For freight railroads and their customers, Union Pacific’s proposal to acquire control of Norfolk Southern commands center stage in Washington in 2026. With the prospect of the first transcontinental railroad in the United States pending Surface Transportation Board (STB) decision, interests from Wall Street to Main Street will press their views.
Rather than add to that commentary, this overview looks beyond UP-NS for a scan of other Washington issues now in front of the freight rail sector. Federal oversight and investment top the list, but tech policy also merits scrutiny in this midterm election year.
STB’s Agenda
In May 2025, the U.S. Supreme Court unanimously (8-0) upheld in Seven County Infrastructure Coalition, et al. v. Eagle County, Colorado, et al. the STB’s finding that the National Environmental Policy Act (NEPA) does not require the agency to consider environmental upstream and downstream effects that are “separate in time or place” from the underlying project under review.
The Court’s endorsement of the STB’s rational adjudication reinforced other Board reform initiatives under Chairman Patrick Fuchs. Complementing but distinct from early DOGE efforts, Vice Chairman Michelle Schultz led listening sessions intended to streamline Board procedures. Notwithstanding the 43-day federal shutdown in late 2025, the STB has already implemented some process reforms with more planned in 2026.
“Our goal is to increase accountability, transparency and collaboration at the Board,” Fuchs told Railway Age. “We have cut the backlog of pending matters and accelerated decisions in recent proceedings. The Board now, for the first time, issues regular ‘Updates on Outstanding Proceedings,’ providing entities greater certainty around the timing of Board action and thereby benefitting parties’ operational and capital planning.”
In September 2025, railroads and shippers united to urge the STB to leverage its authority and “provide clear and definitive guidance on the scope and application” of Interstate Commerce Commission Termination Act of 1995 preemption to “protect the fluidity of the transportation network and the continued growth of American businesses.”
Roger Nober, who formerly chaired the STB under President George W. Bush, served as EVP and Chief Legal Officer for BNSF, and is now a professor at George Washington University, said, “Any time railroads and shippers advocate for the same outcome, it’s worth paying attention. The STB can and should issue the requested preemption statement. Crafting preemption guidance that courts will respect will take thoughtful care, given the Supreme Court’s 2024 Loper Bright ruling mandating that the judiciary use its own judgment to interpret statutes such as the ICCTA.”
Fuchs, Schultz and Member Karen Hedlund are well positioned to thread this needle. Declared Fuchs, “In light of the potential benefits to the public, we are considering issuing a policy statement on preemption in the first half of 2026.”
In another early 2026 action, the STB proposed to repeal 49 C.F.R. § 1144 and streamline the path for shippers to obtain competitive access. The repeal of the current regulations governing prescription of reciprocal switching, through routes and through rates, opens a competitive debate.
Whether the STB will implement its agenda with three, four, or five members is up to Congress and possibly the Supreme Court. Senate confirmation of Republican Richard Kloster remained pending as of late January 2026. Last year, the President removed Democrat Robert Primus from the STB, vacating that seat. Primus challenged his dismissal, and in December 2025 added a racial discrimination claim. An upcoming Supreme Court decision on the President’s removal of Federal Trade Commission Member Rebecca Slaughter could instruct resolution of Primus’ case and shape how the STB fits with an evolving unitary executive branch framework.
On Capitol Hill
This year began under another Continuing Resolution funding much of the federal government. Following House approval late in January, the Senate anticipated passing FY 2026 “THUD” appropriations including USDOT and the STB. Less than eight months remain before Congress must finalize funding for the next fiscal year, FY 2027.
Beyond appropriations, Washington strategy dean Bruce Mehlman places surface transportation alongside the Farm Bill and the Foreign Intelligence Surveillance Act Section 702 as top 2026 Congressional reauthorization priorities. The expiring Infrastructure Investment and Jobs Act (IIJA) includes authorizations for Federal Railroad Administration (FRA) and other rail and multimodal programs, which will end unless Congress acts by Sept. 30, 2026.
STB reauthorization also remains pending. The legislative dialogue is uncertain with UP-NS under consideration and reciprocal switching in renewed play. FRA reauthorization typically features new rail safety provisions, but the mandate crusade following the 2023 East Palestine incident has subsided. That doesn’t mean that rail management and labor won’t differ over more safety requirements.
OneRail Coalition Director Devon Barnhart said, “While the rail sector has a range of interests in surface transportation reauthorization, we are united in our concern about any increase in truck size and weight. Our OneRail members are fully aligned on the essential role rail plays in easing congestion and supporting safe, reliable goods movement.”
Although highway and transit priorities have historically dominated surface transportation reauthorization, rail now counts, too. From a freight rail perspective, short lines seek continued advance appropriations for the FRA Consolidated Rail Infrastructure and Safety Improvements (CRISI) program. The IIJA broke new ground with $1 billion annually in pre-approved advance appropriations for CRISI for each of the five fiscal years, FY 2022-2026, making CRISI a game changer for short lines and their customers.
The push to maintain robust CRISI funding collides with what Eno Foundation analyst Jeff Davis calls the “$150 Billion Problem.” As Davis explains, “$150 billion is the approximate amount of extra revenue, or reduced spending, that the [Highway] Trust Fund (HTF) will need to remain solvent for another five-year authorization.”
By comparison, when enacted in the wake of COVID and the supply chain logistics crisis, the 2021 IIJA included $118 billion in transfers from the general fund. The funding gap for the IIJA’s successor legislation is larger. If agreement can’t be reached, Congress could temporarily extend surface transportation reauthorization, a frequent past outcome.
Shoring up the HTF with general funds may help CRISI and other multimodal programs. If surface transportation funding requires general taxpayer dollars to prop up inadequate highway user fees flowing into the HTF, why shouldn’t these general funds support rail investments? Plus, unlike electric vehicle subsidies, CRISI has bipartisan appeal with support from the Administration based on the President’s FY 2026 budget proposal that included $500 million for CRISI above IIJA advance appropriations.
