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Jun
2021
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House transportation bill a loser for consumers

The House Transportation & Infrastructure Committee has just marked up a five-year surface transportation reauthorization bill known as the INVEST in America Act. The behemoth package remains separate from the Biden administration’s efforts to pass an “infrastructure and jobs” plan and is a marked separation from the bipartisan highway bill recently passed through the Senate Environment and Public Works Committee.

Even if it stands no real chance in the Senate as currently written, American consumers and small businesses should understand how problematic it is. This is particularly true when considering the need to help the economy recover. And nowhere is it perhaps clearer than in how the bill treats privately-owned freight railroads, which ironically need nothing out of the legislation.

As the American Consumer Institute has documented over the years, rail is critically important to the U.S. economy in ways that few realize. Thanks to smart, bipartisan regulatory reform that largely ridded the sector of rate regulation some 40 years ago, consumers today enjoy some $10 billion in annual savings. In short, less regulation worked for consumers.

Unlike the bevy of highway or transit advocates, railroads do not need federal handouts, while trucking relies on government-built highways and bridges.

Yet the House majority, apparently perturbed by the fact that railroads are solvent and have three times higher productivity than in the past, has gone out of its way to placate narrow lobbying interests. As the largest rail labor union recently proclaimed in celebrating the fact that Congress seeks to adopt their agenda in full: “The representatives also heard our voices regarding almost every one of the concerns we have about the current state of the railroad industry — crew size, train length, the utility of Positive Train Control and safety investigations — to name a few.”

A long list indeed.

While the world is moving to autonomous vehicles, perhaps most troubling is the continued effort to lock in the current operating practice of two individuals sitting inside a locomotive cab forever into the future. While it is tempting to assume that two-person crews are automatically safer than one-person crews, there’s absolutely no empirical evidence to support this.

In May 2019, the Federal Railroad Administration, the national safety regulator for railroads, definitively decided that regulation is not needed in this area. The FRA concluded that it would only chill investment and innovation, even if labor union leaders worried more about their leadership posts than their members who vocally pushed for a federal mandate. The previous administration said itself in 2016, that it “…cannot provide reliable or conclusive statistical data to suggest whether one-person crew operations are generally safer or less safe than multiple-person crew operations.”

Rather than enhance safety, mandating two-person crews could make rail operations more dangerous by crippling railroads’ ability to control costs and fund equipment upgrades. “A law or regulation that permanently requires a minimum crew size of two — especially where there is no evidence that one-person crews are less safe — can only stand in