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 the way of further reductions in accidents caused by human error,” says Patrick McLaughlin, senior research fellow at the Mercatus Center at George Mason University.

Moreover, mandating two-person crews, even though technological improvements allow for different operations, would significantly raise labor costs, limit railroads’ competitiveness against intermodal rivals, and increase shipping costs. Ultimately, many of these costs would be borne by consumers.

Ironically, this would also lead to a heavier reliance on trucks, which are several times more dangerous than rail. While certainly crucial to the economy, trucks are also much larger emitters of greenhouse gasses, which policymakers seek to reduce. Thus, crew size is also at odds with the majority’s environmental goals.

As Reason Foundation scholar Marc Scribner argued recently, “disadvantaging rail relative to trucking through a train crew-size mandate would increase the transportation sector’s emissions intensity.” Compared to trains, trucks create three times more pollution per ton, and overloading trucks can reduce the life of roads from 20 to seven years. What is the point of unnecessarily putting more trucks on the road when that will only require additional infrastructure spending?

Members of the transportation committee have much work to do on their flawed bill. A first step, across political allegiances, should be to drop this crew size effort once and for all. Brookings scholar Cliff Winston is right when he says, “Policymakers should stop trying to micromanage rail’s current operations and should help rail enter a future of autonomy.”

Despite the fact that rails kept the supply chain moving during COVID, by resinstituting rail regulations, the House’s INVEST in America Act will be needlessly hard on the recovering economy, even worse for the environment, and, by pushing up transportation costs, bad for consumers.

Citizens deserve much better from DC.

Steve Pociask is president and CEO of the American Consumer Institute, a non-profit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.