The U.S. Senate recently pointed the way forward for the U.S. Surface Transportation Board (STB) on the issue of ensuring sufficient revenue at freight railroads to pour back into the nation's infrastructure.
The Surface Transportation Board Reauthorization Act of 2015, which was passed by unanimous consent in June, would provide commonsense process improvements. They would allow the STB to work more efficiently and, at the same time, recognize the need for freight railroads to provide billions of dollars in private spending to build, maintain and grow the nationwide rail network, so taxpayers don't have to.
In fact, the bill explicitly states that in considering the concept of revenue adequacy, the Board must consider the "infrastructure and investment needed to meet the present and future demand for rail service."
Nothing could be clearer. The Senate fully recognizes that if the STB caps railroad revenue based on the concept of revenue adequacy, thus moving in the opposite direction of the Senate bill, then railroads won't be able to "meet the present and future demand for rail service."
This legislation is supported by many shipper groups as well as railroads.
It took decades for railroads to rebound from the brink of ruin. Decades - and massive private investment in rail infrastructure. Indeed, the industry is an exemplar of how private companies can provide sweeping public benefits. But decades of progress could be undone in the blink of an eye.
Presidential administrations and congressional leaders of both parties have acknowledged that a productive and efficient transportation system is critical to America's international competitive position. Yet that is exactly what the STB would be putting at risk should it accede to the demands of the handful of interest groups seeking to use "revenue adequacy" as a means for achieving price controls.
America wants to remain a global economic leader; U.S. government officials want to ensure energy independence; passengers need to have access to state-of-the-art rail lines; U.S. companies want to ship their products to new markets and create American jobs.
Right now freight railroads are able to help attain these goals because of thoughtful leaders in government, who in 1980 unleashed the transformational power of the marketplace through partial deregulation.
Subsequent federal involvement in rail economics both in the legislative and regulatory arena honored the belief that a developed nation requires a top-notch freight rail system best provided by private companies in control of their resources rather than the government.
The message to STB is clear -- continue to honor that fundamental belief.