Flush with the legislative success of airline deregulation, the administration has turned its attention to the trucking and rail industries.
Although the legislative proposals still are being formulated, extensive preparatory work already has been done, and administration sources are promising proposals early in this congressional session designed to alter significantly the way both industries are regulated.
Although many Washington observers are skeptical that Congress will pass extensive deregulation measures in this election-year-truncated session -- especially the controversial and perhaps politically hot trucking issue -- administration officials insist they will make a serious, tandem effor on both.
President Carter has been a long-time supporter of trucking deregulation. And in remarks to the Business Council last month, he went out of his way to praise the efforts already undertaken by the Interstate Commerce Commission under Chairman A. Daniel O'Neal, and pledged to do what he could to boost deregulation. "I realize the independence of the regulatory agencies, but with my own voice, my own influence, my future appointments to the ICC, my intention is to continue this trend," the president said.
President Carter's expected procompetition appointments to the agency in the near future will offer the first test of congressional sentiment on trucking deregulation -- at least in the Senate. Although opposition in the House is expected to be stronger, two key committee chairmen already have backed down from an earlier demand that the ICC halt its attempts to deregulate the trucking industry partially. The action, by Public Works and Transportation Committee Chairman Harold T. (Bizz) Johnson (D-Calif.) and surface transportation subcommittee Chairman James J. Howard (D-N.J.), heartened administration insiders.
The key Senate and House committees were involved in extensive consultations over the past few months -- undertaken by an interagency task force headed by the Transportation Department -- to draw up options for the trucking deregulation efforts.
"We're after getting results," one administration source said. "We want to diffuse any opposition that would come just because we failed to give them prior notice and keep them informed."
The options given Carter on trucking ranged from total deregulation to simple legislative consolidation of ICC reforms. Formal recommendations are being considered and are on the way, according to administration officials. "It's not a question of whether we'll do something," one said. "It's just a question of when and what it is going to look like."
While the administration is drawing up its plans, Sen. Edward M. Kennedy (D-Mass.), who played a key role in airline deregulation along with Commerce Committee Chairman Howard W. Cannon (D-Nev.), is drawing up his own and probably will beat the administration to the punch. He plans to introduce a measure to abolish antitrust immunity for the collective rate bureaus that now set freight rates as a step toward deregulation. Kennedy held hearings last year on the private, but government-sanctioned, rate-setting mechanisms in the trucking industry as chairman of the antiturst and monopoly subcommittee. This year, he will head the powerful Judiciary Committee.
Trucking is already shaping up to be a political brawl. Besides an estimated $1 million public relations effort spawned by the American Trucking Associations to stave off deregulation, another group of truckers has formed a separate effort out of Chicago to do the same. Opposition by the Teamsters also has to be mentioned.
The administration is hoping for support from shippers who may expect reduced freight charges for their goods with a more competitive system; several large business groups already have endorsed the effort.
Although DOT Secretary Brock Adams has recommended to President Carter that a "parallel approach" be taken in the rail and truck industries, he made clear in his memorandum forwarding the options for both deregulation campaigns that he felt they should proceed with rail legislation first if a choice had to be made. "The railroads are in great difficulty," he contended.
Sweeping changes are being proposed in the rail area, and they do not just cover traditional regulation by the ICC, administration officials say. The federal role in subsidizing a nationwide rail passenger system and a freight system will be examined anew this year, starting with the administration's fiscal 1980 budget recommendations due next Monday. The budget proposal, which will call for a reduction of federal expenditures, should set the stage for the debate.
"Up to now, rail passenger service has been viewed as something indisputably necessary at whatever level of subsidy is required," one source said. "Dollar costs have risen high enough now that the going assumption is being called into question."
While opposition to deregulation of the railroad industry is expected -- from some of the railroads themselves and from "captive shippers" such as those who must ship coal and other large-bulk commodities and feel they have no real options to sometime-monopoly rail service -- there is considerable support, probably from a majority of the railroads, for removing the ICC from their business decisions.
Their activities -- almost 100 percent regulated by the federal agency -- have yielded them a collective rate of return of less than one percent the last couple of years, and they claim there is no way to raise the needed capital for improvements under the current regulatory climate.