Draft Reauthorization bill (TRAIN act) release by House Transportation and Infrastructure Committeee

[user 14106]

Link to information about the draft reauthorization bill. Some key items in this draft bill:

Summary of some key points in there:
- Higher authorized funding levels over the next five years due to COVID 19 effects.
- OTP related provisions to help enforce Amtrak preference.
- Adjusts language that requires Amtrak to operate as a "for profit" company.
- Bans Amtrak's mandatory arbitration setup.
- Reforms Amtrak's board of directions.
- Various food service provisions including eliminating the Mica rule and requiring Amtrak to offer hot meal services to coach passengers on long distance trains.
- Bans Amtrak form outsourcing food and beverage on board staffing.
- Bans Amtrak from outsourcing call center to third parties as well as requirements for Amtrak to have a ticket agent at each station that had more than 40 boardings/deboardings per day in FY19 - a little bit vague on this but I would assume they would have to clarify how this would work as certain cities/regions with multiple stations probably dont need to staff the more minor stations. (For example - are stations that were never staffed and don't have a station building subject to this or is this just meant to require Amtrak to maintain current staffing.)

Read for full details:

https://railpassengers.org/happenin...jI0sDOIn1Do1GTQ6oK2NJqN3Wb0nVxPtYUk1EorUOWiJE

 

[Green Maned Lion]

Dead on arrival

 

[dlagrua]

I believe that this bill will be posted and pass both houses. In the turmoil that our country is experiencing right now, I cannot envision any politician voting against a bill that will help the American people.

 

[Eric S]

Let's see. The House passed another coronavirus relief package a couple weeks ago and it essentially died in the Senate. Even if this were to pass the House, which is far from a sure thing, there is just about no chance this would pass the Senate.

 

[tricia]

I believe that this bill will be posted and pass both houses. In the turmoil that our country is experiencing right now, I cannot envision any politician voting against a bill that will help the American people.

Bless you. I wish I had a pair of whatever glasses you've got on when you "envision" this.

 

[Ziv]

One can hope it gets passed in all the confusion of the moment...

 

[Devil's Advocate]

I believe that this bill will be posted and pass both houses. In the turmoil that our country is experiencing right now, I cannot envision any politician voting against a bill that will help the American people.

In the eyes of many politicians there are two types of American people. One group is sacred and enjoys the full backing and support of the American government while the other is mostly sacrificial and is only helped enough to maintain a charade of false motives and empty promises. If you doubt this take a good look at how the Main Street economy has fared compared to the Wall Street economy. Whatever connection these two groups once shared appears to be completely severed at this point.

 

[user 14106]

Eventually they have to do some re authorization. I would suspect some of this has a fairly good chance of making it through. I would expect the most contentious portions of this to be the increased funding (and the most likely to get tweaked down.) But I think there's a good chance some of this non money policy related stuff has a shot making it through - particularly the getting rid of the arbitration policy and the station agent and call center provisions as there seems to be congressional support for those things. Remember though that this is just authorized funding levels. Money has to be appropriated each year in the appropriations process (which is the actual amount of money you get.) Even the money may have a shot with the need for economic stimulus - keeping Amtrak employees on the job, and some of the projects and new equipment purchases also means jobs.

 

[Green Maned Lion]

For money to be appropriated, it must exist. This is going to be something of a problem in the near future.

 

[sttom]

The government just prints the money as needed. When Wall Street needs $4 Trillion to calm down, it just magically appears. I think we can swing a few billion.

 

[Green Maned Lion]

What I can say to that is that I wish economic policy was as simple as you seem to think it is. The money doesn't magically appear; it needs to be borrowed or printed, and either way it needs to be created; the debt is real and either needs to be paid through borrowing or by devaluing the currency of the United States. Its not actually "free".

 

[sttom]

I didn't say it was "free" just that any theoretical limit to spending isn't going to be broken by $20 billion for real infrastructure when we routinely flush trillions down the drain just to keep numbers on a spreadsheet in the green. We've been going down the road of austerity for us for what, nearly 40 years now and limitless financial and military funding for the same amount of time and its never broken the bank. Our infrastructure is crumbling, but the financial system keeps churning.

 

[Green Maned Lion]

I am not being paid the big bucks that an economics professor is paid to explain to you where you are mistaken.

Money can only be created in a vacuum to a certain extent; when we are talking about $20 billion (~$60 a person, or 0.05% of the average taxpayers tax bill), yeah, that can just be pulled out of Ben Franklin's tuchus. But when we drop $3-4 trillion ($10,606 per person, or 96.4% of the average taxbill) at what is frankly the beginning of this mess, that is a different story altogether.

