By Oliver B. Patton, Washington Editor
There’s an air of resignation in Washington about the deep cuts in federal spending scheduled for March 1.
If sequestration happens, the cuts could affect $1.2 trillion in discretionary and defense spending. Highway safety and construction programs would be spared, for the most part, because their money comes through the Highway Trust Fund.
Congressional leaders and others are pessimistic about preventing the automatic, across-the-board cuts.
“We think these sequesters will happen,” Rep. Paul Ryan, R-Wisc., chair of the House Budget Committee, said on Meet the Press a week ago.
Ryan was politicking, blaming Democrats for the situation, but he is not the only one who is concerned. Sen. Lindsey Graham, R-S.C., told The Washington Post he thinks the cuts are more likely. And Sen. Carl Levin, D-Mich., told the Post that odds probably are even that the cuts will occur.
Steve Bell of the Bipartisan Policy Center, the former staff director of the Senate Budget Committee, thinks the risk of sequester is high.
“Our estimate, based a wide survey of senior congressional staff and some members, indicates that the odds of at least a partial sequester are very high and that a full sequester is a better than 50-50 proposition,” he said in a commentary posted on the BPC website.
The situation arises from a deal cut by Congress in 2011 to impose automatic, draconian cuts in federal programs if legislators could not agree on a plan to reduce the deficit by $1.2 trillion.
The theory was that the cuts would be so painful, particularly to defense, that Congress would be forced to act.
With the deadline approaching, however, there is no deal in sight.
Trucking Programs Mostly Exempt
According to an analysis prepared by the Congressional Research Service, the core motor carrier safety programs run by the Federal Motor Carrier Safety Administration are exempt from sequestration.
The same applies to programs administered through the Federal Highway Administration, and to operations and research at the National Highway Traffic Safety Administration, which regulates truck safety equipment.
These are not 100% exemptions, however. For instance, about 3% of FMCSA’s budget does not come through the Highway Trust Fund. This sparks concern in the safety enforcement community.
Steve Keppler, executive director of the Commercial Vehicle Safety Alliance, said sequester could create risk of furloughs among FMCSA staff, which might limit the agency’s ability to process safety grants.
Duane DeBruyne, a spokesman for the agency, acknowledged that the sequester exemption is not complete but said the shortfall would be slight and the agency is prepared.
“There is a fractional amount – less than $1 million from an overall agency budget of slightly more than $570 million – that potentially could be exposed should sequestration occur,” he said.
“The agency is confident that it has contingency plans in place to ensure that normal work-flow of services, functions and daily activities would not be disrupted.”
While these specific federal programs are protected, trucking shares the general economic risks arising from sequestration.
Bell of the Bipartisan Policy Center noted that the slowdown in business in the fourth quarter of 2012 is attributable in part to workforce reductions among defense contractors and sub-contractors in anticipation of sequestration.
That period saw the largest defense spending cut since 1972, said Bob Costello, chief economist for American Trucking Associations.
John Larkin, managing director of transportation equity research at Stifel, Nicolaus, also noted that defense-related shipments softened in the fourth quarter as contractors prepared for sequestration.
“It is not clear, though, that defense cuts would have a big, direct impact on carriers serving defense contractors,” he added.
Bill Wanamaker, director of government traffic and security operations at ATA, confirmed the point.
He said most of the defense cutbacks would be in new programs having to do with weapons and vehicles.
“If DOD wants to move freight, and there is a considerable amount of ‘retrograde’ freight, returning from battle theaters, then they have to pay for it,” he said.
“There may be some discretionary freight that could be postponed, but frankly, if a warrior needs it, we’ve got to move it, and DOD has got to pay for it.”
There still is a risk that sequestration would negatively impact the overall economy, according to Bell.
He said the Congressional Budget Office forecasts a 0.7% drop in GDP growth in 2013 due to the sequester’s effect on small businesses and government personnel.
He forecasts the loss of a million jobs if full sequestration occurs.
Larkin offered additional perspective.
“While sequestration may bring GDP growth down 100 to 200 basis points in 2013, the Sandy recovery and rebuilding effort, the rebounding housing market, and the recovering auto industry will combine to create a mediocre to lackluster demand environment in 2013, much like we have seen the past couple of years,” he said.
