GOVERNMENT : Transport Industries Gear Up to Fight Effort to Derail ICC

Since 1980, the Interstate Commerce Commission has degenerated from lame duck to dinosaur in the minds of its critics. But to Chairwoman Gail McDonald, the nation’s oldest regulatory agency is on the fast track to the future of government.

“This agency is what Americans want from government,” McDonald said. “We are a small, responsive, specialized agency. We reinvented reinventing government.”

House and Senate budget trimmers say the 107-year-old agency, which oversaw nearly all of the nation’s surface transportation in its heyday, is obsolete and should be abolished now that the railroad and trucking industries have been deregulated.

Rep. John R. Kasich (R-Ohio) spearheaded an amendment this month to eliminate the agency’s $47-million budget and fold its functions into the Transportation Department. The House approved the amendment, which had been defeated twice before, by a 234-192 vote, sending the measure to the Senate.

But ICC critics could be derailed by interests backing the agency--an obstacle encountered nearly every time Congress attempts to streamline the budget.

Railroad and trucking industry leaders, who say they were blindsided by the House vote, are scrambling now to rescue the agency in the Senate, which has traditionally protected ICC independence.

“There is a tremendous amount of expertise built up in the ICC,” said Ed Harper, president of the Assn. of American Railroads, which represents the nation’s freight lines. “It still stands ready to step in if rates go beyond the maximum appropriate limit.”

American Trucking Assn. President Thomas J. Donahue said the trucking industry “as a whole cannot support a chaotic situation in which carriers are obligated to comply with rules that no one is around to administer.”

Created in 1887 to check railroad monopolies, the quasi-judicial commission once had authority that rivaled that of the Supreme Court. Any company that wanted to operate a rail line or buy track during the era of westward expansion had to win approval from the commission, which also set railroad rates, established time zones and regulated the market.

But its purview narrowed in the early 1980s with deregulation of the trucking and railroad businesses. The agency still licenses truckers, oversees trucking and railroad company mergers, determines railroad track rights and has some authority over trucking rates. Its staff has shrunk to just 614, down from its peak 2,500 in the early 1960s.

The Clinton Administration, which courted organized labor during the President’s 1992 campaign, announced its strong opposition to slashing the ICC, saying Vice President Al Gore did not recommend eliminating the agency in his “reinventing government” initiative.

Kasich and other critics say the Transportation Department could absorb the agency’s duties, citing a similar action in 1983 when the department took control of the Civil Aeronautics Board. Eliminating the ICC would save taxpayers $25 million this year, Kasich estimated.

But McDonald contends that move would mean a loss of impartiality, especially in cases involving Amtrak. Folding its functions into the Transportation Department could bring more political pressure on decisions, she said.

Transportation officials have rejected proposals aimed at collapsing the agency. An assistant secretary testified before two House panels that the ICC is effective in overseeing those industries it regulates, intervening in the marketplace only when necessary.

A recent General Accounting Office study of the commission concluded that the rail regulatory functions should be independent of Transportation to preserve the integrity of agency rulings. GAO investigators found that slashing the agency’s budget would not save taxpayers any money.