Western Railroad Discussion > "Political outlook" for rails after the election?

An analyst was on Bloomberg earlier today, and said he expects a major infrastructure bill if the Democrats take control of the House.  When the  President proposed his initial infrastructure bill last year, he had several billion of low interest funds available for railroads.

I don't see that now.  BNSF's parent Berkshire Hathaway said they don't see great opportunities in the market at today's prices, and bought back a billion dollars of their own stock.  And have tens of billions left.  So, what would they do with more money?

Union Pacific has about a billion four of cash and short term investments, and has been filling in trackage and improvements as needed.

Norfolk Southern has about $750 million, CSX has about $400 million, and Kansas City Southern has $134 million.  Maybe KSU could use the cash, but I don't see anyone else in a hurry to scoop up nearly free cash

That would be public infrastructure, the rails are worthless except as commuter lines and trail material.

Out

Labor contracts for the Class 1s expired years ago out west at least. Perhaps the carriers will push for a settlement on their terms knowing a trump PEB in a republican controlled Congress will go in their favor.

fbe Wrote:
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> Labor contracts for the Class 1s expired years ago
> out west at least. Perhaps the carriers will push
> for a settlement on their terms knowing a trump
> PEB in a republican controlled Congress will go in
> their favor.

All of those agreements have since been settled.

bioyans,

Thanks for the update. I hadn't heard that in civilian life.

fbe

Lackawanna484 Wrote:
-------------------------------------------------------
> An analyst was on Bloomberg earlier today, and
> said he expects a major infrastructure bill if the
> Democrats take control of the House.  When the 
> President proposed his initial infrastructure bill
> last year, he had several billion of low interest
> funds available for railroads.
>
> I don't see that now.  BNSF's parent Berkshire
> Hathaway said they don't see great opportunities
> in the market at today's prices, and bought back a
> billion dollars of their own stock.  And have
> tens of billions left.  So, what would they do
> with more money?

The majority of the tax refunds to Corporations went to stock buy-backs. Not to wages or plant and equipment as was "advertised" when the dog-and-pony show announced the cuts last year. Add to that a mounting federal deficit that is mostly a result of those tax cuts and you have a perfect recipe for a recession as Federal borrowing tends to increase interest rates and which in fact, may crowd out other borrowers. I guess deficits only matter if it is a Democrat Administration is in power. 
>
> Union Pacific has about a billion four of cash and
> short term investments, and has been filling in
> trackage and improvements as needed.
 
The taxpayers are subsidizing UP with huge tax cuts. How nice.  
>
> Norfolk Southern has about $750 million, CSX has
> about $400 million, and Kansas City Southern has
> $134 million.  Maybe KSU could use the cash, but
> I don't see anyone else in a hurry to scoop up
> nearly free cash

Not exactly "free" given the fact middle class taxpayers are footing the bill. 

The free government cash (courtesy of those of us who pay taxes) would likely be in the form of low interest loans.

UP etc pay about 8% for capital, so a deductible 2% is a gift. They could even use the federal money to close out older more expensive and restrictive debt.

Posted from Android

ATSF3751 Wrote:
-------------------------------------------------------
> The majority of the tax refunds to Corporations
> went to stock buy-backs. Not to wages or plant and
> equipment as was "advertised" when the
> dog-and-pony show announced the cuts last year.
> Add to that a mounting federal deficit that is
> mostly a result of those tax cuts and you have a
> perfect recipe for a recession as Federal
> borrowing tends to increase interest rates and
> which in fact, may crowd out other borrowers. I
> guess deficits only matter if it is a Democrat
> Administration is in power. 

BOTH the current Speaker of the House and Senate Majority Leader have said that they will cut Social Security and Medicare to help "fix" the deficit.

Since Railroad Retirement Tier I is basically Social Security, your choice Tomorrow at the voting both could very well spell your doom.

Brian 

choodude Wrote:
-------------------------------------------------------
> ATSF3751 Wrote:
> --------------------------------------------------
> -----
> > The majority of the tax refunds to Corporations
> > went to stock buy-backs. Not to wages or plant
> and
> > equipment as was "advertised" when the
> > dog-and-pony show announced the cuts last year.
> > Add to that a mounting federal deficit that is
> > mostly a result of those tax cuts and you have
> a
> > perfect recipe for a recession as Federal
> > borrowing tends to increase interest rates and
> > which in fact, may crowd out other borrowers. I
> > guess deficits only matter if it is a Democrat
> > Administration is in power. 
>
> BOTH the current Speaker of the House and Senate
> Majority Leader have said that they will cut
> Social Security and Medicare to help "fix" the
> deficit.
>
> Since Railroad Retirement Tier I is basically
> Social Security, your choice Tomorrow at the
> voting both could very well spell your doom.
>
> Brian 
I think you need to revise your choice of media.  The media has been proven to report falsehoods to promote an agenda.  The President has said no such thing.  