When you pull an entire tax years worth of tax revenue, and pile it on to the nation debt, that amount of money WILL be felt in the economy, the markets, and our currency balance. And remember, I said this is the beginning of this mess; we aren't close to being over. Keep in mind that while spending has increased an extra years worth, tax revenue is actually going to fall, likely very substantially- especially next year when that taxable $600/wk payments drop out.

The most optimistic dates I've heard for vaccine roll-outs is 8 months from now; it will probably be even longer, if it is even possible. That means a minimum of 8 months before the virus stops putting direct pressure on our economy; 8 months of needing to make up for that pressure. Once that is done, things can settle down, and we can start the long road back to an economy actually producing the income numbers required to give you the ~$11000 tax revenue per tax bill. I've heard various estimates; a consensus seems to be about 10 years to reach that point.

I know it seems like the money just falls out of the sky, but it doesn't. You can't just print your way out of this mess; I wish it were that easy, but it isn't, especially when much of our economy depends upon what foreigners value the US dollar at.

 

[Devil's Advocate]

If your country is home to the world's largest economy, and your financial system is based on the world's foremost reserve currency, and you control a central bank willing to bend to your demands, and you enjoy the longest list of bilateral entitlements, and you possess or control enough natural resources for a plausible path to self-sufficiency, then in some sense you can print your way out of almost anything. The problem is that even buying the cheapest debt on the planet will eventually overwhelm your ability to reliably service it and then what? If any of these legs gives out the house of cards comes falling down.

 

[nullptr]

I am not being paid the big bucks that an economics professor is paid to explain to you where you are mistaken.

Money can only be created in a vacuum to a certain extent; when we are talking about $20 billion (~$60 a person, or 0.05% of the average taxpayers tax bill), yeah, that can just be pulled out of Ben Franklin's tuchus. But when we drop $3-4 trillion ($10,606 per person, or 96.4% of the average taxbill) at what is frankly the beginning of this mess, that is a different story altogether.

When you pull an entire tax years worth of tax revenue, and pile it on to the nation debt, that amount of money WILL be felt in the economy, the markets, and our currency balance. And remember, I said this is the beginning of this mess; we aren't close to being over. Keep in mind that while spending has increased an extra years worth, tax revenue is actually going to fall, likely very substantially- especially next year when that taxable $600/wk payments drop out.

The most optimistic dates I've heard for vaccine roll-outs is 8 months from now; it will probably be even longer, if it is even possible. That means a minimum of 8 months before the virus stops putting direct pressure on our economy; 8 months of needing to make up for that pressure. Once that is done, things can settle down, and we can start the long road back to an economy actually producing the income numbers required to give you the ~$11000 tax revenue per tax bill. I've heard various estimates; a consensus seems to be about 10 years to reach that point.

I know it seems like the money just falls out of the sky, but it doesn't. You can't just print your way out of this mess; I wish it were that easy, but it isn't, especially when much of our economy depends upon what foreigners value the US dollar at.

This is probably getting off-topic, but as a counterpoint, interest rates for treasury bonds are at historic lows right now, so it's pretty cheap for the federal government to borrow. As a fraction of gdp, the size of the government interest payments isn't at historic highs: Federal Outlays: Interest as Percent of Gross Domestic Product

On top of that, you seem to vaguely be alluding to inflation, which doesn't seem to be a problem right now or in the immediate future, and in any case, would make paying the debt easier.

But again, this is all just to provide counterpoints. We probably shouldn't spend recklessly, but I am also not sure we are yet.

 

[John Bredin]

On top of that, you seem to vaguely be alluding to inflation, which doesn't seem to be a problem right now or in the immediate future, and in any case, would make paying the debt easier.

There are times that inflation is a real problem, like water in a house that causes gradual rotting and mold. However, to worry about inflation when there's a massive deflation (aka recession bordering on depression) is like opposing spraying water on a burning house out of fear of water damage.

 

[Green Maned Lion]

You can't borrow money by printing a treasury bond and setting an interest rate, and calling it a day. In order to actually borrow that money, somebody has to give you it in exchange for the authorized bond. I can assure you the last place I would put my money is in a US Treasury bond at the current interest rates; Why the devil would I want bonds from a moribund economy in a downturn at a weak interest rate?

