An article yesterday understated the amount of federal diesel fuel tax paid by truckers. While the federal tax on gasoline used in most automobiles is 9 cents a gallon, the tax on diesel fuel is 15 cents a gallon. (Published 10/13/90)

As the House Ways and Means Committee rushed to complete its part of a budget bill late Wednesday afternoon, the trucking industry was ready with an ambush.

In a matter of minutes, a quick-strike lobbying strategy by the American Trucking Associations Inc. produced a vote in the closed session to impose a 9-cents-per-gallon diesel fuel tax on railroads, chief competitors of the truckers. Railroad supporters on the committee were caught off guard and could muster only a handful of votes against the amendment offered by a relatively junior Republican, Rep. Rod Chandler (Wash.).

The $288 million-a-year tax increase seems unlikely to survive at the 9-cent level as Congress completes a five-year budget plan. Already, the Ways and Means Democratic alternative developed late yesterday would impose only a 3-cents-per-gallon tax for railroads.

But the Wednesday incident shows that while Congress, the White House and most reporters focus on broad questions such as capital gains and the top tax rate on the wealthy, hundreds of lobbyists concentrate on matters that receive little publicity but are of prime importance to industries and pressure groups.

The coup by the trucking industry, however temporary, also illustrates that lobbying is not always a purely Washington game. The key player in this drama was a truck manufacturer that is the major employer in Chandler's western Washington district, PACCAR, which makes Peterbilt trucks, considered by many truckers to be the Cadillac of long-haul rigs.

"It's my Boeing," Chandler said later. PACCAR, he said, is as important to his district as the Boeing Co. is to Seattle, his neighboring district to the northwest. PACCAR employs 14,000 people, more than 3,500 of them in Bellevue, Wash. When PACCAR talks, he listens.

How did such a major tax increase slide through a committee that prides itself on a slow professional approach to tax matters?

For one thing, committee members had more important things on their minds. Hundreds of lobbyists and reporters crowded the hallways outside the packed room on the first floor of the Capitol building where the committee met, awaiting word of its action on $145 billion in other matters.

Committee Chairman Dan Rostenkowski (D-Ill.) was being pressured to go to the floor to manage a veto override vote on an entirely different matter.

"The mood of the moment makes all the difference in the world," said a staff member. "Don't expect too much logic."

"It wasn't an ideal format to debate the merits," said Rep. Jim Moody (D-Wis.), who hastily mounted an attack on the amendment but said he garnered only "eight or nine" votes.

"It did catch me by surprise," said Moody, a staunch railroad partisan who once was a fireman for the Pennsylvania Railroad in Buffalo, and who later taught transportation economics at the University of Wisconsin.

There also was the odd box in which the amendment put Democrats: A Republican had offered a tax-increase amendment.

The Democrats, said a staff member, "jumped on it."

Committee members also likely were affected by a campaign by trucking lobbyists, who had a 100-person phone bank urging truckers across the country to call their representatives in Congress.

But the source of the committee action was an intense battle between the truckers and the railroads that grows more bitter every day. It began earlier this year when railroads organized a major campaign to dissuade Congress from increasing the weight and length restrictions on trucks using interstate highways and escalated when the trucking association declared financial war on the railroads.

"If they're going to keep our costs high, then we're going to increase their costs," said Lana Batts, a trucking association vice president.

Truckers have cast the issue in terms of fairness. All versions of the budget bill hit them with a diesel-fuel tax increase. Railroads have traditionally paid no fuel tax on the grounds that since they own their own right of way they should not pay a tax into the highway trust fund to maintain highways for truckers. That tax now is 9 cents a gallon for motorists and truckers alike.

For the first time, Congress apparently will direct at least half the new gas and diesel tax revenue into the Treasury for deficit reduction rather than entirely to the trust fund. Truckers argued that railroads should be taxed the same amount as truckers for deficit reduction.

"We didn't think it was fair for the truckers to support deficit reduction if the railroads didn't support it," said Jack C. McRae, director of public affairs for PACCAR.

Railroad officials had privately told key members of Congress they would reluctantly accept that. Sources said the railroads were willing to pay that price to place themselves in a stronger "moral" position next year when Congress will consider highway legislation, including longer, heavier trucks.

But the Chandler amendment went much farther, shocking the railroads into action. By midafternoon yesterday, less than 24 hours after the committee vote, a high-powered delegation of railroaders visited Chandler, including William Dempsey, president of the Association of American Railroads, and representatives of railroad unions and major railroads including Union Pacific and Burlington Northern, another major employer in his district.

"Obviously, none of us is happy with having constituents angry," Chandler said. "And Burlington Northern is a major constituent."

Chandler said he is willing to work with railroads and truckers to develop a fair system of taxation, but "for now, I want to stick to my position."

As an afterthought, he said, "We're going to pass a fairy tale and send it to the Senate anyway."