Top News

President Bush Addresses the Tax Relief Coalition on the Economy

Today, ATA Chief Economist Bob Costello attended a Presidential economic briefing to the Tax Relief Coalition, of which ATA is a member. At the briefing, the President stated the economy is back on track after enduring a recession, a terrorist attack, war, and corporate scandals. To that point, President Bush highlighted that employment has increased by 1.5 million jobs since August 2003. Consumers and businesses are confident and spending and investing as a result, the President noted. Highlighting the importance of his Administration's tax relief in spurring economic activity, the President stressed that Congress needs to make that relief permanent, including permanent elimination of the so-called "death" tax. The President also called on Congress to pass tort reform and energy legislation, both of which would help the economic expansion further.

Highway Reauthorization Conference Committee Meeting Scheduled for July 7

Conferees to the highway reauthorization bill have held two meetings and are expected to meet again on July 7. Funding levels continue to be the major challenge to passage of a bill with price tags ranging from the Bush Administration's $256 billion proposal to the House's $278 billion bill and the Senate's $318 billion legislation.

In an effort to move forward conferees have focused their discussions to date on non-controversial policy issues. Until an overall funding figure is decided upon, it is likely that they will continue this practice. With negotiations currently at a stalemate and TEA-21 set to expire at the end of June, Congress recently agreed to a one-month extension of the current transportation law.

ATA has identified 22 legislative priorities within the highway reauthorization debate and continues to follow this issue very closely.

ATA supports the highest funding level available without tax increases. To see a complete list of these priorities, click here, or contact Darrin Roth at (703) 838-1900 or droth@trucking.org.

Federal Reserve Raises Interest Rate to 1.25 Percent

The Federal Open Market Committee (FOMC), which is the monetary policy arm of the Federal Reserve, raised a key interest rate at its scheduled meeting on June 30. The FOMC boosted the federal funds rate, the interest rate with which the FOMC implements monetary policy, to 1.25%. The fed funds rate had been at 1.00% for over a year.

The move was widely anticipated as economic activity has accelerated in recent months. "The evidence accumulated over the intermeeting period indicates that output is continuing to expand at a solid pace and labor market conditions have improved," the FOMC stated. Clearly the trucking industry is seeing strong freight levels so far this year. Despite May's decrease in truck tonnage, which was only the second decrease in the last nine months, through the first five months of this year compared to the same period in 2003, tonnage is up a robust 6.4%. This growth is reflective of the overall economy which is expanding quite well. In spite of this solid growth, the Fed seems to believe it can be patient in raising rates going forward. It is important to remember that the FOMC's primary objective is to fight inflation. To that specifically, the Committee said, "Although incoming inflation data are somewhat elevated, a portion of the increase in recent months appears to have been due to transitory factors."

ATA believes the Fed will continue down the path of small rate increases in the quarters ahead. The fed funds futures market currently has a 100% probability of another quarter-point increase at the next FOMC meeting later this summer. "With underlying inflation still expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured," the group stated. In other words, several small steps over the next year or so, but definitely going upward. Nevertheless, the FOMC did add language to the statement that essentially says if they get it wrong, and inflation starts accelerating, they will move more aggressively. The next FOMC meeting is August 10th. For more information, contact Bob Costello at 703.838.1799 or bcostello@trucking.org.

Department of Commerce

U.S. - Mexico Talks on NAFTA Compliance, Jobs and Product Demand

On Monday, June 28, U.S. Secretary of Commerce Don Evans met with Mexican Foreign Relations Secretary Luis Ernesto Derbez and Mexican Secretary of Economy Fernando Canales to discuss job creation and increased product demand in Mexico and the United States. One topic of discussion was the Bush administration's commitment to ensure compliance with NAFTA and to identify and resolve obstacles encountered by U.S. businesses trying to access Mexican markets. Evans discussed ways to improve protection of intellectual property rights, regulatory transparency and the elimination of non-tariff trade barriers. In his meetings, Evans also emphasized the need to address these problems now in order to strengthen the trade relationship. Evans pointed out that delay only offered temporary benefits that would prevent workers and businesses in both countries from realizing the full benefits of an open and transparent trading relationship. "Mexico and the United States share more than a border. Each day, thousands of our citizens cross the border and share trade, culture and close family ties," Evans said. "It is because of this link that both the United States and Mexico have grown in recent years. This relationship represents a strategic alliance that is critical to strengthening the economic position of both countries in the global marketplace. By continuing to work together, we can achieve greater prosperity and greater opportunity." For more information, please contact ATA's Office of Safety, Security and Operations at (703) 838-7950. To view the complete Department of Commerce press release, click here.

Department of Transportation

FMCSA Issues Final Rule on HAZMAT Permits

The Federal Motor Carrier Safety Administration (FMCSA) published in the Federal Register of June 30, 2004 a rule finalizing the new federal safety permit for transporting certain highly hazardous materials. Motor carriers transporting specified radioactive materials, explosives, toxic-by-inhalation substances, and liquefied natural gas above the listed threshold quantities must comply with the new permit requirements by January 1, 2005. Trucking companies transporting these hazardous materials must have a "satisfactory" safety rating, acceptable crash and out-of- service rates, trucks with communication equipment, a compliant security plan, and a driver security training program as well as meet other particular operational conditions. Motor carriers seeking the new permit must apply on Form MCS-150B. To review a copy of the rule, click here. For information, ATA members can contact Rich Moskowitz at 703-838-1910 or rmoskowitz@trucking.org or otherwise, contact your representative state trucking association.

No new articles