Mitch McConnell says it out loud...

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-mcconnell-social-security-20181019-story.html

Posted from Android

P Wrote:
-------------------------------------------------------

> I think you need to revise your choice of media.
> The media has been proven to report falsehoods to
> promote an agenda.  The President has said no
> such thing.  

Perhaps you should reread Brian's post.  He didn't say the President was proposing cuts in Medicare and Social Security.  Brian said Speaker of the House and Senate Leader were proposing such actions,

Lackawanna484 Wrote:
-------------------------------------------------------
> Mitch McConnell says it out loud...
>
> http://www.latimes.com/business/hiltzik/la-fi-hilt
> zik-mcconnell-social-security-20181019-story.html
>
> Posted from Android

To be fair to the Senator, He said "entitlements".  The LA Times inferred which ones, and McConnell also said that entitlements need to be adjusted to future demographics, which does not NECESSARILY mean cuts.  And, despite all the tough talk, these cuts almost NEVER actually happen, because it is effectively the third rail of politics. As far as I'm concerened, this is another one of non-story news stories that outlets like the LA Times use to scare voters into voting a certain way, just like all the talk of excluding pre-existing conditions. I'm not aware of ANY serious candidate that has actually proposed that, despite the talking points.  There IS an interesting point about that made by a certain national talk show host.  An insurance plan that covers pre-existing conditions is NOT an insurance plan at all.  You can't buy fire insurance to cover your house which has already burnt down.

Lackawanna484 Wrote:
-------------------------------------------------------
> An analyst was on Bloomberg earlier today, and
> said he expects a major infrastructure bill if the
> Democrats take control of the House.  When the 
> President proposed his initial infrastructure bill
> last year, he had several billion of low interest
> funds available for railroads.
>
> I don't see that now.

Had the "analyst" talked about this at the beginning of the election season (just after Labor Day), it would have made more sense. Ranting about this just days before the election? I call it a last ditch voter manipulation, where there's not enough time to analyze the topic. 

For the Class I railroads, what happens after today should be business as usual, at least out here in BNSF and UP(a.k.a. PSR) territory. For me, the political outlook is irrelevant for the rails after today. As for other infrastructures, like the highways, how one votes today won't change how they crumble. We got here by decades of neglect, not due to which politcal party is in control.

California voters are dealing indirectly with infrastructure on one Proposition, and most of the ads against it are using classic fear mongering tactics. If there's a critical need, "emergency funds" will be found regardless of how people vote today, so yawn. Locally here in the Silicon Valley, a Proposition was passed 2 years ago to deal with "congestion" (infrastructure-related), and thus far, we got close to nothing.

Shouldn't be difficult to come to this conclusion based on majoity of the political issues discussed by the media the last month or so.
 

junctiontower Wrote:

> There IS an
> interesting point about that made by a certain
> national talk show host.  An insurance plan that
> covers pre-existing conditions is NOT an insurance
> plan at all.  You can't buy fire insurance to
> cover your house which has already burnt down.

So if you are a diabetic, you can never buy health insurance again?

Broke your leg?  Had a cold?

Brian

One of the Republican "successes" was stripping  catastrophic reinsurance from ObamaCare. CatRe covers extremely expensive risks in a population. By stripping out CatRe, the [entire] expenses of the rare 3 month preemie, or the liver transplant don't get pushed back into the general rate base. [This would be a subsidy, typically focused on the 5% of a population which may generate half the entire group expense.

Most large plans can average in an uncommonly expensive risk, but it can torpedo a smaller group plan. Diabetes, AIDS, some forms of cancer, etc can easily run several million of expenses.]

Posted from Android

[edited for clarity]



Edited 1 time(s). Last edit at 11/06/18 11:09 by Lackawanna484.

choodude Wrote:
-------------------------------------------------------
> junctiontower Wrote:
>
> > There IS an
> > interesting point about that made by a certain
> > national talk show host.  An insurance plan
> that
> > covers pre-existing conditions is NOT an
> insurance
> > plan at all.  You can't buy fire insurance to
> > cover your house which has already burnt down.
>
> So if you are a diabetic, you can never buy health
> insurance again?
>
> Broke your leg?  Had a cold?
>
> Brian

A broken leg or a cold is not a pre-existing condition.  Diabetes can be.  My wife has it, and when she lost her good job in the 2008 recession, MY employer more or got less got stuck with her.  Between that and other conditions that have cropped up since, she's cost them the better part of a million dollars. The point is not that coverage for pre-existing conditions shouldn't be covered, just that when someone makes as commitment (employer, private insurance, Obama Care, whatever) to cover you even though you already have a condition, that is by definition no longer insurance, but a subsidy.  Once again, despite all of the rhetoric, show me a candidate that has actually expressed a desire to NOT cover pre-existing conditions.