AFTER PASSING a modest trucking deregulation bill last week, the House now moves on to confront the problems of the railroad industry. It has before it a bill to reduce the regulations affecting that industry and it should do no less for the railroads than it has done for the truckers.
There has been a lot of whining about both these proposals, just as there was about the airline deregulation bill that preceded them. In the case of the truckers and the Teamsters, who fear deregulation will break up the cozy arrangements that have been established over the years. In the case of the railroad bill, the main opponents have been those who make big shipments by rail, primarily the electric utility companies. They say they fear massive freight rate increases that will drive the price of electricity even higher than it is now.
The truth is that the costs of transporting coal from the mines to the power plants is so small a part of overall utility costs that freight rates could go up 100 percent without forcing up the average price of electricity in any part of the country any more than 10 percent. In addition, the bill now before the House is full of limitations on how high and how fast coal freight rates could rise, intended to make it impossible for the railroads to make a killing off the utilities and, ultimately, the consumers.
Like the trucking bill, the railroad bill's big weakness is that it does not go far enough in freeing up an industry that has been hobbled by government regulation for decades. The railroads are in terrrible shape, economically and physically. They need to make at least $5 billion in coal-related capital investments alone during the next five years if coal is to become a growing component of the national energy supply.
Congress can help that situation by easing the economic regulations and giving the railroads a chance to earn some of the money themselves. Or Congress can go on subsidizing the railroads at a steadily rising level. (It has poured $11 billion into freight and passenger programs in the last five years, and the 1981 budget provides another $2.3 billion.) With that kind of choice, the House should pass the proposed deregulation without weakening it by an iota.