Mr. Speaker, I rise today in strong support of H. Res. 72, a resolution directing certain standing committees to inventory and review existing, pending, and proposed regulations and orders from agencies of the Federal Government,…
Mr. Speaker, I rise today in strong support of H. Res. 72, a resolution directing certain standing committees to inventory and review existing, pending, and proposed regulations and orders from agencies of the Federal Government, particularly with respect to their effect on jobs and economic growth.
While it is clear that across government there are tremendous amounts of red tape that we must cut in order to more effectively and efficiently spur job creation, I would like to focus on four specific issues under the jurisdiction of the House Transportation and Infrastructure Committee.
FMCSA Hours of Service
Proposed changes by the U.S. Department of Transportation to hours of service rules for truck drivers would have a substantially negative impact on productivity and the U.S. economy.
The rules currently in place are working well and do not need to be changed. Since the current rules were implemented seven years ago, the trucking industry's safety performance has improved at an unprecedented rate. Both the number and rate of fatal and injury accidents involving large trucks have declined by more than one-third and are now at their lowest levels in recorded history. The remarkable reduction in the number of truck-involved fatal and injury crashes occurred even as truck mileage increased by almost 10 billion miles between 2003 and 2008, the latest year for which data is available.
If the proposed changes are implemented, trucking companies will need to put additional trucks and drivers on the road to deliver the same amount of freight, adding to final product costs and increasing congestion on the nation's already clogged highways. Small business truckers would be especially hard hit.
On two prior occasions, the Federal Motor Carrier Safety Administration (FMCSA) estimated that similar changes would cost the U.S. economy $2.2 billion, inclusive of safety benefits. However, in the new proposed rule FMCSA has changed its methodology for estimating both the benefits and costs of changes to the hours of service rule, effectively decreasing estimated annual costs by $1.5 billion and increasing estimated annual benefits by $1.1 billion in order to produce a positive benefit-cost ratio. Further, the agency's own analysis shows that the net benefits of retaining the current daily driving time limit exceed the net benefits of reducing allowable driving time by one hour, the option favored by FMCSA. Frankly, it is very difficult to understand how FMCSA rationalizes its proposal on this fact alone.
In addition to encumbering the industry and a struggling economy, the proposed changes would significantly challenge law enforcement. Because the proposed rules are complex and restrictive, motor carriers could have difficulty understanding them and enforcement officers could have difficulty accurately identifying violations. For instance, in order to determine if a driver can legally claim to have met the conditions of a weekly rest provision, enforcement officials would have to ensure that at least 168 hours had elapsed since the beginning of the most recent weekly rest period, and that the break included two consecutive nighttime periods between midnight and 6 a.m. Such complexity will only serve to hamper both industry compliance and motor carrier enforcement.
Now is not the time to impose costly new regulations that would impede the nation's economic recovery and increase the cost of almost every product Americans produce and buy.
Along with my good friend, the gentleman from Missouri, Mr. Graves, I am circulating a letter on this issue to be sent to the Secretary of Transportation, Ray LaHood. I encourage all of my colleagues to join in signing on to this important letter.
Subcommittee on Railroads, Pipelines, and Hazardous Materials Issues
As the Chairman of the Subcommittee on Railroads, Pipelines, and Hazardous materials, there are three issues under my jurisdiction that I want to draw attention to--two related to railroads and another related to hazardous materials.
Put simply, the United States has the greatest freight rail network in the world. Our system is the most efficient and cost-effective in existence, and relies on virtually no subsidies from the federal government. Over a century ago, America's railroads opened the door for economic expansion, literally ushering in the great advancements in industry that sparked America's emergence as an economic power on the world stage. By linking our coasts, rail opened markets for goods and services in parts of our nation before rendered inaccessible. America's railroads revolutionized transportation, gave promise to freedom of movement and made business more efficient. That heritage continues to this day.
Today, we find ourselves in the midst of a new era of a freight rail renaissance. With 140,000 miles of track carrying almost two trillion ton-miles annually, freight rail is an immense jobs generator and a major driver of the nation's economy. In fact, the industry supports directly or indirectly over 1 million jobs, and 43 percent of all freight carried each year in the U.S. is moved by train--with demand projected to grow. In order to meet this demand, it is essential that there is continued growth in rail capacity.
Surface Transportation Board
Yet given their successes and self-reliance, the railroad industry appears to be in the crosshairs of the Surface Transportation Board (STB). The question is this: will America's railroads continue to be given the freedom necessary to grow their industry without direct interference by the federal government or will the STB attempt to move to re-regulate the industry?
Re-regulation would be a potentially catastrophic public policy that could erase 30 years of positive growth in rail, and threaten to reduce the railroads to the ruinous decreases in services and disinvestment not seen since the 1970's. I firmly believe that if the Surface Transportation Board attempts to re-regulate this vital industry, it will be only a matter of years before our once self-reliant railroads will be forced to rely on taxpayer dollars to invest in infrastructure, safety and efficiency as federal mandates mount.
