Statement on Signing the ICC Termination Act of 1995

I have today signed into law H.R. 2539, the "ICC Termination Act of 1995." In my State of the Union address this year, I called upon the Congress to terminate the Interstate Commerce Commission (ICC). I also called for further reductions in unnecessary regulations. This legislation is consistent with those goals, but it does not go far enough.

The bill eliminates the ICC, transferring many of its functions to a new Surface Transportation Board (STB) located within the Department of Transportation (DOT). The bill reduces some ICC functions, including those that overlap with DOT with regard to overseeing safety and insurance requirements in the trucking industry. With the sunset of the ICC and the consolidation of motor carrier functions at DOT, the bill will produce moderate budget savings.

The bill will also help provide a smooth transition now that appropriations for the ICC have been terminated. And the bill empowers the new STB to promote deregulation administratively on a case-by-case basis. I call upon the Board to use this authority to the fullest extent to benefit consumers and facilitate economic growth.

I am also satisfied that the Congress addressed my Administration's strong objections to earlier versions of this legislation, which would have severely curtailed labor protection for railroad employees adversely affected by certain railroad transactions, including mergers. And I note that the final version of the bill continues intact the important rail reforms of 1980, which have helped improve rail service and bring the railroad industry back to profitability.

Nevertheless, I am disappointed in this bill. While it eliminates the ICC, it creates a new independent agency, the STB, within the Transportation Department. Overall, the bill falls short of my Administration's much bolder proposal for extensive deregulation of transportation industries.

Regulatory reform of the Nation's transportation industries has been an outstanding success. Beginning with air cargo deregulation in 1977 and continuing with sweeping rail and trucking reforms over the past 15 years, much of the stranglehold of government regulation has been broken. Today, only about 20 percent of all domestic freight transportation is regulated, compared with 75 percent 20 years ago. These reforms have reduced the cost of transporting everything we buy and use. They have also enabled U.S. producers and retailers to employ "just in time" manufacturing and inventory systems to save many billions of dollars in warehousing and distribution costs.

The Congress had an opportunity to build on this success but, instead, provided for only very modest reform. While this legislation eliminates a number of obsolete and unnecessary functions of the ICC, it still exempts transportation industries from many of the disciplines of competition. These exemptions are no longer justified in today's strong and competitive market economy.

For example, the Nation's trucking industry has enjoyed antitrust immunity for collective ratemaking for the last 47 years. Continuation of this immunity reduces potential benefits to consumers and protects inefficient carriers. This bill also maintains special merger standards for railroads. The railroad industry should be subject to the same merger standards as other transportation industries.

The bill vests the Chairman of the Surface Transportation Board with the authority to appoint "officers and employees of the Board." The Appointments Clause of the Constitution, Art. II, sec. 2, cl. 2, permits the Congress to vest the appointment of inferior officers in the head of a department. Because the Board is "established within the Department of Transportation," it is a bureau or component of a department, and cannot be a department unto itself for purposes of the Appointments Clause. Accordingly, it would be unconstitutional for the Chairman to appoint persons to serve as "officers" in the constitutional sense. Therefore, I am signing this bill with the understanding that it does not authorize the Chairman to appoint "officers" in the constitutional sense.

The bill provides for the authorization of appropriations for the Board to expire after 3 years. During this period, my Administration will monitor the regulatory activities of the Board to determine whether it should continue and whether further reforms would be beneficial. My Administration remains committed to continued deregulation of the transportation industry.

WILLIAM J. CLINTON

The White House,

December 29, 1995.