Train Derailments Expose Rift Between Trump-Backed Populists, Pro-Business GOP

(Bloomberg) -- Rail regulation is the latest flashpoint in the clash between corporate-friendly Republicans and populist upstarts fighting over the future of the party.

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Senators could vote as early as this month on new rail-safety rules championed by JD Vance, Ohio’s junior senator and a rising populist star, who seized on the fallout from the toxic East Palestine derailment to make his first significant legislative push.

Former President Donald Trump, the GOP front-runner who made a high-profile campaign stop at the crash site, has embraced the new rail-safety rules as he seeks a second term.

But they face formidable GOP opposition in the Senate, where Republicans have long been a bulwark of corporate power even as Trump’s brand of populism took root elsewhere in the party. The foes include Ted Cruz, the top-ranking Republican on the Commerce Committee, and John Thune, the No. 2 Senate Republican, who once worked as a railroad lobbyist and state rail commissioner.

The bill “is a test case about whether a more pro-worker Republican Party has some teeth instead of just some rhetorical flourish,” Vance said in an interview.

Vance first came to national prominence as the author of “Hillbilly Elegy,” a memoir documenting working-class struggles in rural America. He teamed up on the rail-safety measure with lead sponsor Sherrod Brown, an Ohio Democrat and ardent populist, though with a progressive viewpoint.

Only six other Senate Republicans publicly support the bill, including fellow populist Josh Hawley of Missouri, as well as some more senior Republicans including former presidential candidates Marco Rubio of Florida and Mitt Romney of Utah. GOP Leader Mitch McConnell of Kentucky said Tuesday he’s undecided, as backers press for more Republican support to overcome a filibuster.

Lisa Camooso Miller, a public affairs consultant and former Republican National Committee communications director, said the railroad fight is another example of a shift in the party.

“This new crop of Republicans has arrived in Washington that no longer gives the benefit to corporations,” she said. On Washington’s K Street corridor of corporate lobbying offices, she said, “people are clutching their pearls that Republicans are no longer a safe bet.”

Breaching the ‘Philosophical Wall’

The portion of Republicans and Republican-leaning independents who say large corporations have a positive impact on society plunged from 54% in 2019 to 26% last October, according to Pew Research Center polls.

That’s leading to other unusual bipartisan legislation targeting corporations, including in banking.

Vance, Hawley and Elizabeth Warren, another progressive Democrat, teamed up on clawing back executive compensation when banks fail. The Banking Committee backed a narrower version Chairman Brown wrote with ranking Republican Tim Scott of South Carolina on a 21-2 vote in June.

Vance hailed the strong Republican support for that legislation as a breach in what used to be a GOP “philosophical wall.”

Vance also predicts he’ll make a “breakthrough” in the coming weeks on his rail bill. He argues the electoral success of Republicans now depends on working-class voters.

The measure would require sensors to detect overheated ball-bearings — seen as likely to have caused the East Palestine crash — while tightening rules on hazardous cargo and increasing maximum fines to $10 million.

After a Toxic Train Derailment, East Palestine Is Fracturing

It also would require a minimum two-person crew on freight trains. Labor agreements require the same, but the Association of American Railroads has argued that new technologies should allow single-person crews to operate safely.

A study for the group in 2015 estimated railroads could save more than $2 billion a year using one-person crews, a boon to freight giants like Norfolk Southern or Union Pacific.

Republican Resistance

Conservative ideological groups led by FreedomWorks are aligned against the legislation and the rail, chemical and oil industries are deploying lobbying muscle to blunt it, according to Open Secrets data. Some others, like the Heritage Foundation, have praised Vance’s efforts.

Cruz, a Texas senator, argues that regulatory costs imposed on railroads risk worsening inflation and hurt overall safety if shippers divert hazardous materials from rail to trucks. And he’s demanding a provision to clear the way for mass rail shipments of liquefied natural gas, a non-starter for some safety advocates who deride the LNG “bomb trains” because of their explosive potential.

Thune criticized the bill as over-broad, citing the minimum two-person crew requirement, and said a more targeted bill could win wider support. He noted Norfolk Southern’s East Palestine train had three people on board.

Similar dynamics are playing out in the Republican-controlled House, where the issue has been moving slowly.

Transportation Committee Chair Sam Graves has said he’s holding off until the National Transportation Safety Board completes its derailment investigation.

But Representative Bill Johnson, an Ohio Republican who represents East Palestine and sponsored his own rail safety measure, said the matter is too urgent to delay.

“Why wait 18 months when you’ve got on average three rail derailments a day?” Johnson asked.

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