The Surface Transportation Board has recently announced two hearings. One will review rail traffic exemptions while the other will assess the competitive marketplace in which the railroads operate. In connection with those hearings, we would like to express our collective view about the importance of the freight rail industry as a critical component of our nation's transportation system, and impress upon you the importance of maintaining the existing regulatory balance between the railroads and shippers.
The passage of the Staggers Act in 1980 created a balanced regulatory system that has allowed the rail industry to build the world's best freight rail system, while protecting shippers in areas where there is no effective competition. Since its passage, average inflation-adjusted rail rates measured by revenue per ton-mile are down over 50 percent and freight railroads have re-invested more than $480 billion back into their operating networks. That could not have been done--and will not be done in the future--unless the STB maintains the current regulatory balance as contemplated by the Staggers Act.
Recently I joined with my senior colleagues on the Transportation Committee, what we call the ``Big 4''--the Chairman of the full Committee, Mr. Mica, the Ranking Member of the Full Committee, Mr. Rahall, the Ranking Member of the Railroads Subcommittee, Ms. Brown, and myself, the Chairman of the Railroads Subcommittee--in sending a letter to the Chairman of the Surface Transportation Board regarding maintaining the existing regulatory balance between the railroads and shippers.
In our letter, we made it clear that any policy change made by the STB which restricts the railroads' abilities to invest, grow their networks and meet the nation's freight transportation demands will be opposed by the Transportation Committee.
Positive Train Control
Notably, these debates are occurring at a time when the rail industry is at a crossroads dealing with massive new mandates and proposals that threaten to undermine our rail renaissance. Recent unfunded mandates on the freight rail industry to retrofit equipment with Positive Train Control (PTC) equipment are expected to cost in excess of $10 billion, with limited, if any, operational benefit. This mandate will divert scarce capital from critical investments in one of the most capital- intensive businesses in the world.
The Federal Railroad Administration (FRA) issued a Final Rule in January 2010 to implement the statutory requirement in the Railroad Safety Improvement Act of 2008 to implement Positive Train Control (PTC) systems by December 31, 2015 on mainline rail tracks that carry passenger trains or hazardous materials that are toxic by inhalation.
Positive Train Control is a technology (or combination of technologies) that is designed to automatically stop or slow a train before accidents caused by human error can occur. The accidents PTC is intended to prevent include:
Train-to-train collisions;
derailments caused by excessive speed;
unauthorized incursions by trains onto sections of track where maintenance is taking place;
trains moving through track switches left in the wrong position.
A fully functional PTC system must be able to precisely determine the location and speed of trains, warn train operators of potential problems, and take action if the operator does not respond to a warning. The type of accidents that PTC systems are designed to prevent are very rare. Of all train accidents on rail
mainlines over the past seven years, only around 4 percent would have been prevented if PTC systems had been in place.
According to the FRA, freight railroads will have to spend up to $13.2 billion to install and maintain PTC systems over the next 20 years, but PTC will yield just $608 million in benefits over the same period--a cost-benefit ratio of 20 to 1.
An April 2010 study by the consulting firm Oliver Wyman found that the so-called ``business benefits'' of PTC--reducing train delays and being able to move more trains through congested sections of track--are actually very low or nonexistent. In fact, systems very similar to PTC that are currently being implemented in Europe do not support that claim that PTC will yield significant business benefits for U.S. railroads.
The manner in which FRA determined which track will be required to have PTC installed has caused a great deal of concern in the railroad industry. Many provisions of the Final Rule go well beyond the statutory requirements of the Railroad Safety Improvement Act. These provisions add hundreds of millions of dollars to costs, but will not improve safety in any meaningful way.
In the final rule, the FRA orders railroads to install PTC on rail lines that carried toxic-by-inhalation hazardous materials in 2008. Nothing in the law refers to using 2008 as the base year for determining where PTC must be installed.
As it currently stands, the Final Rule will require that approximately 70,000-80,000 miles of rail miles have PTC systems installed, about half of the total Class I railroad 160,000-mile national freight network.
The decision to use 2008 as a base year for determining which tracks require PTC implementation makes no sense, because hazardous materials routing in 2015 will be vastly different than in 2008, for the following reasons:
Significant hazardous materials rail routing changes were recently implemented in response to a Department of Transportation/Department of Homeland Security joint regulation requiring railroads to ensure that toxic-by-inhalation chemicals are transported on routes posing the least overall safety and security risk.
Additionally, marketplace dynamics are changing the transportation of hazardous materials. For example, many chemical companies are phasing out production of chlorine, or moving their production sites to where the chemical will be used, thereby dramatically changing the amounts and routes over which these toxic-by-inhalation materials are moved.
