Deregulating Transportation

June 22, 1979

Report Outline
Rising Support for Deregulation
Evolution of Regulatory System
Impact of Airline Deregulation
Special Focus

Rising Support for Deregulation

Inflationary Impact of Federal Controls

Reacting to complaints about the rising volume and costs of federal regulations, Congress and the White House are searching for ways to take the government out of the regulation business. Congress passed legislation last October that will eventually end most federal regulation of commercial passenger airlines. A top priority of the Carter administration, the new law is intended to increase airline competition by phasing out most fare and rate controls. Already some ticket prices have fallen as airline companies compete with each other for new business. And instead of disaster — as some airlines had predicted — the industry has prospered as both ridership and profits have increased.

Buoyed by the apparent success of the airline deregulation act, the administration is trying to convince Congress to deregulate the nation's freight railroad and trucking industries. The Senate Commerce Committee has scheduled a hearing for June 26 on various trucking deregulation proposals including one introduced by President Carter and Sen. Edward M. Kennedy, D-Mass. A plan drawn up by the administration to sharply curtail regulation of freight railroads was the subject of hearings earlier this year before the Senate Commerce Committee's Surface Transportation Subcommittee and the House Commerce Subcommittee on Transportation.

Some form of railroad deregulation is considered likely to emerge from the 96th Congress. The outlook for trucking deregulation is much less certain. While the railroads generally want to be deregulated, the trucking industry is fighting the attempt to make the industry more competitive. Because federal regulations limit new entry and keep rates high, many existing firms are content with the status quo. Another stumbling block for trucking legislation is the powerful International Brotherhood of Teamsters, the nation's largest labor union. The Teamsters strongly oppose deregulation because they fear it may result in job losses for their approximately two million members.

ISSUE TRACKER for Related Reports
Air Safety and Security
Motor Traffic Safety
Motor Vehicles
Regulation and Deregulation