If one of the very first votes--on Magnuson's entry amendment-- signaled deregulators' surprising strength, then the last vote of the day confirmed it. Ernest Hollings (D-S.C), who had emerged as the most outspoken opponent of deregulation, proposed to remove the provision of S. 2245 that would bar truckers from setting single-line rates collectively. In a lively debate, Hollings described himself as a "born-again regulator" because of the loss of airline service to his state following deregulation of that industry. Packwood argued that the antitrust provision was the most crucial section of the bill, and Cannon said that, "contrary to what many people think, this is not a radical proposal. ..."
There was high tension in the packed room as Cannon polled the committee members, and both sides heard senators they thought were with them vote the other way. The biggest surprise of all came when Sen. John Warner, on whom the ATA had counted, voted nay. The final tally was nine to eight against the amendment, but Hollings maneuvered for a reconsideration--to be taken up on day two of markup the following week--so the truckers stayed alive on that, their most important issue.
Deregulators were elated when the first day of markup ended. Goldschmidt praised the committee members for having "successfully resisted efforts so far to water [S. 2245] down." Cannon and White House officials said that their nine votes on the Hollings amendment were firm, but they braced for a weekend of intense lobbying by both sides before the final votes would take place.
The truckers were surprised by their setback but hopeful they could recoup their losses the following week. When asked his reaction to the day's events, the head of the Oregon Truckers' Association said, "At the end of the first round, the score is Christians 2, Lions 10."
Markup-Day Two
"I can't remember more intensive lobbying," said a twenty-five-year Capitol Hill veteran at the weekend's close. Letters and telegrams flooded committee members' offices following the first markup session. Some Senate staffers reported receiving 500 pieces of mail, mostly from critics of deregulation hoping to reverse the close vote lifting antitrust immunity. Industry supporters crowded the halls of the Senate office buildings; 150 representatives of trucking companies visited the office of Kentucky Democrat Wendell Ford, considered a possible swing vote. Some Senate staff members stopped answering the telephone at their homes and offices due to the barrage of calls.
While deregulators didn't match the sheer volume of letters and calls by opponents of reform, they brought out several high-powered weapons of their own. President Carter called John Warner to ask him to hold his position on the antitrust vote. And both the New York Times and the Washington Post published editorials calling for a strong bill. The Post editorial, which appeared the morning of the second markup session, turned the spotlight directly on one critical senator: "Industry lobbyists have tried hard to change the minds of some members of the Commerce Committee, in particular that of Sen. John Warner of Virginia, before the final vote, which is scheduled for today."
A standing-room-only crowd jammed the committee room to witness the results of the weekend lobbying. At the day's end, deregulators had largely held their ground and even gained some. But the final, thirteen-to-four vote to approve the bill did not reflect the heated debate and dramatic, last-minute maneuvers.
The committee first reconsidered the Hollings amendment on antitrust immunity. In response to Hollings's arguments, Packwood said he saw "no reason why we should be controlling capitalistic acts by consenting adults." The committee agreed with him by a nine-to-seven vote. Sen. Russell Long (D-La.), who had supported Hollings on the earlier, nine-to-eight vote, was absent. However, deregulators received his proxy vote on subsequent amendments as the result of negotiations minutes before markup began.
Cannon and Packwood more narrowly rebuffed another attack on the antitrust provision when the committee defeated nine to eight an amendment offered by Nancy Landon Kassebaum (R-Kan.) to make the phase-out of immunity subject to a one-house legislative veto. The key vote against Kassebaum's amendment--which would have effectively gutted the antitrust provision of S. 2245-came by proxy from Senator Ford, who had previously supported the truckers on that issue.
A maneuver by Cannon's chief of staff, Aubrey Sarvis, accounted for Ford's seeming turnaround. Shortly before the session began, when Sarvis learned of the amendment Kassebaum was to offer, he recalled that Ford was strongly opposed to the legislative veto. Last-minute calls to Ford's staff moved the Kentucky senator's vote to the reform column.
