Smart, Balanced Economic Regulation
America’s thriving freight rail network is proof that smart and balanced government regulation can work – both for the regulated industry and the public. The performance of U.S. freight railroads in the years prior to 1980 and following passage that year of the landmark Staggers Rail Act presents a stark “before and after” portrait showing just how important smart public policy is to our economy.
By 1980, decades of stifling federal over-regulation had devastated the rail industry, driving many railroads out of business or into bankruptcy. Railroads and the companies and communities they served all suffered under a convoluted system of economic regulation that made it impossible for railroads to earn enough capital to reinvest back into the rail network.
The Staggers Act changed all that by allowing railroads to operate like other businesses in a free market – and to grow revenues and thus the ability to make needed improvements in track, technology and equipment. Today’s smart and balanced economic regulation has enabled railroads to churn more than $600 billion back into the rail system and given America the safest, most productive and efficient freight rail network on earth.
Freight railroads invest billions each year in the rail network to improve productivity and efficiency and make a safe rail system even safer. At the same time, we’ve seen public investment of taxpayer dollars in infrastructure dwindle even as critical repair and maintenance needs have risen.
One way for the government to more effectively leverage scarce infrastructure dollars is through public-private partnerships, where private sector entities and the government share costs in order to save tax dollars and move forward on infrastructure projects more quickly and efficiently.
Partnerships enable the public sector to advance key goals like reducing highway congestion, expanding passenger rail capacity or cutting greenhouse gas emissions while sharing project costs with the private sector. In these cases, railroads pay for the aspects of a project that provides them a commercial benefit and taxpayers pay only for those aspects of the project that are designed to benefit the public.
Rail oriented public-private partnerships like the Chicago Region Environmental and Transportation Efficiency (CREATE) program have combined local, state and federal government dollars with private sector rail capital to improve passenger rail service, reduce motorist delays, increase safety, improve air quality and create jobs while addressing a troublesome rail bottleneck in Chicago that impacts the entire national rail network.