Rail stakeholders see promise and peril in Biden’s infrastructure push

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Rail freight stakeholders have viewed favorably the prioritization of freight rail transport in transport infrastructure provisions in President Joe Biden’s 10-year $ 2 trillion over 10 years. American employment plan. But some are worried about its price and what projects they see as unrelated to infrastructure.

“The OneRail Coalition commends the administration for prioritizing rail as part of President Biden’s infrastructure proposal and for recognizing the role of rail in solving climate problems. Rail is an essential part of strengthening the economy and growing jobs, as well as tackling climate change and road congestion, ”said Anne Canby, director of the OneRail coalition. Coalition members include Amtrak, Association of American Railroads (AAR), American Short Line and Regional Railroad Association (ASLRRA), and Railway Supply Institute (RSI), among others. Membership also includes worker groups such as the Brotherhood of Railroad Signalers and the SMART-Transportation Division.

The jobs plan, which also calls for the renewal of the electricity grid, the provision of high-speed broadband to all regions of the United States and the provision of clean drinking water, is part of the efforts by congressional leaders to pass railcar recycling and railroad crossing legislation (see below). .

The plan is to increase corporate taxes from the current 21% under the administration of former President Donald Trump in 2018 to 28%. If Congress accepts this as is, the plan could be fully paid off within 15 years, according to a White House backgrounder on the plan.

But the proposed increase in corporate taxes is giving some business groups a break.

“President Biden’s proposal clearly shows his administration’s priority to make these much-needed investments to restore our highways, bridges and roads, and improve our ports,” said AAR President and CEO Ian Jefferies in a separate announcement.

“At the same time, mission number one is fueling an economic recovery. The railways would urge the administration and Congress to abandon these divisive and independent sources of funding and instead work towards bipartisan solutions to restore the Highway Trust Fund to a true user-pay system, ”said Jefferies, referring to the fuel taxes that the federal government collects in order to pay for federal transportation infrastructure initiatives. Some have argued that the Highway Trust Fund has deviated from its original objectives because it funds a number of non-road programs.

Mentionned National Retail Federation President and CEO Matthew Shay, “Investing in infrastructure must be a priority, but this legislation appears to be less focused on improving infrastructure and much more on a political agenda at the expense of economic policy healthy that benefits all Americans. ” Shay did not specify which elements could be more politically motivated.

Others have taken a more wait-and-see approach to how the White House, Congress and special interests will craft the plan.

“We look forward to working with the Administration and Congress in a bipartisan fashion as they develop and consider this proposal,” said Chuck Baker, President of the American Short Line and Regional Railroad Association.

Others have taken note of how the White House expects to meet the US port infrastructure needs.

“We look forward to working with the White House and Congress to modernize our ports and transportation channels, pass reforms to promote competitive and reliable freight rail service, and bring trucking regulation into the 21st century so that our industry can provide the essential products on which Americans depend. every day, ”said American Board of Chemistry President and CEO Chris Jahn.

He added that his group had “serious concerns” about the plan’s proposed corporate tax provision, which he said could “make America less competitive, stifle innovation and interfere with our ability to to invest, to innovate, to create jobs and to supply technologies that will be essential. improving infrastructure, clean energy and climate solutions. “

Coalition for the transportation of soybeans Executive Director Mike Steenhoek praised Biden’s efforts to address infrastructure needs in a comprehensive bill. But he was also concerned that the bill contained too many partisan elements, which would make it more difficult to pass. Steenhoek did not specify which elements could be considered more partisan.

“Given how Republicans and Democrats broadly agree that improving infrastructure is a legitimate use of government resources, there is a unique opportunity to achieve something important on behalf of the American people in a collaborative and bipartisan way if the focus remains on improving roads, bridges, inland waterways, ports, railways, etc. »Steenhoek said. “It worries me that the proposal goes beyond what most Americans would define as ‘infrastructure’. Whenever legislative proposals and initiatives – especially the more controversial ones – become attached to a particular plan, the prospects for final adoption generally decrease rather than increase. “

Steenhoek called for a plan that would meet the infrastructure needs of rural and urban America, including infrastructure investments in ports and inland waterways.

The America Jobs Plan calls for investing $ 621 billion in transportation infrastructure and resilience.

For passenger and freight rail transport in particular, the plan seeks $ 80 billion to “close the backlog in Amtrak repairs; modernize the high-traffic northeast corridor; improve existing corridors and connect new pairs of cities; and improve grant and loan programs that support the safety, efficiency and electrification of passenger and freight railways. “

Non-transportation initiatives under the $ 2 trillion plan include $ 400 billion for home care services for the elderly and people with disabilities; $ 300 billion for manufacturing support; $ 213 billion for affordable housing; $ 111 billion for drinking water infrastructure; and $ 100 billion for the power grid and power infrastructure.

Railcar recycling legislation, creation of a database on level crossings

As the White House prepares to negotiate the infrastructure plan with Congress, leaders in Congress have introduced a handful of rail-related bills.

Among them, the bipartisan reintroduction of the law on assistance and rail freight investments to launch the law on activity and recovery from the coronavirus era or the law on rail transport of goods.

The bill, introduced Monday by representatives Brad Schneider, D-Illinois, Darin LaHood, R-Illinois and 10 other members of the House of Representatives, provides for a time-limited tax credit of 50% for the purchase new freight wagons or renovation. existing freight cars that result in an improvement in capacity or fuel efficiency of at least 8%, depending on the Railway Supply Institute (RSI). The bill also provides for separate tax credits for the scrapping of railcars based on their depreciated value and for capital expenditures on equipment or technological improvements that improve environmental standards or safety, quality or efficiency of railcar manufacturing and repair operations, RSI said.

“The Freight RAILCAR Act will help spur private investment in the freight car manufacturing industry to preserve thousands of American jobs, reduce our carbon footprint and ensure the integrity of our critical rail supply chains. This legislation would provide incentives for new and sustained investment to help stabilize the freight car manufacturing industry during this critical time, ”said Nicole Brewin, senior vice president of government and public affairs at RSI.

Other bills that have been introduced include S. 700, which aims to create a portal and database to receive and update information regarding blocked crossings between railways and highways and to require the Secretary of Transportation to assess the requirements of the railway and highway grade crossing program; and S.468 or the Railway Innovation Rehabilitation and Financing Act. This bill aims to provide loans for the construction of new intermodal or freight rail facilities.

The S. 700 was presented by Senator Deb Fischer, R-Nebraska, on March 11, and the S.468 was presented by Senator John Thune, R-South Dakota, on February 25.

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