Are Freight Rail CEOs Attempting To Undermine Pro-Consumer Bipartisan Rail Reform Compromise?

 WASHINGTON, D.C. - In response to recent criticism by the CEOs of Union Pacific and CSX of the pro-consumer rail reforms unanimously passed by the Senate Commerce Committee in December, Robert Szabo, Executive Director of Consumers United for Rail Equity (CURE), a coalition of freight rail customers seeking changes in federal law and policy that would require railroads to provide more competitive pricing and reliable service, issued the following statement:

 "Statements by the CEOs of a couple of the major freight railroads seem to have been made with the intent to undermine the pro-consumer, bipartisan compromise legislation embodied in S. 2889, the Surface Transportation Board Reauthorization Act of 2009. These statements are surprising because they are being made within a month of the bill being reported from committee without objection by the freight railroad industry and disappointing because nothing about the legislation has changed since December 17th, when it was ordered reported by the committee. There are three primary problems with the criticisms of the railroads’ CEO’s:

• "One, their criticism is unfounded. Senators and staff of the Senate Commerce Committee, on a bipartisan basis, worked ten months to address the concerns of both freight rail companies and rail customers. At the committee business session on December 17th, Senators on the committee were rightfully proud of their achievement in developing a compromise that preserves the Staggers Rail Act while addressing the well-documented problems of captive rail customers. This ongoing problem has defied resolution for almost two decades. For railroad CEOs to criticize this bipartisan compromise bill which was developed with their full participation raises a number of troubling issues regarding their motives and future actions.
  
  
• "Two, their criticism is misleading. The pro-consumer reforms in this legislation maintain the pricing freedoms of the railroads while ensuring rail customer access to competing freight railroads. This combination of pricing freedom and the freedom to participate in competitive markets is exactly the reason the freight railroads advocated successfully in 1980 for the enactment of the Staggers Rail Act of 1980. The Act deregulated competitive rail activities, but not railroad dealings with their captive rail customers.
  
  • "Three, their criticism is unnecessary. Since committee action, the stock of major freight rail companies continues to be viewed favorably by the investment community. In fact, Berkshire Hathaway, within weeks of this legislation being reported from the committee and surely cognizant of this pending legislation and its possible content, proposed to pay a 30% premium to buy all the stock of one major freight railroad . Berkshire Hathaway has issued no statement since December 17th saying they are reassessing their proposed purchase in light of the content of this legislation.

"The national political lesson of the past week has been that pro-consumer, bipartisan legislation is what voters expect from Washington. In a very partisan political environment, the Senate Commerce Committee has produced just such bipartisan legislation and unanimously recommended the legislation to the full Senate. The Senate should move quickly to pass this bipartisan legislation in 2010."

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