[Congressional Record Volume 151, Number 56 (Tuesday, May 3, 2005)]
[Extensions of Remarks]
[Pages E848-E849]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCING THE RAILROAD COMPETITION IMPROVEMENT AND REAUTHORIZATION 
                              ACT OF 2005

                                 ______
                                 

                         HON. RICHARD H. BAKER

                              of louisiana

                    in the house of representatives

                          Tuesday, May 3, 2005

  Mr. BAKER. Mr. Speaker, today I am joined by House Transportation and 
Infrastructure Ranking Member James Oberstar to introduce the Railroad 
Competition Improvement and Reauthorization Act of 2005, a bill 
designed to restore a measure of competition to our Nation's freight 
rail marketplace. We are also joined by our colleagues Representatives 
Rodney Alexander, Charles Boustany, William Jefferson, Charlie 
Melancon, Denny Rehberg, Collin Peterson, Darlene Hooley, Marion Berry, 
and Ed Pastor. This bill, I believe, captures the true intentions of 
railroad deregulation.
  Like all Americans, Mr. Speaker, I want our national railroad 
industry to remain the most efficient in the world. Indeed, our 
railroad system is a model for other national systems. My home state of 
Louisiana in particular relies heavily on efficient railroads to 
deliver product to market and provide the feedstock for our 
manufacturing base. Without reliable rail service, Louisiana--and all 
of America--would be economically hamstrung.
  Congress deregulated the railroad industry in 1980 when it passed the 
Staggers Act. This law revitalized the industry, built efficiencies in 
the system, and bolstered the railroads as a critical component to 
America's transportation infrastructure. As Chairman of the Louisiana 
House Committee on Transportation and Highways, I observed closely the 
implementation and success of the Act.
  However, one lingering element of the Staggers Act provides for 
``differential pricing,'' which in effect allows railroads to ``price 
gouge'' customers served by a single railroad in order to help make up 
for revenue that is lost to customers served by more than one railroad. 
In other words railroads can overcharge a customer where the railroad 
is a monopoly to help recover the revenue it loses in a competitive, 
multiple-railroad environment.
  Prior to the Staggers Act, the federal government administered the 
finances of railroads by imposing price controls. But by allowing 
railroads to institutionalize price gouging, are we not continuing the 
practice of price controls? Indeed, is differential pricing the 
thriving legacy of regulatory control? I believe it is. I assert that 
differential pricing is no more ``deregulation'' than the artificially 
imposed government price controls that existed before 1980.
  I do not believe Congress intended to institutionalize price gouging 
when it passed the Staggers Act in 1980. Rather, the Staggers Act was 
an attempt to revive an important industry in America's economy. It was 
not enacted to allow the industry to thrive at its customers' expense. 
When the 109th Congress reflects back on the success of the Staggers 
Act, we can indeed take pride in ``getting it right.'' Congress 
achieved its goal of resuscitating the ailing railroad industry, but 
Congress

[[Page E849]]

did not intend to sustain the life of this industry at the growing, 
unfair expense of other industries.

  When Congress passed the Staggers Act in 1980 there were over 40 
Class I railroads competing for business. Today, after over 50 mergers 
and consolidations there are only 7 Class I railroads in North America 
and four of them control over 95 percent of the railroad business. This 
unprecedented consolidation has led to whole states, regions and entire 
industries becoming captive to a single railroad. This level of 
concentration and the lack of competition it has brought were never 
envisioned by Congress in the 1980 Act.
  Over this same period the agency that administers rail law, the 
Surface Transportation Board, has produced rulings, which have skewed 
the freight rail market place to the point that it is now a Federally 
protected monopoly. Railroads are operating within the law... but that 
law is outdated given the current number of railroads and market 
conditions of the new century.
  Mr. Speaker, as you may know, Louisiana industry is in dire straits. 
Every month companies announce closures, lay offs, and moves--depriving 
our economically struggling state of hundreds of important jobs. When 
these jobs are lost, so are the workers' pensions, salaries, and health 
benefits. When hundreds of jobs are lost, it affects other small 
businesses that rely on workers to keep them viable.
  Though Louisiana industry faces many financial challenges, premier 
among them is the cost to do business--and aside from energy supply, 
the most expensive cost of business is the artificially inflated rates 
imposed on Louisiana companies that, through no fault of their own, 
exist under a railroad monopoly.
  Mr. Speaker, this situation is not exclusive to Louisiana. It exists 
in West Virginia, North Dakota, Idaho, Georgia, Florida, Montana, 
Minnesota--in fact, Mr. Speaker, there is not a state in the Union free 
from this blemish on the free enterprise system.
  The bill we are introducing today will truly match the deregulation 
goals of the Staggers Act with the tried and true American tradition of 
a competitive free market.
  Our bill takes deregulation to a higher level by fortifying healthy 
market competition.
  The bill would remove artificial protections maintained by an 
outdated policy that allows freight railroads to operate in an 
atmosphere, which no other business in the country enjoys--including 
exemption from anti-trust law.
  Mr. Speaker, I urge all pro-market, pro-consumer, pro-deregulation, 
pro-fairness, projobs, pro-economy, pro-transportation, and pro-
railroad Members to join me in completing the deregulation goals of the 
Staggers Act of 1980 by cosponsoring the Railroad Competition 
Improvement and Reauthorization Act of 2003.

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