportation Association, President and CEO Paul P. Skoutelas released this statement: “Given the urgent and immense needs of our industry, the American Public Transportation Association applauds enactment of the American Rescue Plan Act of 2021. The $30.5 billion in emergency assistance demonstrates a clear and continued commitment to public transportation and the important role it plays in America’s economic recovery.”

And Nicole Brewin, Senior Vice President of Government and Public Affairs of the Railway Supply Institute (RSI), issued these remarks: “This passage of this legislation was a critical step for railway suppliers and their customers, and we applaud leaders in the House, Senate, and Biden Administration for their work in crafting and advancing this important bill.”

She noted the “much-needed funds [for public transit and Amtrak] will help ensure that our customers can continue to serve riders and communities across the nation, and by extension the hundreds of railway suppliers who support those operations. RSI also commends Congress for ensuring that key programs such as the Paycheck Protection Program were funded in this package, which has provided an important lifeline to many small and mid-sized businesses in the railway supply industry during this pandemic. As the nation begins to recover, we look forward to working with Congress and the Administration in the coming months to make critical investments in our rail infrastructure that will help fuel job creation and economic growth for the country.”

Amtrak Funding

The last-minute changes before the law’s passage benefited Amtrak more than local transit. Of the $200 million increase in the Amtrak appropriation, $150 million will go toward grants for the Northeast Corridor (NEC) and the other $50 million will augment the pot for grants for the National Network. It is reasonable to expect that the large increase for the NEC reflects the new authority that Senate Majority Leader Chuck Schumer of New York now has. Schumer has been pushing Gateway projects like new tunnels under the “Hudson Ocean” and the proposed high-level Portal North Bridge to replace a lower-level one, and longer-range projects like NEC Future. The entire political establishment in the region supports the Gateway program, although some advocates and commentators (including this writer) have questioned the need and cost-effectiveness of those projects, especially now, since “peak-hour” commuter ridership has declined substantially and will probably not return to pre-COVID levels. Can Schumer force projects like these through? Time will tell, but it looks like he is off to a good start at it.

The big news about Amtrak is that most of the long-distance trains will be restored to daily operation in late May or early June (the statute requires that they come back within 90 days, and the clock has just begun to run). Amtrak has announced its plans to restore daily service within the time limit. What we don’t know is just how long Congress will come up with enough money for Amtrak to keep the trains running every day after the current fiscal year ends on September 30. At this writing, Amtrak is not planning to cut service again; everyone concerned seems to hope that such cuts will not happen again. 

This writer has made suggestions for Congress to fund Amtrak at an appropriate level, and to require reforms such as transparency and an accounting system that would yield reliable and valid numbers, so everyone concerned would know enough about Amtrak’s financial picture to review the railroad’s performance. These recommendations are included in a continuing series, “Farewell, Long-Distance Trains?” Now that the immediate crisis has passed (at least for now), I will soon conclude the series with a look at the future and what should be done to keep the trains running every day, and perhaps expand the national network some day. 

One of the keys is that there may be enough Republican support in the Senate that a stand-alone bill about Amtrak could pass, as long as all Democrats support it (as they almost always have). There are no corridors and only a few state-supported trains in Republican-dominated states. If the proposed service between New Orleans and Mobile gets started, it would be the first multi-state corridor serving several “red” states. So people who ride Amtrak and live in Republican-dominated states have only the few long-distance trains to ride. Republicans in Congress have constituents who use those trains, so they have reason to join the Democrats across the aisle to keep Amtrak going—at least some of them do.

The past year has been one of the worst in history, both for Amtrak and for transit. Things are starting to look up for the country generally, as more doses of vaccine find their way into people’s arms. At this writing, it is unclear how much they will look up for Amtrak and transit. It might be possible to get 60 Senators to agree on a stand-alone bill for Amtrak funding and reforms. Funding for transit could be more difficult in the future—especially getting federal operating assistance for transit. That has been part of the three COVID-19 relief bills, but as a special emergency measure due to the virus. Would Congress agree to make it permanent? As things stand now, that appears to be a very tall order. 

So most transit agencies and riders alike will probably be in for a rough ride during the next few years. Some will ride the emergency out better than others, but, against this backdrop, more non-motorists are coming onto the scene because of age, disability, or not having enough money to keep an automobile. How everybody concerned will fare is problematic, but there seems to be general agreement that it could have been much worse if certain parts of the election last November had gone the other way.

David Peter Alan is one of America’s most experienced transit users and advocates, having ridden every rail transit line in the U.S., and most Canadian systems. He has also ridden the entire Amtrak network and most of the routes on VIA Rail. His advocacy on the national scene focuses on the Rail Users’ Network (RUN), where he has been a Board member since 2005. Locally in New Jersey, he served as Chair of the Lackawanna Coalition for 21 years, and remains a member. He is also a member of NJ Transit’s Senior Citizens and Disabled Residents Transportation Advisory Committee (SCDRTAC). When not writing or traveling, he practices law in the fields of Intellectual Property (Patents, Trademarks and Copyright) and business law. The opinions expressed here are his own.

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