Your editorial, "Give Amtrak Away," (JofC, March 4) correctly identifies our association as one of the "principal constituencies" opposing administration

plans for Amtrak. We do not share your apparent enthusiasm for Heritage Foundation's plan to give the Northeast Corridor to Amtrak's workers, management, and frequent riders.

W. Graham Claytor Jr. regularly gets lavish praise for his work as Amtrak's president. At a March 5 subcommittee hearing, Federal Railroad Administrator John H. Riley reacted to bipartisan praise for Mr. Claytor by saying "I want to echo in spades everything that's been said about Graham. He's done a marvelous job." This isn't surprising: under Mr. Claytor, two key measures - revenues-to-costs ratio and passenger-miles handled - have steadily improved.If a competent Amtrak manager needs a $600 million/year subsidy - and if spending for highway competition exceeds user payments by over $13 billion/ year - claims that we can save much Amtrak service while reducing or eliminating the subsidy must be viewed with skepticism.

The Heritage report is filled with inconsistencies and factual errors. To boost false optimism that the NEC can become profitable, Heritage cites a widely-discredited rail fan magazine article projecting $100 million/year savings through such forms of economic suicide as discontinuing the Metroliners - the Amtrak trains with by far the highest yields (revenues-a- passenger-mile).

Heritage says "private owners could experiment . . . by raising fares slightly for business travelers, while offering discount fares to" many others, but Amtrak already does this! That is why yields on the business- oriented Metroliners are almost double the "conventional" NEC trains' yields.

Heritage admits "there is no guarantee that a privatized rail system will survive in the competitive marketplace" yet proposes requiring a new ''Northeast Railroad" to "maintain a minimum of 80 percent of existing NEC passenger miles for a 20-year period." If the new company's purpose is to

cut subsidy costs by $250 million/year, who will pay for keeping the 20-year promise?

Instead of forming another bureaucracy to do what Amtrak already does well, those concerned about balanced transportation and deficit reduction should urge Congress to legislate the real cost-savings Mr. Claytor cited at the March 5 hearing:

* Switch from Railroad Retirement to a Social Security/company pension fund combination, saving over $20 million/year while maintaining existing benefits and reducing the employees' payroll tax burden.

* Switch from Railroad Unemployment Insurance Act to state-sponsored unemployment benefit programs, saving over $10 million/year.

* Transfer handling of employee on-the-job injury claims from Federal Employers' Liability Act to state workers' compensation commissions. GAO- estimated savings: between $3 and $17 million/year. (Mr. Riley endorsed this, noting that FELA is "one of the last major insurance programs that

hasn't shifted to no-fault; 25 percent of awards go to lawyers, and there is a tremendous disincentive to immediate rehabilitation.")

If these changes work at Amtrak, they could be extended to all railroads,

helping them control costs and survive growing truck competition, something that your readers in particular should appreciate.

Ross Capon, Executive Director National Association of Railroad Passengers Washington, D.C.

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