A Big Week for Rail in Congress

It was a busy week for rail on Capitol Hill, featuring two high-profile Congressional hearings and the release of Amtrak’s Fiscal Year 2024 budget request.

Norfolk Southern CEO Grilled by Senate

The week opened with a spirited oversight hearing held by the Senate Committee on Commerce, which looked at ways to improve rail safety in the wake of the Norfolk Southern (NS) derailment in East Palestine, Ohio.

The newly elected Republican Senator from Ohio, J.D. Vance, was particularly pointed in his criticism, saying that NS is hiding behind empty phrases that merely play lip service to safety. He urged his colleagues and rail industry representatives to take concrete steps to prevent future disasters like East Palestine. Senator Vance has joined with Senator Sherrod Brown (D-OH) to introduce the bipartisan Railway Safety Act, which would improve freight rail safety by capping train lengths for certain types of cargo, mandating two-person train crews, increasing financial penalties when railroads violate safety rules, and enhancing reporting requirements.

NS President and CEO Alan Shaw repeatedly apologized for the derailment, but his statements seemed crafted to avoid admitting any legal liability. And while Shaw supported some new regulations—tougher design requirements for tank cars, giving first responders more funding for hazmat equipment, and providing first responders with more information about when trains with hazmat are moving through their community—he was cagey when asked about several of the provisions in the Railway Safety Act.

Chairwoman Maria Cantwell (D-WA) also criticized recent trends in the freight rail industry, pointing out that between 2017 and 2021, freight railroads saw a 25 percent decrease in infrastructure spending, a 22 percent decrease in the number of employees, and a 14 increase in accident rates. She also had a revealing exchange with Clyde Whitaker, Legislative Director, Ohio State SMART-TD, who explained that the alarms from wayside detectors are only transmitted to central dispatchers, and that train crews are often kept in the dark or told to keep moving.

[You can view the full exchange, which takes place at minutes 4:11:20 - 4:20:01 of the recording.]

“This increase in derailments is what happens when you cut 30 percent of your workforce in less than a decade, reduce training or outsource work across every rail craft, and run longer, heavier trains that are harder to control,” stated Whitaker. “This is what [Precision Scheduled Railroading] looks like.”

Additionally, Chairwoman Cantwell and Ranking Member Ted Cruz (R-TX) joined together to express disbelief and anger at the news that NS had failed to retain the full video recording of the accident. NS turned over 15 minutes of video footage from the cab to the National Transportation Safety Board, which shows the minutes just before and right after the derailment. However, NS quickly rotated the locomotive in question back into service and the full recording was overwritten.

Freight rail industry lobbyists are already gearing up to oppose the Railway Safety Act. Meanwhile, the U.S. House of Representatives has introduced a watered down version of the Senate bill called the RAIL Act.

USDOT Chief Appears Before Senate Appropriators.

Next up was Transportation Secretary Pete Buttigieg, who appeared before the Senate Appropriations Subcommittee on Transportation.

Several Republican Senators had hard words for the Secretary, pointing to the East Palestine derailment and recent supply chain disruptions as evidence of lax oversight at the USDOT.

The Secretary, for his part, pointed to industry trends that has led to industry consolidation, constraining capacity growth and leading to fragile networks that are easily disrupted.

“Over the years, a drastic tendency away from competition and towards concentration has been visible in these [transportation] industries,” stated the Secretary in his testimony. “And at the same time, many of the biggest firms in transportation have slashed staff and costs, often boosting their profitability but too often at the expense of operational effectiveness and public benefit.”

“The result is a transportation system today that is still too vulnerable, and when any part of it strains or breaks, the costs are borne by the American people – from the frustrations of millions of airline passengers to the terror felt by the residents of East Palestine, Ohio after the derailment there,” he added.

There was also some pushback against funding levels proposed by the Biden Administration in its FY24 budget request. Senator Chris Coons (D-DE) told Secretary Buttigieg that he is supporting $3.65 billion for Amtrak, the full amount authorized by the Bipartisan Infrastructure Law (BIL), greater than the White House’s request for $3.1 billion. Senator Coons emphasized that, while Amtrak is receiving capital funds through the BIL to upgrade its network, it still needs annual appropriations to operate the trains and effectively plan and expand its workforce.

“Amtrak’s funding needs were not addressed by the bipartisan infrastructure act,” said Senator Coons. “There was a significant and helpful down payment, but the framing assumes steady, annual appropriations.”

[Like Senator Coons, Rail Passengers Association is requesting the fully authorized amounts for Amtrak, and for all other rail programs.]

The Secretary called Amtrak a “vitally important asset to the U.S. economy,” and said he was in regular contact with the railroad regarding projects and its workforce hiring goals.

Earlier this month, in response to an inquiry from Rep. Rosa DeLauro (D-CT) regarding the House GOP budget proposal to cut discretionary spending by 22 percent (equivalent to a $540 million cut to Amtrak’s budget), Secretary Buttigieg warned about the consequences to the U.S. rail network.

“On the Northeast Corridor, reduced funding would lead to deteriorating ride quality and longer trip times due to delays and slow orders that could otherwise be mitigated by maintaining Amtrak’s investment in NEC infrastructure,” he wrote in his letter. “Similarly, on the National Network, reduced funding would delay important capital maintenance and could force Amtrak to cut back service, particularly on its Long Distance routes that connect more than 300 communities across 39 states.”

Amtrak Releases FY24 Legislative Grant Request

Finally, Amtrak published its annual budget request to Congress for FY2024, requesting $3.65 billion in funding.

Notably, the Amtrak request differs from the BIL’s authorization in its allocation between the Northeast Corridor (NEC) and the National Network (NN). The BIL provides $1.2 billion for the NEC and $2.45 billion for the NN, while Amtrak calls for $1.7 billion for the NEC and $1.95 billion for the NN, citing the loss of high-dollar business travelers from the NEC.

Amtrak also divides the budget request into “base needs” and “modernization.” Base needs are defined as the bare minimum in funding needed to run existing Amtrak trains, maintain vital infrastructure, and make a “limited number of high-priority, high-impact strategic investments for [Amtrak’s] future.” Modernization funding would accelerate upgrades to stations and equipment, advance projects to reduce trip times and increase speeds, and enhance on-board service and amenities.

Projects in the “Modernization” category include:

• Improved quality on Long-Distance services, including through additional fleet overhauls and refreshes and projects that will improve on-time performance;
• Increased train speeds and reduce trip times on the NEC;
• Revitalized stations across the country, including major stations in places like New York, Philadelphia, Washington, D.C., and Chicago, as well as smaller stations across the network;
• Enhanced customer amenities (such as Wi-Fi) and food and beverage options; and
• Advancing partnerships on both the NEC and in key markets across our National Network that could help Amtrak improve or expand service.