(The following story by Ari Natter appeared on the Traffic World website on November 24. John Tolman is the BLET’s Vice President & National Legislative Representative.)
WASHINGTON, D.C. — When potential nominees for top regulatory agency posts with the incoming Obama administration started the time-honored process of meeting with key groups in the nation’s capital, there was a telling difference in the settings.
After eight years in which executive branch get-acquainted consultations with private industry were decidedly focused on the corporate side, post-election meetings this year include important sessions at the headquarters of some of the leading organized labor groups that supported Barack Obama in his campaign for the presidency.
Transportation businesses are going from an administration that named former CSX Chairman John Snow as its treasury secretary to one that has been considering labor leaders, including railroad union executives, for regulatory posts, setting the fault lines for potential conflict between industry and the administration.
International Brotherhood of Teamsters President James P. Hoffa set the potential stakes high immediately after the election, calling for “getting somebody in the secretary of transportation … who can re-regulate the (transportation) industry.”
“There is very little regulation in regard to railroads right now,” Hoffa told Traffic World in an interview. “They are letting the rails run wild, and we have to have more regulation in terms of monitoring the railroads.”
For shippers and carriers, labor is just one area where a new political map could have profound implications for how they conduct business. And beyond the changes at the executive branch, a larger Democratic majority in the Senate could bring about the most significant reforms to the transportation industry since 1980. Capitol Hill will be a key battleground, as businesses that had long found fertile ground for deregulation and tax cuts now find themselves playing defense on legislation.
“The entire business community is going to be on the offensive in the next Congress,” said Chuck Carroll, president of the National Association of Waterfront Employers.
At stake are policies and regulations that could have a huge im-pact on taxes, labor, homeland security and environmental laws.
“I think there is going to have to be a careful balance of the economic situation and some of the other objectives that could be costly,” said Janet F. Kavinoky, the U.S. Chamber of Commerce’s top transportation lobbyist.
“We are going to be looking at the regulatory questions and see how we can productively work with the new Congress and the new administration,” she said.
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The first signs of that new administration had a relatively familiar look in the team President-elect Obama named to head the DOT transition. They included DOT transition chief Mortimer Downey, a former deputy secretary of transportation under President Clinton. A key champion of intermodalism at the DOT, he has retained a role in transportation as chairman of a consulting subsidiary of the Parsons Brinckerhoff construction engineering firm and he recently helped oversee an independent review of the DOT’s crossborder trucking program.
“We would certainly like it if Mort or someone of his caliber is selected to head up this important job,” said Bruce Carlton, president of the National Industrial Transportation League.
Also on the DOT transition team are: Jane Garvey, the former Federal Aviation Administration administrator and more recently a member of JP Morgan’s infrastructure investment group; and Michael Huerta, associate deputy transportation secretary in the Clinton administration and who headed both the Port of San Francisco and New York City’s Department of Ports.
The other members include: John Cullather, a longtime congressional staffer, most recently on the House Transportation and Infrastructure Committee; and Carol Carmody, former vice chair of the National Transportation Safety Board.
The names floating through Washington as possible nominees to the DOT included a mix of familiar names from the Clinton administration and new names, including labor leaders as well as government veterans from state and local transportation offices around the country.
Many industry observers believe those officials are likely candidates for the top job at DOT. Others under consideration include names familiar in Washington policy circles as well as a mix of officials from organized labor and state and regional transportation regulatory agencies.
Among those sources say have been discussed for the DOT are: Anne Canby, president of the Surface Transportation Policy Partnership and former Delaware state transportation secretary; Pennsylvania Gov. Ed Rendell, an early backer of Sen. Hillary Clinton’s presidential candidacy who has had a high-profile role in debates over road funding; and Democratic Reps. Pete DeFazio and Earl Blumenauer of Oregon, with DeFazio holding a higher profile in Congress but Blumenauer having a strong reputation as an environmentalist on transportation.
Another favorite of some congressional Democrats is Thomas Downs, a transportation veteran who has held positions at DOT and led Amtrak.
Also under consideration are two members of the National Surface Transportation Policy and Revenue Study Commission, Steve Heminger and Frank Busalacchi.
Heminger, named to the commission by House Speaker Nancy Pelosi, is executive director of the San Francisco Bay Area’s Metropolitan Transportation Commission and once was a congressional staffer.
Transportation industry sources, speaking on condition of anonymity, said Busalacchi, Wisconsin state secretary of transportation since 2003 and a former secretary-treasurer for the Teamsters local in Milwaukee, is a more likely candidate for head of the Federal Railroad Administration.
