Monday, January 30, 2017

Did STB capitulate to Trump and Lenin?

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Did STB capitulate to Trump and Lenin?

Expediency over principle describes a unanimous vote Jan. 27 by the three Surface Transportation Board (STB) members—Acting Chairman Ann Begeman, a Republican, and Democrats Dan Elliott and Deb Miller.

 

This is peripherally about a vote on an unremarkable administrative order delaying for 60 days a rulemaking affecting railroad reporting of certain service performance metrics.

The issue is the Board’s lack of respect for its cherished regulatory independence from the Executive Branch as defined and conferred by Congress. Also troubling is a seeming violation by these Senate-confirmed voting members of their oath of office to defend the Constitution’s separation of powers.

Following a gratuitous reference to the STB as “an independent regulatory agency” not subject to Executive Branch control in their unanimous decision, Begeman, Elliott and Miller voluntarily surrendered that distinction. They accepted as absolute a “Memorandum for the Heads of Executive Departments and Agencies from Reince Priebus, Chief of Staff to President Trump … that the effective date of rules already published in the Federal Register, but that have not become effective, be postponed for 60 days.”

The purpose of the Priebus memo, as confirmed in an STB press release, is to allow the Executive Branch “time for further review.” Whoa. Further review by the Executive Branch of lawful rulemakings by a congressionally created independent regulatory agency—one considered an “expert body” by the federal judiciary that routinely gives “great deference” to STB expertise?

What Begeman, Elliott and Miller accomplished on behalf of their constitutionally created independent federal regulatory agency was consent to abasement by an Executive Branch functionary whose memo deserved the identical response that 101st Airborne Division Brig. Gen. Anthony C. McAuliffe gave a 1944 Nazi ultimatum to surrender at Bastogne during the Battle of the Bulge—“Nuts.”

Word leaked that Begeman, Elliott and Miller voted as they did because “it wasn't worth the risk of becoming a target.” Expediency over principle.

Discarded was a 130-year fight their more resolute predecessors have waged for regulatory independence from the Executive Branch. This voluntary capitulation creates a slippery slope inviting further Executive Branch intrusion directed by a President increasingly tainted as a dictatorial demagogue.

Congress declared STB predecessor Interstate Commerce Commission (ICC) to be independent of the Executive Branch in 1889, two years following its creation. A subsequent dilution of ICC powers was eliminated by a short lived (1910-1913) Commerce Court. When President Warren G. Harding walked two blocks from the White House to the ICC’s then offices on Pennsylvania Avenue in 1921 to lobby Chairman Edgar Clark on freight rates, there is no evidence the President received more than a polite audience.

Subsequent efforts to dilute ICC independence by Presidents Franklin D. Roosevelt, Truman, Kennedy and Johnson were rebuffed. In 1947, the Association of American Railroads warned that Executive Branch intrusion into ICC affairs would cause the ICC’s independence to “denigrate into fiction.”

Although certain administrative functions were transferred to the Department of Transportation by Congress in 1967, there was no chipping away at ICC regulatory independence. Those non-regulatory administrative functions were restored to the STB by the 2015 Surface Transportation Board Reauthorization Act.

The lone dilution of ICC regulatory authority was allowed by Congress in agreeing to President Nixon’s 1969 government reorganization plan, permitting the President authority to appoint a permanent ICC—now STB—chairman. But the 1976 Railroad Revitalization and Regulatory Reform (4-R) Act provided that no federal officer shall have any authority to impede the free communication between the ICC and Congress with respect to budget requests.

Congress preserved the ICC’s regulatory independence and “free communication” with Congress in the 1995 ICC Termination Act that created the STB.

Public choice theory may suggest the self-interest of federal officials owes loyalty to Presidents who nominate—or may renominate—them, but Begeman and Elliott are term limited. No Board member risks removal for defending the independence of their agency. Begeman is in no fear of losing her Acting Chairman title as she intends to relinquish it once another Republican is Senate-confirmed to one of two vacant Republican seats.

Nor is there logic for the capitulation in defense of the STB budget. The STB’s budget request proceeds directly to Congress, and notions of the President’s Executive Branch Office of Management and Budget (OMB) punishing the STB through the President’s separate budget recommendations to Congress are unwarranted. The STB and its mission have exceedingly strong congressional support.

The only recognized lawful limitation to STB regulatory independence exists in the 1996 Congressional Review Act, which allows an incoming President, but only with concurrence of Congress, to nullify regulations, including those of independent regulatory agencies, finalized during previous Administrations.

That is unlikely for the rulemaking at issue—public reporting of railroad service performance metrics on shipments of fertilizer and other agricultural products. Indeed, this rulemaking is of consequence to South Dakota farmers—the home state of Begeman and Senate Commerce Committee Chairman John Thune (R-S.D.).

This brings us to the principle, and implications of not defending it. President Trump’s Cabinet and senior advisers are documented as the wealthiest in history, with the most business interests since the Eisenhower Administration, and sprinkled with investment bankers. It is not an “alternative fact” that Wall Street makes money—big money—on mergers and acquisitions (although this does not suggest government officials would benefit while in office).

Would it be offensive if a President, previously assured of his influence over independent regulatory agencies, sought to bully the STB on a proposed railroad merger, or in favor of increased competition through, say, competitive switching—and the STB capitulated?

We leave the answer to Vladimir Lenin: “Probe with bayonets. If you encounter mush, proceed; if you encounter steel, withdraw.”

To view the STB’s Jan. 27 decision, CLICK HERE.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Frank N. Wilner, Contributing Editor

Frank N. Wilner is author of six books, including, Amtrak: Past, Present, Future; Understanding the Railway Labor Act; and, Railroad Mergers: History, Analysis, Insight. He 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 Change (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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