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Whether the new 116th Congress, with Democrats now the House majority and Republicans still in control of the Senate, is able to end weeks of unproductive calamitous debate and cobble together a funding package to end this shutdown affecting numerous federal agencies with rail-related responsibilities, and gain a signature from a President who has previously done a flip-flop, is unknown. Were a railroad run in such a fashion, it might be called Amtrak, or Penn Central. But we digress.
Especially victimized by the weeks’ long Executive and Legislative branches’ quarrel over something alternatively called “a wall,” “a fence,” “a steel slat barrier,” or, as former White House Chief of Staff John Kelly said, “a fifth-century solution to a 21st century problem,” are regional and short line railroads.
What as recently as late fall was considered a slam-dunk two-year extension of the small-railroad 50% investment tax credit—perhaps even made permanent after years of clawing for periodic two-year renewals—sank into the congressional muck encasing the legislative process. If the so-called tax extenders bill is not reintroduced in the new Congress and passed before corporate tax returns are filed, small railroads may be headed for their banker’s loan window. The tax credit is also known by its designated section of the Internal Revenue Code: “45-G.”
Moving on, until a Presidential signature is placed on new federal agency funding legislation, agencies now closed will remain shut, with the exception of employees performing essential safety functions.
Rail-focused federal agencies that are shuttered include the Department of Transportation (DOT), Federal Railroad Administration (FRA), Federal Transit Administration (FTA) and Surface Transportation Board (STB). Not affected are the National Mediation Board (NMB), previously funded; the Railroad Retirement Board (RRB), which is funded by employer and employee payroll taxes; and Amtrak—although a prolonged federal shutdown could affect Amtrak service if its on-hand federal subsidies, parceled out by the closed-for-business DOT, run short.
As for the assumed wholly independent STB, its budget is caught up in the seven-agency budget impasse, causing its closure. Senate confirmations late Jan. 2 of two nominees to the STB brings the agency to three members, including Chairman Ann Begeman, a Republican — giving it a 2-1 Republican majority, yet still two Senate-confirmed members shy of its authorized strength. Departing Dec. 31 was Democrat Deb Miller, who failed to gain renomination to a second term.
Confirmed to the STB by voice vote of the Senate Jan. 2 were Republican Patrick J. Fuchs, a senior legislative aide to Senate Commerce Committee Chairman John Thune (R-S.Dak.); and Democrat Martin J. Oberman, a Chicago attorney who previously was chairman of Chicago Metra, which operates Chicagoland commuter rail service.
Fuchs was confirmed to a term expiring five years from soon-to-be swearing-in, as it is a new seat created by Congress in the 2015 Surface Transportation Board Reauthorization Act. The seat was not previously filled. Oberman was confirmed to a seat expiring Dec. 31, 2023, and previously held by Daniel R. Elliott. As Senate confirmed officials are not affected by government shutdowns, and can work if they choose, there will be no STB staff available until the current shutdown ends.
A nomination not acted upon by the Senate was that of Republican Michelle A. Schultz, an attorney with the Southeastern Pennsylvania Transportation Authority (SEPTA). As reported here Dec. 11, Senate Minority Leader Chuck Schumer (D-N.Y.) opposed her confirmation pending nomination of a Democrat so as not to create a 3-1 Republican majority on the STB. Schumer wants the Democrat paired with a Republican for simultaneous confirmation.
Presumably, that Democrat is Miller, whose long anticipated renomination was said to be administratively delayed owing to persistent White House personnel turnover. While it is anticipated that Schultz will be renominated by the White House—and Miller renominated—neither is assured. Nominations not acted upon by the close of a final Senate session must be remade during the succeeding Congress.
While Schultz remains employed, Miller is out of compensated work, although she has a non-paid position with the Transportation Research Board. She told Railway Age she remains hopeful of nomination to a second term “by the end of January.”
Outgoing Senate Commerce Committee Chairman John Thune (R-S.D.), to whom Fuchs has been reporting as a senior Commerce Committee legislative aide, said of Fuchs: “His knowledge and expertise as a member of the Commerce Committee staff has been a vital asset over the past four years.”
