Coalition Letters

STB Revenue Adequacy Letter

by Nick Zaiac, Marc Scribner, Phil Kerpen, Steve Pociask, Roslyn Layton, Grover Norquist, Jon Decker, Matthew Kandrach, Jason Pye, Mario H. Lopez, Tom Giovanetti, Karen Kerrigan, Ian Adams
Dec 5, 2019
issues: Competition Policy, Transportation
Dear Chairmen Fischer and Lipinski, Ranking Members Duckworth and Crawford, and Members of the Subcommittees,

We write to you today to emphasize the significance of the Surface Transportation Board’s (STB) forthcoming December 12 and 13, 2019, hearing on railroad revenue adequacy (Docket Nos. EP 722 and 761). Congress has made substantial efforts to reduce heavy-handed railroad regulation, including the expansion of strict rate regulation. The potential for the STB to use revenue adequacy as a means to institute price controls is deeply troubling.

Going forward, we recommend that Congress exercise close oversight of the STB and its remaining authorities. Partial freight rail deregulation by Congress has allowed this industry to become highly efficient in recent decades. As a result, America’s private freight railroads provide innumerable benefits to U.S. businesses and the economy.

Specifically, we would like to highlight several concerns with the STB’s approach to revenue adequacy raised by leading railroad regulation scholars, who authored the 2015 report Modernizing Freight Rail Regulation (TRB Special Report 318) for the National Research Council’s Transportation Research Board of the National Academies of Sciences. These experts’ concerns regarding possible changes to revenue adequacy determinations and the use of those determinations in administering railroad regulations were submitted to the STB on October 29, 2019, and include:

Such an approach runs counter to Congress’s intent in partially deregulating the railroad industry and would threaten the future health of America’s railroads—which in turn would risk the massive gains to consumers from reforms enacted over the last four decades. We urge you to closely monitor the December 12 and 13 hearing and the two revenue adequacy proceedings at issue to ensure the United States will preserve these societal benefits far into the future.


Marc Scribner
Senior Fellow
Competitive Enterprise Institute

Phil Kerpen
American Commitment

Steve Pociask
American Consumer Institute

Roslyn Layton
Visiting Scholar
American Enterprise Institute*

Grover Norquist
Americans for Tax Reform

Jon Decker
Executive Director
Committee to Unleash Prosperity

Matthew Kandrach
Consumer Action for a Strong Economy

Jason Pye
Vice President of Legislative Affairs

Mario H. Lopez
Hispanic Leadership Fund

Tom Giovanetti
Institute for Policy Innovation

Nick Zaiac
Resident Fellow, Transportation & Infrastructure
R Street Institute

Karen Kerrigan
President & CEO
Small Business & Entrepreneurship Council

Ian Adams
Vice President of Policy

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