Finally, the rule does not provide for a ``de minimis'' exception, where a rail line carrying very little of these materials could be exempted from the PTC requirement. Such an exception would significantly reduce costs without compromising safety in a meaningful way.
The PTC mandate applies to all passenger railroads on the general railway system, including Amtrak and 26 different commuter railroads.
Amtrak's capital needs and operations are fully subsidized by annual appropriations. Commuter railroads also receive capital funds from the Federal Transit Administration for repair and modernization of their systems, but these federal funds represents only about 40 percent of total funds spent on their systems, which are primarily supported by local governments.
The cost of installing PTC is a significant burden for these commuter railroads. The American Public Transportation Associations estimates that installation of PTC on commuter railroads will cost more than $2 billion--these agencies are already cutting service levels or raising fares because of the recession's impact on local government budgets.
Additionally, most commuter railroads operate over freight rail-owned track. These agencies must ensure that the PTC technology they install on their commuter systems is interoperable with the systems that their host railroads put in place.
Because of issues like interoperability, there is real doubt that PTC can be successfully implemented by December 31, 2015.
There is also a severe shortage of available broadband spectrum for the wireless communications networks that are central to PTC implementation. The Federal Trade Commission has authority over allocating spectrum, and the FTC decision process is slow and cumbersome.
Instead of penalizing the rail industry for its success, Washington should be promoting new investment and expansions in service to keep America's railroads in the driver's seat of the global economy. That's why I support tax credits for the expansion and rehabilitation of the nation's rail infrastructure.
Tax credits are a proven and effective policy tool to encourage businesses to invest in worthwhile projects. Because the railroads still pay for their projects under tax credit plans, tax credits ensure that the railroads will only pursue projects that will grow their businesses, and ultimately expanding the economy. Direct grants, on the other hand, could be seen as ``free money'' that would not be subject to the same rigorous business decisions. There are two tax credit bills that I support, including a 25 percent tax credit for rail projects that expand the rail network and ease congestion, and a short line tax credit that expired at the end of last year.
America's railroads are at a crossroad. The direction the Administration pushes the rail industry will have a lasting impact on American competitiveness and economic growth. Washington must resist the urge to over-regulate an industry that has proven it to be largely self-sufficient and capable to weather economic stress and improve upon its business model. We cannot go back to the days of stifling over regulation and I will do my part as a member of the Transportation and Infrastructure Committee to make sure it does not happen.
Lithium Batteries
Finally, I want to touch on the transportation of lithium batteries.
In January 2010, the Department of Transportation issues a Notice of Proposed Rulemaking to regulate the air transport of lithium batteries.
The proposed rule:
Regulates and treats as a hazardous material all lithium batteries and most devices shipped with or containing such batteries, such as laptop computers, cell phones, and medical devices.
Applies to air shipments within the U.S. and to shipments carried on U.S. registered aircraft traveling anywhere in the world.
Proposes to limit stowage of lithium batteries on cargo aircraft to crew-accessible positions or in yet-to-be-approved Federal Aviation Administration fireproof containers.
Billions of lithium batteries have been safely transported as air cargo in the last twenty years. This is not one of NTSB's ``Most Wanted'' safety recommendations. In fact, there are no confirmed fatalities associated with the lithium batteries transportation that I am aware of.
The proposed rule grossly underestimates the cost of the regulation to American businesses. The Department of Transportation analysis estimates approximately $9 million per year in cost to the U.S. economy. But actual costs to hundreds of businesses--battery manufacturers, consumer goods manufacturers, freight handlers, and air transportation companies--could easily top $1 billion a year.
I believe the Department of Transportation analysis did not take into account:
Additional annual payroll and internal handling costs,
Administrative costs associated with negotiating and executing hazardous materials contracts for customers shipping these newly- regulated goods,
Adverse impacts on retail shipping outlets,
Potential layoffs associated with the burdensome requirements, and
Commercial consequences from potential lithium battery shipment consolidation.
The United Parcel Service alone estimates this new regulation would cost the company $264 million in the first year, and more than $185 million in each following year.
This proposed rule threatens to stifle job creation and industrial advancement, and affects a wide segment of the economy, including U.S. manufacturing, transportation, and retail sectors. It will also give foreign cargo carriers a competitive advantage over U.S. companies.
Transportation regulations for lithium batteries have been extensively considered by international bodies such as the United Nations, International Civil Aviation Organization and International Air Transport Association. In order to protect the competitiveness of the U.S. in the international marketplace, standards for the transport of lithium batteries should be fully harmonized with international rules and regulations. This is the only reasonable focus of any regulatory action on air transportation of lithium batteries. I strongly support efforts to make the transport of lithium batteries as safe as possible, but we must do so in a reasonable, responsible manner.
I applaud our House leadership for bringing this important resolution to the floor and thank them for the opportunity to discuss these important issues.