A statement from the Association of American Railroads’ new President and CEO, Ian Jefferies, was more of a political statement reinforcing rail industry positions on regulatory issues.*
Other nominees confirmed by the Senate Jan. 3 include three to the Railroad Retirement Board—Erhard R. Chorle, a Chicago attorney, to succeed Michael Schwartz as the board’s public member and chairman—a post vacant since August 2015; Jonathan Bragg, a rail labor union officer, as the labor member to succeed Walter A. Barrows (formerly a labor union officer); and Thomas Jayne, a BNSF attorney, as the management member to succeed Steven J. Anthony (formerly a Norfolk Southern attorney). RRB members are not nominated based on political affiliation, but rather, individually, to represent labor, management and the public. Chorle’s term expires Aug. 28, 2022; Jayne’s on Aug. 28, 2023; and Bragg’s on Aug. 28, 2024.
CONFIRMATIONS—AMTRAK AND FTA
The Senate did not act on the confirmations of three nominees to the Amtrak Board of Directors—Rick A. Dearborn of Oklahoma, nominated to succeed former BNSF Chief Legal Officer Jeffrey R. Moreland, who is departing after 10 years on the Amtrak board; Leon A. Westmoreland of Georgia, nominated to a vacant seat; and Joseph Ryan Gruters of Florida, who was to succeed Albert DiClemente, an Amtrak board member since 2009.
Nor did the Senate act on the nomination of Thelma Drake—a former member of the U.S. House of Representatives (R-Va.), and director of Virginia’s Department of Rail and Public Transit—to be Federal Transit Administrator.
It is unknown whether Dearborn, Westmoreland, DiClemente and Drake will be renominated.
As for changes in Congress of significance to railroads, Sen. Roger F. Wicker (R-Miss.) succeeds John Thune (R-S.Dak.) as Commerce Committee chairman. Thune, considered “generally rail friendly,” becomes Senate majority whip. Wicker is labeled the Senate’s “most pro-Amtrak Republican,” but his freight issue views are uncertain.
Succeeding election-defeated Sen. Bill Nelson of Florida—often friendly toward CSX, and railroads generally—as the Commerce Committee’s senior Democrat is Maria Cantwell of Washington State. She is termed “not very friendly” toward Class I freight railroads. Nelson’s departure leaves in Congress only six lawmakers who served when the 1980 Staggers Rail Act, which partially deregulated railroads, was passed.
In the House, Rep. Peter DeFazio (D-Ore.), historically a supporter of short line railroads, but less tested on Class I issues, chairs the House Transportation & Infrastructure Committee, succeeding Bill Shuster (R-Pa.), who retired from Congress. Shuster, as with his father Bud, a previous chairman of that committee, was considered the railroads’ “most dependable defender.”
*“The freight railroad industry congratulates the new STB Commissioners on their well-deserved confirmation. As Congress helps the Board get closer to a full complement of five members, we believe that the agency is now one step closer to realizing its Congressional charter to maintain a proven economic framework that allows the industry to earn the revenues it needs to serve a vast set of customers, while providing appropriate regulatory protections for these same rail shippers. We are confident that these new STB Commissioners will govern sensibly and be driven by sound economic principles. We hope that after careful review of pending proposals that the Board forgoes measures that limit the rail industry’s ability to invest for the future. The AAR and its members look forward to robust and transparent dialogue with the STB.”
Frank N. Wilner is author of six books, including Amtrak: Past, Present, Future; Understanding the Railway Labor Act; and Railroad Mergers: History, Analysis, Insight, all published by Simmons-Boardman Books. Wilner earned undergraduate and graduate degrees in economics and labor relations from Virginia Tech. He has been assistant vice president, policy, for the Association of American Railroads; a White House appointed chief of staff at the Surface Transportation Board; and director of public relations for the United Transportation Union. He is a past president of the Association of Transportation Law Professionals. Wilner drafted the railroad section of the Heritage Foundation’s Mandate for Leadership (Volumes I and II), which were policy blueprints for the two Reagan Administrations; and was a guest columnist for the Cato Institute’s Regulation magazine.
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