When I witnessed President Obama address the U.S. Chamber of Commerce last month, he issued a call to American businesses to invest private capital reserves and begin hiring again in an effort to boost lagging employment rates. For the past 30 years, the nation's freight railroads have been doing exactly that: investing record amounts of private capital in the national rail network and supporting jobs across the country. That is because, unlike any other mode of transportation, freight railroads operate across infrastructure they themselves build, maintain and grow with private dollars.
Last week, we announced that freight railroads once again are projected to spend a record $12 billion on capital expenditures in 2011, up from $10.7 billion in 2010. On the whole, freight railroads invest five-times more than the average U.S. manufacturer, and since 1980 have invested $480 billion to build, maintain and grow the national rail network. So, freight rail has been and will continue to meet the President's call in the critical years ahead.
However, we must recognize the reality that these multi-billion dollar investments made by the freight railroads -- which enable the movement of one third of the nation's exports -- are both dependent on and supported by sensible government regulation. Acknowledging the role business has to play in expediting our nation's economic recovery, the President in January issued an Executive Order pledging to seek out and remove regulations that are needlessly stifling capital investment, job creation and subsequent economic growth. It is upon this critical point that freight rail's continued success, and continued private capital investments, depend.
Let me be specific. Recently, the Federal Railroad Administration (FRA) agreed to review its regulations for implementing positive train control, the most expensive federal safety mandate in railroad history. This is a regulation that Cass Sunstein, administrator of the White House Office of Information and Regulatory Affairs, when prompted to offer an example of any rules where the benefits don't justify the costs, cited PTC as a stand-out example. By taking steps to review the PTC rule, FRA has an opportunity to revise a federal mandate that according to the Administration's own estimates has a cost-benefit ratio of nearly 20 to one.
While these steps by FRA are laudable, there remain other challenges from both legislation and regulations that threaten to undermine railroad infrastructure investments. Despite broad acknowledgment of the importance of continued private rail investments amidst federal, state and local budget cuts, there are those in the executive and legislative branches of government that continue to pursue fundamental changes to the very economic regulations that have spurred rail's growth and have allowed it to serve as an economic engine for the country.
Whether through legislation or regulation, these proposals are creating an air of uncertainty in the marketplace, potentially harming those businesses that rely on rail to get their goods to the global market, and ultimately consumers. Uncertainty has a chilling effect on investments, which could in turn reduce railroads' ability to sustain record spending on rail infrastructure and equipment. That means existing track and equipment would deteriorate and plans for new capacity eliminated. Inevitably, rail service would become slower, less responsive, less affordable and less efficient.
This could not come at a worse time. President Obama and Congress have great expectations for the freight rail industry -- whether that's to help American business double exports by 2015, or to provide the literal foundation for increased intercity and high-speed passenger rail.
Now is the time to revisit what regulations stand in the way of reaching our goals, while preserving those that help ensure continued success and economic growth. This will allow freight rail to continue to meet the great expectations America has for meeting the needs of business and consumers and help keep propelling U.S. economic recovery.