Are STB’s Newbies Change Agents?

WATCHING WASHINGTON, APRIL 2019 - Stanley found Livingstone faster than vacancies on the five-member Surface Transportation Board (STB) have been filled, with two remaining more than three years after Congress increased from three the number of Senate-confirmed seats.

While two new members were confirmed in January—one filling a vacancy created by former Chairman Dan Elliott’s 2017 resignation; another occupying one of the two new seats—White House and Senate constipation has mocked the 2015 Surface Transportation Reauthorization Act that created the new seats. Its intent was to boost STB productivity and efficiency, and establish momentum to decide its docket rather than act simply as a storage bin.

The 2015 law enlarging the STB was shepherded by former Senate Commerce Committee Chairman John Thune (R-S.Dak.), who shares some responsibility for the delay owing to his access to President Trump, who makes STB nominations; and Thune’s influence within the Senate.

As Commerce Committee chairman, Thune held considerable sway over moving nominees to a Senate floor confirmation vote; and now, as Senate majority whip, is that chamber’s third-highest ranking member, furthering his direct access to Trump.

Meanwhile, STB Chairman Ann Begeman, a Republican, has delayed since her elevation in January 2017—and counter to legislative directives authored by Thune—meaningful action on rulemakings of urgency to the shippers, whose interests are at the core of the STB’s statutory purpose. Begeman, previously a Commerce Committee staffer, shares South Dakota roots with Thune.

Begeman’s reason—as that of her predecessor and Democrat, Elliott—is that significant matters not carrying statutory deadlines should be delayed pending reinforcements. Before departing office, Elliott said, “We don’t want to do anything drastic.”

Rulemakings—several in limbo for more than four years—involve revising how railroad revenue adequacy is determined; evaluating its impact on maximum freight rates; simplifying and making more efficient and less costly the review of maximum rate challenges; developing standards for imposing fuel surcharges; and establishing regulations allowing captive shippers access to a second railroad.

Applying Newton’s first law of motion, politicians and regulators who are at rest will stay at rest unless a force moves them.

Enter STB newbies Patrick J. Fuchs, a 30-year-old Republican, and Martin J. Oberman, a 73-year-old Democrat—one a youthquake, the other an accomplished public-sector doer of difficult tasks.

Few railroad regulators took office with as much in-depth knowledge of the issues as Fuchs, who, while a senior legislative aide to the Senate Commerce Committee, reporting to Thune, participated in the drafting and passage of numerous bills directly affecting freight and passenger railroads, including the 2015 STB reauthorization. He has startled many with his ability to quickly summarize rail issues, link them to commerce law and regulation, and offer insight on their interaction with economics and public policy.

Oberman, an attorney and perennial fixture in Chicago Democratic politics, earned a “progressive” label challenging the entrenched patronage system of Chicago’s Democratic machine politics. As chairman of Chicago Metra—named to the board by Mayor Rahm Emanuel in 2013—he is credited with tidying-up a patronage scandal. 

Awaiting Senate confirmation to the second unfilled new STB seat is Michelle A. Schultz, a Republican and attorney with the Southeastern Pennsylvania Transportation Authority. Former STB member Deb Miller, a Democrat, withdrew her name from consideration after President Trump failed to renominate her following expiration of her first term. That seat awaits a nominee.

Shippers voice similar objectives for Oberman and Fuchs: Overcome the agency’s “biases” in favor of the status quo; decide policy-oriented rulemakings expeditiously; find ways to enhance competition without undermining rail revenue adequacy; and reconcile ever-increasing rail profitability, and service degradation traced to Precision Scheduled Railroading, with “meaningful protection” for captive shippers.

Railroads, preferring the status quo, want the STB to require, in all rulemakings, cost/benefit analyses—a subjective art promising years of further delay and litigation.

Begeman—Trump’s designated chairman—alone controls the STB docket; tension with Miller over the agency’s snail’s pace contributed to her failed renomination. Whether Fuchs and Oberman emerge as change agents remains to be seen.

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.