THE HOUSE RULES COMMITTEE should be commended for deciding not to permit proposals to reimpose radical reduction in railroad rate flexibility when the full House moves to consider the budget reconciliation bill.

But there still remains some "garbage in the legislation that should be thrown out - or at least severely compacted - when the legislation is reviewed by a House-Senate conference committee.The rules committee's decision to block further consideration of the regulatory reform provisions, which would negate the rate flexibility provided under the 1980 Staggers Act, makes sense. Otherwise the ear-shattering debate surrounding the sale of Conrail would continue unabated and possibly gum up the budget reconciliation process.

This is not to say that captive shippers - companies having no realistic alternative to service by a single carrier - have not made a good case that some changes are needed. But the issue is just too complicated to deal with substantively in a three-week period. The entire issue can be dealt with in the next Congress when debate will be less heated and a thorough, rational examination of the situation can be made. Hopefully, the Interstate Commerce

Commission can move toward a more balanced decision-making process that will address some of the shippers' grievances, since it was substantial doubts about the agency's fairness that played a big role in the debate.

On the current House budget bill, at least one provision should be stripped before itclears Congress.

We are referring to a clause guaranteeing that employees laid off due to sales of track to short-line or regional railroads receive the New York Dock conditions the ICC used to routinely attach to its line sale conditions.

In addition to costing the railroads selling the lines a good chunk of cash, a provision in the legislation requiring implementing agreements virtually ensures that the new railroad resulting from the transaction will have to be unionized. We have nothing against unions and in fact favor them, in most instances. But this will block the new owner from quickly making the work rules changes needed to transform the line from a financial dog to a profit-making operation.

Since most of these short-line transactions involve marginal operations, the plain and simple fact is that the added cost resulting from a failure to make the work rule changes would render them economically unfeasible. The bottom line is that - instead of selling the lines and ensuring continued service - the railroads probably will choose to abandon them. The employees still will lose their jobs while the shippers on their line will suffer.

We applaud Secretary of Transportation Elizabeth Hanford Dole's call for Congress to dump this provision in the scrap heap where it belongs. Secretary Dole also wants Congress to add some public interest conditions to the budget bill requiring that the company keep specified amounts of cash on hand and limiting how much money they can pay out in dividends. These would make sense if Conrail's management had had a poor track record in the past. But that has not been the case. They have been smart, effective, aggressive and all indications are they will stay that way.

It makes little sense to add conditions requiring company officials to do what prudent businessmen would do anyway.

For the full story: Log In, Register for Free or Subscribe