[Questions Relating to Payment of Labor Protection Costs]

In response to a congressional request, GAO answered six questions relating to the payment of labor protection costs in the event that the services of the National Railroad Passenger Corporation (AMTRAK) are terminated or reduced as a result of the administration's proposal to eliminate federal subsidies. The questions concerned: (1) the government's liability for labor protection payments in the event of rail passenger service discontinuance; (2) AMTRAK liability; (3) liability on either part for systemwide rather than partial service discontinuance; (4) how AMTRAK would pay for costs if it were liable and received no federal subsidies; (5) whether AMTRAK and its employees could revise existing labor protection agreements without legislation; and (6) in case of bankruptcy, whether the court could revise the existing arrangements without legislation. GAO stated that: (1) the government is not legally liable to pay labor costs resulting from the partial or total discontinuance of railroad passenger service; (2) AMTRAK would be legally liable for labor costs whether the service discontinuance was partial or total; (3) AMTRAK would be unable to satisfy labor costs resulting from even a partial discontinuance because without federal funding it cannot operate and would fall into bankruptcy; (4) AMTRAK and its employees could not agree on revisions to existing labor protection arrangements without legislation because AMTRAK is not a party to the Basic Agreement contract with the railroads which governs the labor costs; and (5) because bankruptcy is a specialized form of litigation and remedies are dependent on the particular facts and circumstances of each case, it is inadvisable to speculate on the court's proceedings.