Playing the CRISI long game mirrors the approach of the American Short Line and Regional Railroad Association (ASLRRA) to modernize the 45G track maintenance credit. H.R. 516, which would increase the per-mile tax credit cap from $3,500 to $6,100, index the credit to inflation going forward, and allow eligibility for expenditures on all current short lines, now has 141 House cosponsors. The Senate counterpart S. 1532 has 36 cosponsors.
While the legislative path to enacting 45G modernization isn’t yet clear, as ASLRRA President Chuck Baker told Railway Age last October, “We feel good about our case. We have the right champions. We have a lot of support.” Concluded Baker, “We don’t know how long it will take but we’ll keep banging on the door until somebody opens it.”
FRA Priorities
Last October, the Senate confirmed David Fink as FRA Administrator. A fifth-generation railroader, Fink started at Conrail in 1976 as a 15-year-old summer track worker. Fink rose to President of Pan Am Railways and brings deep rail experience to the FRA.
At his Senate confirmation hearing in May 2025, Fink underscored his belief in FRA’s “primary mission, which is one of safety first.” He committed to refresh regulations, improve FRA’s CRISI grant program delivery, and partner to advance safety innovations and get “safety technology out in the field.”
Fink’s safety focus builds on Transportation Secretary Sean Duffy’s announcement in September 2025 that FRA would add rail bridge safety standards training to leverage the current federal and state track inspector workforce. In January 2026, Fink reformed the agency’s safety civil penalty settlement negotiation process and rechartered FRA’s Rail Safety Advisory Committee (RSAC).
Streamlining CRISI project delivery will take time. More than 15 months have passed since FRA’s most recent CRISI awards of $2.4 billion in combined FY 2023-2024 funds, including 81 awards valued at nearly $1.3 billion for short line projects. As of late January, the rail industry waited for FRA’s anticipated notice of funding opportunity for approximately $1.1 billion in FY 2025 CRISI funds.
Yet with AI and transformative tech sweeping society, the insistent policy challenge facing FRA and railroads looms beyond the industry.
In December 2025, Purdue University declared, “For the first time in the U.S., a roadway has wirelessly charged an electric heavy-duty truck driving at highway speeds.” This multistage research demonstration with Indiana DOT, according to Purdue, “lays groundwork for highways that recharge EVs of all sizes across the nation.”
Then, at the January CES 2026 tech showcase came this: “Automotive technology supplier Aumovio has partnered with cloud computing giant Amazon Web Services to speed up the deployment of autonomous vehicles, starting with Aurora Innovation’s fleet of self-driving commercial trucks.”
If one day AI-driven autonomous trucks recharge under way while delivering freight, what must shift in Washington for freight railroads to keep pace?
As T&I Railroads, Pipelines, and Hazardous Materials Subcommittee Chairman Daniel Webster (R-Fla.) assessed last June, “Unfortunately, while other government agencies, including those in the Department of Transportation, are embracing the promise of innovation and developing the right regulatory frameworks for its promotion, much of the Federal Railroad Administration’s regulatory framework remains a relic of the past.”
The Washington Post agreed, urging FRA in December to remove “burdensome regulations holding back technological progress” that “block American-made automation technology from being adopted.”
Following that editorial, FRA announced a new temporary waiver program to better evaluate the impact of automated track inspection (ATI) technology. Association of American Railroads President and CEO Ian Jefferies welcomed the revised ATI waiver as a positive step forward, noting that the industry “values its partnership with the Administration and shares its goals of strengthening U.S. manufacturing, onshoring supply chains, driving down costs, accelerating innovation, and advancing smart regulatory reform.” Jefferies added that under Secretary Duffy, “a data-driven, future-forward approach to regulating new technology benefits everyone—including employees—by enabling railroads to safely adopt AI-driven and other innovations at the pace needed to keep America’s supply chain competitive and resilient.”
Former FRA Administrator Allan Rutter, now a senior research scientist at the Texas A&M Transportation Institute, underscored the urgency of accelerating rail tech adoption: “Freight railroads are implementing AI-supported analytics and other technology tools to improve service as the market demands, without government mandate. Where tech has a safety nexus, however, FRA has a statutory role. I am confident that Administrator Fink will align the FRA’s regulatory stance with a safety focus consistent with the other USDOT modal agencies accelerating deployment of autonomous vehicles including trucks.”
In a statement to Railway Age, Fink said, “Under Secretary Duffy, the FRA is modernizing American rail by prioritizing safety and investing in innovation. Our rail industry is the backbone of a competitive U.S. economy, delivering essential goods that families rely on every day. By cutting through red tape to unleash new technology—such as granting the long-overdue waiver for automatic track inspection technology that the previous Administration sat on—we are ensuring that our infrastructure remains safe, efficient and ready to serve the American people.”
Rutter captures the work ahead: “FRA must team productively with the other USDOT agencies to assure tech adoption that benefits all transportation modes. But to get beyond press releases, rulemaking and litigation, FRA also must partner with the regulated rail community—and that includes labor. Railroads would do well to advocate rail technologies that enhance rather than replace the work of railroad workers.”
For 2026 in Washington, think multiple tracks. FRA and USDOT will plot new courses to drive tech, while streamlining regulation. Congress will consider the next phase of federal investment in rail amid a surface transportation funding reset. The STB will assess rail competition and a petition for approval of the first U.S. coast-to-coast transcontinental railroad—all while trade and other domestic and foreign policy actions shape the economy.
In November, voters will have their say. Their voice will cap a dynamic year signaling our future.
Don Itzkoff is Chief Policy Officer for Patriot Rail.
