Anticipating Rail Regulation and Grantmaking in the Second Trump Administration
Of all the presidential cabinet positions, secretary of the U.S. Department of Transportation (DOT) has been among the least partisan in the 21st Century. President Geoge W. Bush selected a Democrat as his first Transportation Secretary (Norman Mineta). President Barack Obama returned the favor by selecting a Republican (Ray LaHood). Though President Donald Trump selected a Republican in his first term, Elaine Chao was a former cabinet secretary in the George W. Bush Administration and the wife of Sen. Mitch McConnell (R-Ky.). She embodied the establishment wing of the Republican Party, which was a form of intraparty reaching across the aisle. President Joe Biden selected Pete Buttigieg, who had greater political identification having run for president but was from the moderate wing of the party with a reputation as a technocrat.
One rung below Transportation Secretary, the modal administrations that comprise the DOT tend to draw less political attention, but this is the level at which the federal government is administered, and changing administrations can mean changing points of emphasis and regulations.
President-Elect Donald Trump has appointed David Fink as the new administrator of the Federal Railroad Administration (FRA). Fink is a fifth-generation railroader with more than 45 years of experience in the transportation industry and was most recently president of Pan Am Railways, a midsized Class II railroad in New England that was acquired by CSX in 2022. Notably, Pan Am hosted Amtrak's Downeaster service between Boston and Maine. He brings rail knowledge and experience, and his appointment has been met with support from industry stakeholders.
FRA has seen a tremendous expansion in grantmaking responsibility in recent years. Grants are often critical for Class II and Class III to fund rail improvements, which Mr. Fink has experienced firsthand. Billions of dollars have also been awarded to projects that impact passenger rail, especially related to the Northeast Corridor. Shifting priorities in a new administration may affect the amount of new grants and the types of projects that receive grants.
Focus on Regulation
Though rail issues rarely get much political attention, one potential exception could be the Railway Safety Act, a proposed Senate bill from 2023 that was cosponsored by Vice President-Elect J.D. Vance and others following the train derailment in East Palestine, Ohio, and would impose additional requirements on railroads. However, President-Elect Trump has called for removing 10 regulations for every new regulation implemented and proposed a nongovernmental Department of Government Efficiency (DOGE), the mission of which is to identify and eliminate unnecessary regulations across various sectors. A "10 for 1" policy and the creation of DOGE do not preclude passing some version of the proposed Railway Safety Act, but they are directionally inconsistent with one another and present, at a minimum, substantial headwinds to imposing additional requirements on the railroad industry.
Balancing competing priorities will be a key task for Fink as he takes the FRA helm. Ensuring that rail safety is not compromised while pursuing regulatory efficiency will require careful consideration and collaboration with lawmakers, industry stakeholders and the public.
One example of these competing priorities is the two-person crew requirement, which was issued by the FRA in April 2024. The rule, which mandates two-person crews for most trains, has faced legal challenges from several major railroads, which argue that the rule is unnecessary and lacks supporting safety data.
Given President-Elect Trump's deregulatory agenda, there is a possibility that his administration might target the two-person crew requirement for repeal. This would align with his broader goal of reducing regulatory burdens on industries. However, any attempt to repeal the rule would likely face opposition from labor unions, which argue that two-person crews are essential for rail safety. If not resolved by the legal battles currently surrounding the rule, the outcome will depend on how the administration resolves the tensions between a deregulatory agenda and populist instincts.
20 Posts in 20 Days Leading to Inauguration Day on Jan. 20
Holland & Knight's Transportation & Infrastructure Industry Sector Group is prepared to assist industry clients in adapting to the anticipated changes by the new administration. Our team is writing new blog posts each day leading up to President-Elect Donald J. Trump's inauguration, with insights regarding likely impacts on the various segments of the industry, including Aviation, Construction, Maritime, Freight Rail, Motor Carriers, Transit and Autonomous Transportation. Bookmark our Election Impacts on Transportation & Infrastructure resource page to follow along.