- The Washington Times - Saturday, September 15, 2007

ANALYSIS/OPINION:

Democratic Rep. James Oberstar of Minnesota is using his post as chairman of the House Transportation and Infrastructure Committee to push through Congress a bill that could strangle the railroad industry under the pretense of promoting market competition.

Next week, the committee holds a hearing on H.R. 2125, a bill disingenuously named the Railroad Competition and Service Improvement Act. The bill would re-regulate the railroad industry by effectively forcing price controls on a market that was flailing prior to the 1980 deregulatory Staggers Rail Act, which then allowed the industry to revive itself into a healthy and flourishing field. Now it appears this effort to turn back the clock on the Staggers Act would create new bureaucracies and punitive regulatory bodies. While in some form moving around on the Hill for the last 10 years, the measure is now gaining bipartisan traction this session.

Mr. Oberstar and other supporters, including Sen. John Rockefeller, West Virginia Democrat, has decided to go for railroads’ jugular vein with his bill, a measure the Association of American Railroads estimates would cost the industry a staggering $5 billion annually in lost revenue. Despite its good intentions of lowering costs for customers who use railroads to ship freight, the Oberstar bill would decrease revenue for railroads, giving them less incentive and greater expenses for operation, thus reducing railroads’ shipping capacity. In seeking to be a consumer advocate, Mr. Oberstar will instead hurt the industry and consequently, the very freight customers he is trying to assist.

Supporters of the bill say it would create a venue for freight customers to lower the exorbitant fees freight customers must pay now to file rail rate cases. These concerns have already been addressed by a recent ruling of the Surface Transportation Board, the body governing railroad arbitration, which stated that these fees must be kept at a minimum and is currently and adequately addressing railroad rate cases. If there are changes to be made to this system, they should be addressed by the board rather than creating new red tape.

While Mr. Oberstar’s motivation and actions are predictable, it is rather astonishing that nearly a third of the members who have signed onto this legislation are Republican — including Rep. Ron Paul of Texas, the self-crowned libertarian prince of the free market. Undoubtedly many of the supporters of the Oberstar legislation are feeling pressure within their districts, especially when pet industries in those districts rely on railroads. The Republicans should use this case to retain its brand as the party of fiscal restraint and free markets. Conservatives and other free traders need to get this one right.

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