In addition to preserving the ban on antitrust immunity, the committee added several strengthening amendments to the bill. A milder version of Stevenson's earlier proposal passed by a hefty ten-to-five vote, despite Hollings's contention that it would divert $4.5 billion of business from regulated carriers. The resulting amendment exempted processed food (the original amendment also included nonhazardous chemicals, fertilizers and farm machinery)-a severe blow to the specialized carriers within the regulated industry.
Deregulators lost ground on only two, secondary provisions during the final markup session. After an hour-long debate, committee members voted nine to five to strike the amendment by Schmitt that would have allowed virtual free entry for carriers serving "small" communities. More significant, the committee accepted an amendment by Danforth to index the zone of pricing freedom so as to factor inflation into rate increases. As a compromise to Cannon and others who feared that the indexing proposal would "take the lid off" trucking prices, Danforth agreed that the provision would not take effect before July 1, 1983, the date for revoking antitrust immunity.
Responses to the committee's action were immediate. Carter issued a statement praising committee members for a "first rate... reform bill" that would "save consumers millions of dollars." Goldschmidt called it "exceptional." ATA's Whitlock said "the only winners are inflation and increased fuel use." Whitlock's subsequent message to ATA members was equally dour: "It is obvious that S. 2245 as it came out of the Commerce Committee cuts the heart out of regulation. It is just that simple."
When his committee approved S. 2245, Cannon optimistically predicted rapid and favorable action by the full Senate. He and other reform supporters hoped to have the Senate vote on the bill before its Easter recess, when members would return home to their districts and confront grassroots opposition to trucking deregulation. For the same reason, industry supporters preferred to delay the vote. The ATA had other concerns as well, however, which led the group to call Cannon the week after markup and propose a procedural compromise.
The ATA offered to go along with early floor action in return for limiting the agenda of votes. The industry group hoped to avoid a Senate record vote on some issues that might be defeated-particularly antitrust immunity. "I'm a realist," Whitlock told reporters. "I don't believe in butting my head against the wall. I'd rather go to conference without a mandate from the Senate." Moreover, ATA lobbyists wanted to focus their efforts on -defeating a few critical provisions-=in particular the expanded food exemption. Because that provision hit a major segment of the industry very directly, it threatened to divide the ATA from within.
Cannon found the offer to deregulators' advantage as well, but he encountered certain obstacles to accepting it. Packwood and Schmitt both wanted to propose floor amendments. In addition, Kennedy was considering a floor amendment to eliminate joint-line antitrust immunity. Eventually, both sides worked out an acceptable "time agreement" which allowed certain amendments and precluded others. By the time the agreement was reached, Senate action was unavoidably delayed until after Easter recess. But both sides used the additional two weeks to lobby intensively. As the climax to its effort, the ATA block-booked 500 hotel rooms and arranged to have trucking executives from all across the country arrive in Washington in time to lobby their senators before the vote.
When the Senate returned from Easter recess on Tuesday, April 15, the trucking bill was the first item to be considered. The Democratic leadership moved it a day ahead of schedule partly to avoid the expected onslaught of truckers. Nevertheless, 400 to 600 industry representatives were in town, and many of them watched the six-hour debate from the Senate gallery.
A single vote was all-important. In the five weeks following markup, the ATA had put nearly all its effort into defeating the Stevenson provision. (The group placed a full-page ad in the Washington Post the day of the Senate vote designed to show "just . . . what bargain regulated truck transportation is for... processed foods.") Thus, that issue was destined to decide the fate of the entire bill. A drafting error made the debate even more dramatic than either side expected.
Ernest Hollings offered the amendment to strike the expanded exemption. The South Carolina senator charged that "if we take this 202 million tons of business out of the regulated system and hand it over to [the] extremely unstable and undependable [unregulated] sector of transportation, we will in effect destroy the regulated system's ability to operate." Hollings called it "an invitation to tragedy ... for the sole purpose of satisfying a blind dedication to the ideology of deregulation."