Secondly, what in goodness's name makes you think inflation is low, besides the ether telling you so? From my personal observation of the price of things, inflation is certainly extent, more so than I recall in my adult life.

 

[Green Maned Lion]

There are times that inflation is a real problem, like water in a house that causes gradual rotting and mold. However, to worry about inflation when there's a massive deflation (aka recession bordering on depression) is like opposing spraying water on a burning house out of fear of water damage.

In this circumstance, it would be like having a burning house that we're worried about water damage because a dam just burst and a tsunami is bearing down upon it. It doesn't really matter which one destroys it first.

 

[John Bredin]

Because inflation plus recession (that bugaboo of the 1970s, stagflation) results from a supply-side shock, for which more inflation would be like pouring gasoline instead of water on a fire. On the other hand, coronavirus and the resulting stay-at-home/social distancing orders created a classic demand-side shock, for which inflationary measures are the usual prescription.

 

[Dakota 400]

I am hopeful that Congress will pass such a Bill as this. It will be "tweaked" by members of both Houses. Little comes out of a legislative committee at the Federal or State level that is totally accepted.

There are times when debt is good. There are times when debt is bad. Considering the history of the Great Depression, in order to avoid the Great Depression II, it's time for debt.

 

[John Bredin]

The idea that we're in an inflation when millions are out of work is fairly absurd. Also, perception of inflation vs. reality is a tricky thing. Lots of material on that point.

 

[nullptr]

You can't borrow money by printing a treasury bond and setting an interest rate, and calling it a day. In order to actually borrow that money, somebody has to give you it in exchange for the authorized bond. I can assure you the last place I would put my money is in a US Treasury bond at the current interest rates; Why the devil would I want bonds from a moribund economy in a downturn at a weak interest rate?

Secondly, what in goodness's name makes you think inflation is low, besides the ether telling you so? From my personal observation of the price of things, inflation is certainly extent, more so than I recall in my adult life.

You seem to be part of the small minority not interested in owning treasury bonds. If people weren't interested the yield would be higher...

 

[sttom]

What the government spends money on also matters. Spending on infrastructure increases our productive capacity, giving hedge fund managers money to stop hyperventilating doesn't do that. As for where does the money come from, we have a free floating fiat currency, we just pay for things. The government controls the money supply through the Fed. Money isn't some commodity that is separate from the government, it is a tool of the government.

Inflation isn't just determined by how much money is floating around, supply and demand for goods and services also matter. Increasing our collective productivity is worth the debt. Right now, we are dealing with increased demand for certain goods, so prices are rising to deal with shortages and in some cases, supply has contracted. Like frozen french fries for example. They've been pretty well cleaned out of stores and food processing plants can't keep up, so prices are going to increase. Also since people can't go out and work certain jobs, the supply of produce is also contracting slightly, ergo more increase prices. None of this has anything to do with the Fed doing more quantitative easing to keep the hedge funds from freaking out. Gas prices are also crashing because people aren't travelling.

Japan is also an example of having a high debt to GDP ratio. Their debt to GDP ratio is over 200% and they have faced deflation over the years due to there being less demand aggregate. But no one in the high halls of finance think Japan is going to crash and burn. Or isn't worth doing business with. I'm not, nor will I ever say Congress is 100% responsible with setting national priorities, but spending on education, infrastructure and research isn't going to been seen as irresponsible compared to trillions in quantitative easing, bailing out irresponsible companies or continuing to fund the atrocity that is our defense budget. And quite frankly, if a few percent more inflation is the price of not living through a Second Depression (which the Great Recession shows wasn't the case, inflation was relatively low) I can live with that. And I if I make it to average life expectancy, I will have 50 years to live with it.

 

[user 14106]

As we all know Amtrak is also not the only portion of this bill. I would imagine this bill also deals with re authorizations for all the transit oriented programs. Another provision I left out in my earlier summary is provisions for federal support in lieu of state payments to assist states with their budget woes during the pandemic.

 

[willem]

Money can only be created in a vacuum to a certain extent; when we are talking about $20 billion (~$60 a person, or 0.05% of the average taxpayers tax bill), yeah, that can just be pulled out of Ben Franklin's tuchus. But when we drop $3-4 trillion ($10,606 per person, or 96.4% of the average taxbill) at what is frankly the beginning of this mess, that is a different story altogether.

I'm confused about what those percentages of the average taxpayer's bill mean. Could you walk me through it?

I'm getting stuck on the difference between 60/0.05% and 10606/96.4%, which I thought should be the same number. What am I misunderstanding?