Supply and demand for trucking will remain more or less in balance this year, he said. “This is frustrating to truckers because just a normal recovery would have created a raging bull trucking market by now. It is within reach, but the seemingly perpetual, pathetically slow economic growth prevents the Golden Age for trucking from fully developing.”
Costello of ATA said that while there’s a significant risk to the economy from sequestration, it pales compared to the risk of not raising the debt ceiling.
“If they don’t raise the debt ceiling it means that the government can only spend what it brings in on any given day,” he said. “We think it would be the equivalent of a 40% cut in government spending almost overnight.”
That would send the economy over a cliff, which is why he’s been spending a lot more time on the debt ceiling than on sequestration, he said.
The deadline for raising the debt ceiling is mid-May.
By Oliver B. Patton, Washington Editor
A federal appeals court on Friday, January 25, 2013 ruled that President Obama exceeded his constitutional authority with three appointments to the National Labor Relations Board (NLRB) while the Senate was on break last year. This ruling casts doubt on hundreds of decisions the NLRB has made in the past year, ranging from enforcement of collective bargaining agreements to rulings on the rights of workers to use social media.
The ruling also raises questions about the recess appointment of former Ohio attorney general Richard Cordray to head the Consumer Financial Protection Bureau and about the actions taken by the agency during his tenure, including major new rules governing the mortgage industry. Obama named Cordray at the same time as the NLRB nominees, and his appointment is the subject of a separate lawsuit in D.C. federal court.
Options for the Obama administration include appealing to the full D.C. Circuit Court or to the U.S. Supreme Court. APSCU will monitor the Administration’s next move and will report back with the latest information.
On January 7, 2013, the Federal Motor Carrier Safety Administration (FMCSA) held a public listening session to solicit feedback for implementing an Entry-Level Driver Training (ELDT) rule. ELDT requirements would be in addition to requirements to acquire a CDL. FMCSA had proposed a rule in December 2007 which the driver education industry opposes the rule for requiring training institutions be accredited by a Department of Education-certified accrediting agency and for mandating training requirements based upon hours of instruction rather than trainee mastery of the skill taught, among other issues. However, the MAP-21 highway legislation requires FMCSA to promulgate an ELDT rule by October 2013 and FMCSA held this listening session as the first step in doing so.
CVTA would like to thank our "Dream Team" who attended the FMCSA Listening sessions in Charlotte.
John Frey, Werner Industries,
Representing Commercial Vehicle Training Association
Mark Greenberg, NETTTS,
Representing the Commercial Driver Training Foundation
Richard Reiser, Werner Industries,
Representing Werner Industries
Chuck Wirth, American Institute of Truck Driving School,
Representing Accredited Schools
Brad Ball, Roadmaster,
Representing Non-Accredited Schools
Under John Frey's guidance as Chairman of this committee, these CVTA members spent hours on numerous conference calls and personal time crafting the comments submitted. We would also like to recognize Chuck Wirth and Lou Spoonhour for updating our comments from 2007 and producing CVTA comments that ensure all our members are well represented. Other committee members include John Rojas and Cheryl Hanley.
We would also like to acknowledge Boyd Stephenson from ATA for his participation and guidance with this project. We appreciate ATA's support and especially Boyd's assistance on this project.
To watch our "Dream Team" you can click on the link below:
Also if you wish to review the comments submitted please click on the links below:
From: Cathryn Greene
Date: Wed, 30 Jan 2013 12:05:56 -0800
Subject: Another Scam in progress
We received a call today from a guy calling himself David Jenkins, from Marten Transport. It is the same old scam on the new graduates. He does not work for Marten Transport nor does Marten Transport hire without at least 1 year OTR experience.
I have spoke with Jill Larson at Marten and she has received other calls today from schools. Her contact information is:
(800) 395-3000 ext# 2404
Director of Operations & Job Development,
Truck Driving Academy, TDA Educational Systems, Inc.
Thanks for the Heads up!
The Truckload Carriers Association has named Mark Randall of Mesquite, Texas, a professional driver trainer for Werner Enterprises of Omaha, Neb., as its latest Highway Angel. Randall is being recognized for taking preventive measures that ultimately saved a life.
On Oct. 24, 2012, around 1:30 p.m., Randall and a student were headed westbound on I-80/680 in Omaha. With only two miles to go before dropping off a load, Randall was at the wheel. He stayed within the speed limit of 60 mph and made a mental note of the considerable traffic all around him.
