Monday, November 07, 2016

STB’s tempest in transparency

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STB’s tempest in transparency

Pity economic regulators. The more they seek the middle-of-the-road, the greater risk both sides assail them. Economist Sidney L. Miller wrote, “It seems clear that our railways are regulated well, rather than wisely.”

As lawmakers examined the consequences of the regulatory leviathan during the latter 20th century, lessened were the limits on market freedoms for domestic transportation providers. Retained were protections for shippers lacking effective alternatives to rail.

Captive shippers are a crabby assembly, annoyed that attainment of those protections mirrors playwright Samuel Beckett’s “Waiting for Godot.” In 1886, then-Sen. Benjamin Harrison (R-Ind.) said, “What we want is a tribunal to which a man who thinks he has a grievance against a railroad can go and tell his story and then go home and attend to his business, and [regulators] will do the rest.” As the Brits say, “Would that it were so simple.”

Railroads fret regulators are prone to overreach. Economist Jim Miller, President Reagan’s budget director, said, “Regulation, once established, is very difficult to curtail or eliminate.”

Within the belly of the regulatory beast—the Surface Transportation Board (STB)—there rages a tempest in transparency, with Democrat Deb Miller and Republican Ann Begeman agitated over the closeted leadership of Chairman Dan Elliott, a Democrat. No rail regulator has filed as many dissents as Begeman; while Miller increasingly vocalizes displeasure with Elliott.

Consider two recent Elliott-ordered consultancy studies central to simplifying and making less costly procedures for determining the reasonableness of rates charged captive shippers. One, at a cost of $1 million, was, in Miller’s view, supposed to fulfill Congress’ desire to develop meaningful procedural alternatives, but instead serves to defend the status quo. The second, prepared more than a year ago and marked “confidential,” was released in late October in a belated effort by Elliott to portray greater agency transparency.

Buy-in by Begeman and Miller is problematic. Elliott failed to invite their input or review, and both studies lack alternatives Miller advocates while endorsing processes and procedures Begeman considers defective and deficient.

Collegiality is a rare commodity under Elliott, notwithstanding impressive credentials of his fellow board members.

Few rail regulators in modern history were as well-equipped as is Begeman. For two decades she advised Senate Republicans on transportation policy—among them Senate Commerce Committee doyen John McCain (R-Ariz.), on whose presidential campaign she worked. Had he not derailed his run by choosing as a running mate that wack-a-doodle soccer mom from Alaska with the made-for-tabloid-journalism dysfunctional family, Begeman might have become the cabinet-level transportation secretary. Her term now expired, she departs the STB Dec. 31.

Miller’s bonafides, too, are impressive. She is a former Kansas transportation secretary under governors of both political parties, is well respected among state rail planners, and has experience in transportation consulting. Former Republican Federal Railroad Administrator Allan Rutter, also with an extensive background in state rail planning, said of Miller, “She is not unreasonable in wanting collaboration, not dictation.”

At an August Senate Commerce Committee hearing chaired by John Thune (R-S.D.), Begeman and Miller pronounced their displeasures.

Begeman: “I have had many frustrations. I certainly was aware of the Board’s reputation for its sometimes glacial pace … but to experience it first-hand, in a position from which I expected to positively influence that pace through collaboration with my fellow members, I was in for a big surprise. I strongly disagree with the chairman’s stated view that he alone is ‘the person responsible for moving the docket forward.’ I want to improve the functioning of the agency, not embrace the status quo.”

Miller: “[A recent letter to Congress by Chairman Elliott explaining a consultant’s rate methodology study] was sent without Board member Begeman’s or my knowledge, and it was done contrary to my preference that the Board provide its own analysis of [the consultant’s] conclusion … Unilateral actions such as this are contrary to the reason Congress established a multi-member Board.”

Sometime in 2017, the Senate will be asked to confirm three new nominees to join Elliott and Miller. Legendary New York Mayor Fiorello La Guardia famously urged “patience and fortitude.” Indeed.

 

 

 

 

 

 

 

 

 

 

 

 

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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