Majority Statement

• Senator John D. (Jay) Rockefeller IV

  Chairman

  U.S. Senate Committee on Commerce, Science, and Transportation
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  Majority Statement

  Senator John D. (Jay) Rockefeller IV

  Today, we are going to hear from nominees for positions in the Federal Government that don’t generate a lot of headlines, but that play a key role in our country’s economic success.

  We are first going to hear from Ms. Debra Miller, who has been nominated by the President to be a Commissioner on the Surface Transportation Board (STB). Ms. Miller has extensive experience working on transportation policy at the state level and in the private sector. As we discussed at our meeting earlier this week, however, Ms. Miller, the STB is an agency with a different function than a state transportation department. The STB’s job is to serve as an honest broker between freight railroads, shippers, and the millions of consumers, farms, and small businesses that our country’s freight railroad network serves.  

  Since Congress passed the 1980 Staggers Act, the STB has seen its primary mission as helping the freight rail industry get back on a stable financial footing. Under the STB’s watch, the freight rail industry has consolidated from 39 companies to four large carriers today – two that dominate the market east of the Mississippi River, and two to the West. And the STB has set a high bar for captive shippers who have the resources and the guts to challenge these dominant railroads’ business practices.    

  It is not any secret that I think that – more than three decades after the Staggers Act – the STB needs to change its perspective. The evidence is overwhelming at this point that the four dominant freight railroads are financially strong.  It’s time for the STB to re-focus its mission on supporting the businesses and people who use the rail network. 

  As I documented in a Commerce Committee staff report I issued three years ago - and in a new staff report I released this morning - the freight railroads are setting new financial records almost every quarter. While the rest of the economy has been limping along for the past few years, the freight railroads have been hauling in record amounts of cash. Even after paying for their operations and making needed capital investments, the companies are buying back record amounts of their stock and raising their dividends to their shareholders. They are hitting every benchmark of financial health that Congress, the STB and the investor community has set for them. I ask unanimous consent to insert this Commerce Committee staff report into the record of this hearing.  

  As I told you in our meeting, Ms. Miller, I think the STB needs to stop worrying so much about the financial health of the railroads, and focus more on the persistent complaints coming from the shipper community – about poor service, bullying tactics, and lack of competition. I also think the STB needs to a better job responding to its stakeholders in a timely way.

  Our next nominee is Mr. Chip Jaenichen, who has been nominated to lead the Maritime Administration within the Department of Transportation. Mr. Jaenichen would bring to this job the leadership experience he gained during a three-decade long career in the United States Navy. The maritime industry is critical to the continued success of our country – whether it’s expanding exports, the opening of the Panama Canal, creating jobs, or managing goods movement, especially in the growing energy sector.  

  States around the country are looking to expand service, like in my state of West Virginia, where we have been working to move more goods on marine highway 70 and add container-on-barge service. If you are confirmed, Mr. Jaenichen, you will be tasked with maintaining the health of the industry, including support for mariners, shipbuilding, shipping, and port operations. You also have a vital role to play in working with the military and Department of Homeland Security to ensure our country’s national security.  

  I would also like to welcome Mr. Arun Kumar, who is the President’s nominee to be Assistant Secretary for Global Markets and Director General of the U.S. and Foreign Commercial Service at the Department of Commerce.  

  If he is confirmed, Mr. Kumar would lead the Department’s newly reorganized “Global Markets Unit” within the International Trade Administration (ITA). His job will be to promote exports by assisting American businesses access and penetrate foreign markets. He would also lead SelectUSA – President Obama’s new initiative to promote foreign direct investment. My state of West Virginia is a great example of the profoundly positive impacts that foreign investment can have on our local economies. 

  After decades of private-sector experience, Mr. Kumar retired in September of this year as a partner and member of the Board of Directors at KPMG, where he worked for nearly 20 years. He has executive experience – including as a CEO – at numerous companies before arriving at KPMG. Mr. Kumar, I would like to thank you and our other two nominees for being willing to serve your country in these positions, and I look forward to hearing your testimony today.

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Minority Statement

• Senator John R Thune

  Ranking Member

  U.S. Senate Committee on Commerce, Science, and Transportation
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  Minority Statement

  Senator John R Thune

  Mr. Chairman, thank you for holding this hearing today to consider the nominations of Debra Miller to be a Member of the Surface Transportation Board, Arun Kumar to be Assistant Secretary of Commerce for Global Markets and Director General of the U.S. and Foreign Commercial Service, and Paul Jaenichen to be Administrator of the Maritime Administration. 

  I want to thank each of our nominees for being here and for their willingness to serve the nation. 

  As the committee knows well, the Surface Transportation Board (STB) plays an important role as the independent federal agency with regulatory authority over freight railroads. Among other things, the STB is charged with resolving railroad rate and service disputes and reviewing proposed railroad mergers.

  Ms. Miller has had a distinguished career in the transportation sector, including her service from 2003 to 2011 as Secretary of the Kansas Department of Transportation under both Governor Sebelius and Governor Brownback. In that capacity, Ms. Miller managed more than 3,000 employees and a $1 billion budget. She was responsible for a state highway system spanning 10,000 miles, as well as overseeing shortline railroad grants and rail planning – something I can relate to as a former state rail director. I look forward to hearing her views on how the STB can help maintain a strong national rail network while also serving the interests of shippers, particularly small shippers, who often have difficulty bringing a case before the STB. I am also interested in hearing about Ms. Miller’s major rail initiatives during her time as Transportation Secretary for Kansas, and how her experiences there will shape her approach to issues that are brought before the STB.

  Our nominee to be Assistant Secretary of Commerce for Global Markets and Director General of the U.S. and Foreign Commercial Service, Mr. Arun Kumar, has achieved success in the private sector. I look forward to hearing from Mr. Kumar about how he will measure success in terms of creating a favorable environment for U.S. export growth. I will also be asking Mr. Kumar what role he anticipates playing as Congress considers Trade Promotion Authority. 

  After serving at the helm of the Maritime Administration as Acting Administrator since June of this year, I am pleased to see that Captain Paul Jaenichen has been nominated to lead this important agency.

  Captain Jaenichen has a distinguished 30-year career in the United States Navy as a submarine commander, and brings a wealth of maritime experience to bear in this position, should he be confirmed.

  Mr. Chairman, while we must fulfill our obligation to carefully examine the qualifications of these nominees, I expect that we will work together to advance these nominations through the committee and hopefully the Senate in a timely manner, as we have done with several other Commerce Committee nominees this year. I have to note, however, the irony of our holding this hearing on a day when the Senate has fundamentally changed the way it will consider such nominations. I think the dramatic rules change that we witnessed earlier today will have a lasting and damaging impact on the Senate and possibly even on the quality of nominees confirmed to executive and judicial positions, because they will now require less bipartisan consensus to be confirmed. Nevertheless, Mr. Chairman, I thank you for holding this hearing, and I look forward to the testimony from our witnesses.

Testimony

• Mr. Paul Jaenichen Sr.

  to be Administrator of the Maritime Administration

  U.S. Department of Transportation
  Download Testimony (38.53 KB)

• Ms. Debra Miller

  to be a Member of the Surface Transportation Board
  Download Testimony (80.50 KB)

• Mr. Arun Kumar

  to be Assistant Secretary for Global Markets and Director General of the U.S. and Foreign Commercial Service

  International Trade Administration, U.S. Department of Commerce
  Download Testimony (77.02 KB)