August 1, 1978
Page 23616
Mr. MUSKIE. Mr. President, the Senate now has before it S. 2788, the Regional Rail Reorganization Amendments of 1978. The purpose of this bill is primarily to authorize additional funding for purchase of Con Rail securities by the U.S. Railway Association. Of course, we are all disappointed, but not surprised, that additional Federal investment in Con Rail is needed. I certainly hope that this increased authorization will provide sufficient assistance to permit Con Rail to attain financial self-sufficiency as a private, for-profit corporation.
I would like to say a few words about the potential impact of this bill on the Federal budget for fiscal year 1979. The first budget resolution approved by the Congress assumes a need for additional support for Con Rail; as was recommended by the Commerce Committee in its March 15 report to the Budget Committee. Further, the funding level contemplated by the Appropriations Committee for this bill is consistent with the target spending totals in the first budget resolution. Full funding of the new authorizations in S. 2788 would cause our budget targets for fiscal year 1979 to be exceeded, but, fortunately that is not expected.
Mr. President, Con Rail represents a unique attempt to solve a difficult problem through Federal investment in a private corporation. If this attempt succeeds, the Federal investment will be fully repaid. I continue to hope that will happen.
I commend my colleague, Senator LONG, and the Commerce Committee for their attention to this matter of repayment in the provisions of the bill which establish an employee stock ownership plan. The language of the bill as reported raised some question as to whether establishment of the ESOP would reduce Con Rail's obligation to repay the Government.
However, the amendment accepted by the distinguished floor manager clarifies that nothing in this bill relieves Con Rail of the responsibility of repaying the U.S. Railway Association and, therefore, the U.S. Treasury, its full indebtedness, meaning the indebtedness that is created when appropriated funds are used to purchase Con Rail securities. I am aware that our investment may or may not pay off: It is a risk. But the congressional budget process was established to keep an eye on the expenditures and receipts implied by the legislative actions of the Congress.
Therefore, I am grateful that the proposed statute is now clear about what is intended regarding future Federal receipts.
Mr. President, I know that all Senators are hopeful that the Federal Government will be reimbursed in full for its investment in Con Rail, and I commend Senator LONG for taking pains to keep our hopes alive.