The President said he has acquired "political capital" and "plans to spend it." However, that political capital is not unlimited. He will spend it where he thinks he will have the greatest ROI.
Killing Amtrak only appeals to the budget hawks, and he has shown what he thinks of them. His real base these days seems to lie with the religious right - folks who care more about abortion and gay marriage than whether they can see a doctor.
In short, there is little political upside to killing Amtrak. He may get a $900 million appropriation but then have to backtrack when Amtrak faces its next cash crisis, i.e. support a supplemental appropriation.
Privatization appeals conceptually to the neo-cons, but there has to be a market, i.e. viable competitors, to support it, and right now I don't see it in the cards.
Bush's best bet is to work out some formula calling for token state contributions to supporting LD services, e.g. 80-20 formula. It's too late to incorporate it for FY 2005, but look for something to develop for FY 2006 or FY 2007.