To his right and up ahead, Randall noticed a motorcyclist who appeared to be following much too close to the car in front of him. He was also traveling about 60 mph. Randall's safety instincts kicked in, and he began to slow down.
"I always make a big point of being aware of my surroundings when I'm operating these vehicles," said Randall, who was recently recognized by his company for a million miles of accident-free driving and also received Werner's Humanitarian Award for his actions that day. "I pay good attention. In fact, I was just about to make my student aware of the possible hazard ahead when the motorcyclist suddenly accelerated and attempted to pass the car. But he was just too close and hit the rear of that vehicle."
Randall immediately began scanning the lanes for a way to get out of the path of the doomed motorcyclist. Surrounded by traffic, he knew that he could not suddenly switch lanes without putting other vehicles in danger. His only viable option was to stay put and maintain control of the tractor-trailer, which was fully loaded with thousands of pounds of tires.
As if in slow motion, Randall saw the motorcyclist hit the pavement hard and slide directly into his path. He immediately put on his flashers and continued to brake, finally coming to a controlled stop - within 10 feet of the man on the pavement.
The student got out to render aid, while Randall called 911. The motorcyclist had survived and was miraculously okay. Not only had Randall managed to avoid hitting the man, but he is also credited for using his truck to protect the motorcyclist from being run over by the oncoming traffic hurtling toward him at 60 mph.
At the accident scene, the responding state patrol officer made a joke, saying that the motorcyclist had been incredibly lucky that day and should probably continue that luck by purchasing some lottery tickets. Another officer responded, "How does someone crash a motorcycle in four lanes of traffic doing 60 miles per hour and not get killed or run over?"
Feeling triumphant at what had just happened, Randall turned, pointed to his big blue truck, and said, "Because THAT truck stopped, and he was lucky to fall in front of ME!"
For helping the motorcyclist, Randall was presented with a Highway Angel lapel pin, certificate and patch. Werner Enterprises also received a certificate acknowledging that one of its drivers is a Highway Angel.
Earlier this month, Schneider National's long history of military support was recognized by both the State of Wisconsin and Wisconsin's Department of Veterans Affairs (WDVA) during a ceremony held at Schneider's Corporate Headquarters in Green Bay, Wis.
The office of Wisconsin Governor Scott Walker honored the truckload carrier with a Certificate of Commendation for "going above and beyond in its mission to hire veterans." In the commendation, Gov. Walker noted Schneider's various programs designed to help people with military backgrounds become truck drivers.
Schneider associate (and former member of the U.S. Marine Corps) Grailing Jones also received a Certificate of Commendation from Walker's office. In his role as the company's small business owner-operator development manager, Jones helps current and former military personnel become small business owners by purchasing their own trucks and hauling freight for Schneider National.
In addition, the WDVA presented Jones with a "Year of the Veteran Award" for his outstanding leadership and exemplary advocacy for veterans and their families. This marked the first time the award was given to an individual instead of an organization.
Attached please find a picture taken after the ceremony in which the three awards were presented by WDVA Secretary John Scocos. Pictured (from left):
Lori Lutey (CFO, Schneider National), Steve Crear (General Manager of Schneider Finance, Schneider National), Grailing Jones (Small Business Owner-Operator Development Manager, Schneider National) and John Scocos (WDVA Secretary).
The 2013 CDL Coordinators/IT Manger's Meeting took place last week in Houston, TX, and Anne Ferro, FMCSA Administrator, led off the second day with a keynote presentation on FMCSA safety efforts. She thanked the AAMVA community for its safety efforts, noting that jurisdictions meet the challenge of "incorporating an essential safety mission into an exceedingly complex customer service environment."
She said her agency continues to "raise the bar for safety" to identify and disqualify poor drivers from operating commercial vehicles and to take action against operators who do fail to maintain safety standards.
Recent legislation - MAP 21 - provided FMCSA with additional opportunities to improve road safety and makes it possible for the agency to continue to rely on strong collaboration with partners. As a result of MAP 21, the agency will pursue 29 rulemaking activities, research and analysis on a variety of issues, and a number of program improvements.
She touched on the drug and alcohol clearinghouse, employer notification, the Commercial Learners Permit rule, and the agency's military CDL program. "The federal government and states share the same passion to save lives," she said. "FMCSA's vision remains a crash-free environment for commercial vehicles."
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