In a spirited defense of regulation, Hollings responded with sarcasm to Stevenson's "great to-do about the bureaucratic niggling" over what is exempt and what is not:
[Senator Stevenson] presents us with the definition of three commodities. The first two are hay, which is exempt unless it contains 3 percent of molasses by weight, and manure, which is exempt unless it is fermented in "rich liquor." Now I can only speak for myself, but my taste in food does not run to hay or manure, no matter how rich the liquor. Perhaps the Senator has been approached by a special interest group representing the dietary tastes of horses and soybeans.
Two punches caught Hollings off guard. Cannon threw the first-in response to Holdings' oft-made charge that airline decontrol had severely hurt his own South Carolina and other heavily rural states, and that trucking reform would do the same. Cannon produced a recent letter from the governor of South Carolina to the chairman of the CAB applauding the opportunity presented that state by airline deregulation.
The second punch was more serious. Senators Stevenson, Cannon, and Packwood all noted individually that Holdings' amendment, as drafted, not only would remove processed foods from the exemption but would actually regulate unprocessed food. Cannon was indignant:
After finally seeing this amendment I am appalled to learn that this would actually lead to the regulation of commodities that are not now regulated. Thus the amendment not only eliminates a reform, but would turn the clock back 25 years.
Here are the commodities that would be reregulated ...: Cooked fish, dressed poultry, frozen poultry, cream cheese, butter, ginned cotton, rail ties, shredded bark, and 300 other items.
Cannon allowed as how the mistake was made "perhaps inadvertently," but the suggestion of trickery was unavoidable.
Hollings, who had earlier brushed off attempts by Commerce Committee staffers to tell him of the drafting flaw, stridently denied that his amendment reregulated anything. But the damage was done. The Senate rejected Holdings' amendment in a dramatic forty-seven-to-thirty-nine vote. Advance vote counts by both sides had loosely predicted that the amendment would lose narrowly; nevertheless, ATA lobbyists could name several senators whose votes were lost because of the disagreement.
The remainder of the debate on S. 2245 was anticlimactic. An amendment by Magnuson to gut the entry provision was defeated fifty-six to thirty-four following Cannon's blunt appraisal of that reform: "If there is one single provision that must remain intact in this legislation, in my view, it is the entry section. It is on this section that all... other provisions of the bill rest." The sure-to-lose amendment to eliminate all antitrust immunity was never offered. Its chief proponent, Edward Kennedy, was in Pennsylvania campaigning for the Democratic presidential nomination. By a lopsided count of seventy to twenty, the Senate approved the final bill, thus voting to relax forty-five years of government regulation.
When the vote ended, administration officials emerged beaming from the vice-president's office in the Senate, where they had been following the floor debate. A joyous Alfred Kahn ran to greet the staff counsel, Will Ris, as he came out of the Senate chamber. At a press conference with Packwood, Kahn, and Goldschmidt, Cannon was careful to describe his legislation as a "compromise, not a deregulation bill." But Secretary Goldschmidt spoke for the administration when he called it a "magnificent effort."
While the truckers had ample cause for gloom, they could take heart in the response of another group to the Senate's action: The day after the vote, House Public Works staff members sent their counterparts on the Senate Commerce Committee a large, dressed turkey wearing the tag "S. 2245."
Cutting the Deal
Even before the Senate Commerce Committee had completed its markup of the trucking bill in early March, Rep. Jim Howard announced that he might propose legislation calling for "total deregulation." "There doesn't seem to be a need for that much regulation," Howard said. "Maybe we ought to look through the other end of the telescope."
Howard's announcement came immediately after an editorial in the New York Times described the Public Works bill as "so limp that even opponents of deregulation tacitly support it." Howard's aides insisted he was sincere, but supporters of reform, who themselves opposed "total deregulation" without a substantial transition period, suspected that he was setting up a straw man to knock down with a bill more acceptable to the trucking industry.
Howard quickly abandoned his plan for total deregulation under pressure from both regulatory reformers and the ATA, which feared it would backfire. Shortly after the full Senate approved S. 2245, Howard told a reporter that using that bill as the vehicle for markup in his subcommittee "may be the way to go." He said the Senate had gone far in removing federal regulation, but "not so far as to create chaos" in the trucking industry.