Other candidates for agency positions, according to industry sources, include: Joseph Szabo, a onetime mayor in Illinois who is a longtime executive in the United Transportation Union; John Tolman, a vice president at the Brotherhood of Locomotive Engineers and Trainmen; and, according to newspaper reports in Chicago, Rep. Nick Rahall, D-W.Va.
Greater regulation of the transportation industry may be on the table, and industry officials are concerned Obama’s bid to address the nation’s troubled economy, including executing parts of the massive financial bailout that has been managed by the Bush administration, will bring on greater regulation in the transportation world.
“The economy will be the first item on the agenda,” House Majority Leader Steny Hoyer, D-Md., told reporters last week.
After that, however, are a host of items from infrastructure funding to environmental rules and labor law that will get a new look, perhaps right away.
Among top priorities for all sides – an enormous concern for business and an important measure for labor – is the Employee Free Choice Act, also known as “card check” legislation that would make organizing of nonunion companies easier.
“I think we will see some substantial changes to the way the administration approaches the labor market,” said C. Randall Mullett, vice president of government affairs for trucking and logistics giant Con-way.
The EFCA is “is high up on our agenda,” Hoyer said. “We believe very strongly that employees should not only have the right to collectively negotiate wages, benefits and working conditions but that our economy is better off for it.”
Under existing labor election law, “it has been difficult to organize,” he said.
Climate change legislation is also likely to be a congressional priority next year. That legislation may include the transportation sector among industries that are required to participate in cap-and-trade type plans to reduce emissions.
With the transportation industry emitting more than 27 percent of the nation’s greenhouse gases, such legislation – championed by Sen. Barbara Boxer, D-Calif., the chairwoman of the Senate Environment and Public Works Committee – could prove costly. “The environmental issues are certainly going to be upfront,” said Timothy Lynch, the American Trucking Associations senior vice president and a long-time trucking lobbyist.
Legislation deemed toxic by the railroads – antitrust and competition bills – could be back with a vengeance in the 111th Congress, and some industry critics are calling for additional oversight as well.
And fuel surcharge legislation, championed by the Owner-Operator Independent Drivers Association, could also gain support in a more Democratic Congress.
Still, some shippers are holding onto hope that political and economic realities will blunt or at least slow of the progress of thorny regulatory initiatives and policies they fear could hurt their business.
Senate Democrats are still awaiting election results in Minnesota and Georgia to see if they can reach the 60-vote filibuster-proof majority, a procedural move used by Republicans 62 times in the last Congress to block Democratic objectives.
And some business representatives in Washington say the moves by Democrats to bring in centrist candidates, particularly in the West and the South, raises their hopes that the legislative agenda won’t be unfriendly to business.
“We believe what we see in some of these new elections is a greater willingness to work with the business community,” said Greg Casey, president and CEO of the Business Industry Political Action Committee.
Hoyer suggested as much in his meeting with reporters last week. He said Obama projected a “thoughtful, considered, consensus building” disposition that would be reflected in a disciplined Congress. “As Speaker (Nancy) Pelosi said, we will govern from the middle, not the muddled middle,” said Hoyer.
Also, as the economy continues its dramatic downward slide, shippers believe a Democratic administration will move cautiously in areas such as labor law, cargo scanning mandates and environmental regulations.
“Now is not the time when you want to be throwing up barriers that make it harder to do business,” said Michael Regan, president and CEO of the Elmhurst, Ill.-based TranzAct Technologies.
“You are in a situation now where the reality of having to govern is going to have to override some of the promises made during the election season,” he said. “I think the reality of the economy is going to serve to mitigate some of the changes that have construed as harmful for business.”
As president-elect, Obama has promised to better the working conditions for employees of several government agencies, including the Transportation Security Administration, at which he said he would work for collective bargaining rights for workers.
“Since 2001, TSA has had the unfettered ability to deny its work force even the most basic labor rights and protections,” Obama wrote an October letter to the president of the American Federation of Government Employees.
Given Obama’s outspoken support of increasing highway and other transportation infrastructure spending, his win may be a victory for the next surface transportation bill.
But a delay in appointing a transportation secretary could end up in delaying the enactment of the highway bill as well, which is supposed to become law by the end of next September.
Other shippers say, given Obama’s relatively short history as a lawmaker, they will be taking a wait-and-see approach.
“I think one of the problems is, nobody knows what this guy believes, thinks, or will vote on,” said Keith C. Bassuener, distribution and logistics manager for consumer goods supplier Bemis Manufacturing.
“I don’t think we are going to know,” Bassuener said, “until we see him actually put his foot down somewhere.”