On March 13, DOT Inspector General Kenneth M. Mead testified before the House Appropriations Committee Transportation and Treasury Subcommittee.

In his lengthy testimony, Mead informed lawmakers that Amtrak would likely face another financial crisis later this year. While Amtrak received its grant request of close to $1.2 billion in FY 2003, Mead alerted the subcommittee, "lower-than-predicted revenues for the first 4 months of FY 2003 combined with more aggressive budget targets in the second half of the year means that Amtrak faces a significant challenge to avoid another cash crisis similar to the one experienced last summer."

Mead did however offer much praise for Amtrak President and CEO David Gunn. While lauding some of Gunn's initiatives aimed at improving efficiency and transparency, the inspector general warned that Amtrak's financial projections would not be realized in FY 2003. In addition, Mead told subcommittee members that the FY 2004 budget request of $1.812 billion would fall short of meeting Amtrak's short-term needs. Mead exhorted lawmakers that Amtrak's FY 2004 budget request is based on two contingencies: productivity enhancements from work rules changes and $206 million in additional savings from actions as yet undefined. According to Mead, it is unclear at this moment what kind of concessions Amtrak will receive from labor in contract negotiations. Finally, Mead attempted to disprove the myth that cutting long-distance routes will save Amtrak significant money in the short-term: "because of labor severance payments and other shutdown costs, it is unlikely there would be any short-term savings."

The DOT Inspector General sees FY 2003 as another difficult year for Amtrak, which has already lost $73 million more in the first 4 months of FY 2003 than in the first 4 months of the prior fiscal year. Mead also mentioned the substantial growth in debt over the past 5 years and the continued deferment of track maintenance and equipment repairs as additional burdens for Amtrak in the coming year.

New regulations enacted in the FY 2003 omnibus appropriations law require DOT to oversee the finances of the embattled rail corporation. Also, Amtrak must now apply to DOT for grants that would cover operating losses for long distance routes. Finally, by May 1, Amtrak must submit to Congress a business plan, which details how operating and capital costs will be funded in FY 2003.

After admonishing legislators that an Amtrak crisis would likely occur later in the year, Mead advised Congress to "get on with the reauthorization process".