Pressure from the ATA helped convince Howard that using S. 2245 was not "the way to go." Instead, he proposed an industry-backed compromise between the House bill and S. 2245, in the hopes that Public Works could come up with a bill that the Senate would agree to accept without change. That unusual result would avoid a House-Senate conference and, among other things, eliminate the danger that conferees would deadlock and leave the ICC free to act independently. Further commission reforms, and the prospect of broad-scale ICC deregulation after June 1 absent legislation, made compromise suddenly desirable to the ATA.
The next four weeks saw intense negotiations, primarily between the Public Works Committee leadership and the administration and Senate Commerce Committee leaders. President Carter conferred personally with Representatives Johnson and Howard in the White House at a point when the discussions appeared to be deadlocked. In early May, the Public Works staff issued a draft bill, and the negotiations intensified around that document as the scheduled date for subcommittee markup-May 20-approached. Shortly before markup, Public Works leaders reached a compromise with the Senate Commerce Committee and the administration. Cannon and Packwood agreed to recommend that the Senate accept the compromise without a conference if it was passed by the House without substantial change.
The heart of the compromise was a trade-off of the expanded agricultural exemption for antitrust immunity. The Public Works bill retained the provision eliminating immunity for single-line ratemaking, but with a six-month delay in the phase-out. In exchange, the Stevenson exemption of processed food was replaced with a provision allowing owner-operators to haul processed food subject to certain restrictions: The owner-operator had to be the actual driver, which limited the provision to one-truck operations; and processed food could account for no more than 50 percent of his annual haul. The entry standards in S. 2245 were modified in the compromise bill, and the indexing provision was altered so as to take effect before, rather than simultaneously with, the elimination of single-line immunity. In most other respects, the compromise bill was identical to S. 2245.
Many shipper and consumer groups were disappointed in the compromise, fearing that the revised entry standard was dangerously ambiguous. Moreover, the indexing provision was a concern to shippers, who thought it would be inflationary. But administration officials contended that the compromise entry standard was no worse, and possibly even better, than the Senate's provision. Overall, they--and many other deregulators--regarded the compromise as "a bill with real substance, real gain."
The "Delicate Balance"
At the subcommittee markup on May 20, the compromise bill was accepted without substantive change. Repeated efforts to amend the bill were defeated after key committee members--Representative Howard, ranking minority member William Harsha (R-Ohio), and Bud Shuster (R-Pa.)--opposed them on the grounds that, however meritorious, they would upset the "delicate balance." "I've never felt that so many people agreed with me in principle but voted against me," said one committee member when his amendment was summarily defeated. After Allen Ertel (D-Pa.), an ardent deregulator, suffered the same fate, he said in exasperation, "This is not a conference committee Are we going to legislate here a bad bill so we don't have to go to conference?"
The full committee markup two days later was also "greased." The "fragile compromise" proved so solid that one Public Works member remarked it was the first time he had seen a bill pass conference and be signed by the president before it emerged from committee. The only significant amendment added agricultural limestone, soil conditioners, and fertilizers to the list of exempt commodities-a change worked out the previous day during a marathon negotiation session in order to appease major farm groups.
Most of the debate centered on a provision in the bill tangential to the deregulation compromise that allowed grocery stores to negotiate with food manufacturers for lower prices if the stores picked up the food themselves at the manufacturer's dock. The provision, supported by the Food Marketing Institute, was retained despite opposition by the powerful Grocery Manufacturers Association.
Also controversial was an unsuccessful attempt by Rep. Elliott Levitas (D-Ga.) to add a legislative veto provision that would allow one chamber of Congress to overturn ICC regulations. Levitas, a strong proponent of the legislative veto, noted that "our distinguished colleagues across the Capitol are no longer virgins on this," referring to the Senate's recent approval of a two-chamber veto over Federal Trade Commission regulations. Representative Harsha said the administration and Senate would oppose any compromise bill that contained such a provision. "Just because they yielded on one occasion doesn't mean they're willing to give birth to quintuplets," Harsha retorted.
The committee's action brought immediate praise from all sides. Goldschmidt said the bill would "inject a new competitive spirit in the trucking industry that will lead to lower transportation costs and better service." And Bennett Whitlock congratulated the committee for the "balanced approach" it had taken in the bill. "We will, of course, resist any further substantive changes in the bill," he added.
Preserving the "Fragile Compromise"
As the trucking bill moved to the full House, the administration and the Senate Commerce Committee found themselves on the same side as the ATA in resisting substantive changes that would unravel the compromise and require a House-Senate conference committee. Both sides hoped to take the bill to the House floor in early June. "Every day that goes by gives someone an opportunity to think of something new," said Representative Howard, referring to the potential for damaging amendments. But House Speaker Thomas O'Neill (D-Mass.) sidetracked most substantive legislation until Congress had resolved a major budget dispute and passed needed appropriations bills.
Three possible amendments by groups not part of the "delicate balance" threatened to upset the compromise. The Teamsters hoped to amend the bill on the floor of the House so as to give drivers laid off because of deregulation the right of first hire by other firms and to set up a $100 million fund to pay dislocation benefits. The ATA, representing many nonunion firms, said it would oppose any bill that contained such a provision.
Consumer, shipper, and farm groups-led by the American Farm Bureau Federation-sought to restore the exemption of processed food through a floor fight. (The Farm Bureau had earlier agreed to the compromise, but a planned committee amendment on another issue freed the group to seek changes on the House floor.) While administration members and Commerce Committee leaders supported the effort in principle, they were bound by their agreement with Public Works to oppose it.
But the most serious threat to the compromise was Levitas' planned amendment to provide for a legislative veto. The House had never defeated a provision for a one-chamber veto, and the principle was at stake, even though the practical effect would have been to slow ICC deregulation rather than inhibit new regulation-Congress's usual objective with the veto.
When the trucking bill finally came before the full House for action, on Thursday, June 19, none of the efforts at amendment proved a match for the "delicate balance." The Teamsters' proposal, offered by a first-term congressman, was defeated by voice vote. Congresswoman Millicent Fenwick (R-N.J.) led the fight to restore the Stevenson food provision. Her amendment was easily defeated--287 to 113. In the only dramatic vote, the House rejected the Levitas' amendment--192 to 189.
The House passed the final bill by a lopsided 267-to-13 vote. Twenty-four hours later, a Senate working late on a Friday night approved the House changes in less than two minutes by voice vote. Only the festivities remained.
"Historic Legislation"
On a cloudless morning-the first day of July-President Carter signed the Motor Carrier Act of 1980 in the Rose Garden. Carter was flanked by key congressional supporters of the bill, including his campaign rival, Edward Kennedy. Several hundred invited guests-lobbyists, Capitol Hill staffers, and others-watched the ceremony from chairs set up on the grass.
The occasion was ripe for humor about the rivalry between Carter and Kennedy. Before the president joined the assembled group, Kennedy stood directly behind a chair provided for Carter to use while signing the bill. When he spotted some of the reporters who had been covering his presidential campaign, Kennedy caressed the back of the chair with the hint of a smile. After Carter introduced Kennedy with strong words of praise, the senator began with a quip. "Well, there's no debate on trucking deregulation," Kennedy said, referring to his unsuccessful efforts to get Carter to "come out of the Rose Garden" and debate him on television.
"This is historic legislation," Carter told the group. "There is no other nation on earth that depends as much on motor carrier transportation for its economic life's blood." Carter said Congress's action would "bring the trucking industry into the free-market system where it belongs," and he predicted that the legislation would reduce consumer costs by as much as $8 billion a year and save hundreds of millions of gallons of gasoline annually.
But Carter also looked backward. "A year ago at the White House, I proposed broad changes in the regulations that deal with the trucking industry. People said then that it was impossible to pass a trucking deregulation bill because of the powerful political forces involved and the controversial nature of this kind of legislation. That I'm signing this bill into law today ... is a tremendous credit to all those who worked so closely with me in devising and in passing this legislation."
