Potential Rail Strike Squeezes Biden Between Unions and Economic Peril

The Biden administration is pressuring labor unions and freight-rail operators to agree on a new contract before a Friday deadline to avert a strike that risks disrupting the U.S. economy and undermining Democrats’ midterm election prospects.

President Joe Biden has been briefed on the matter and is closely tracking the work of Cabinet officials and economic advisers—which has included multiple meetings of the National Economic Council, a White House official said Monday.

Biden is at the forefront of these matters. The official explained that Biden has stated to the negotiators its insistence on a freight-rail shutdown as a negative outcome for the economy.

Labor Secretary Marty Walsh pressed both sides to come up with a solution on Sunday night, according to the Department of Labor in a Monday statement. A department official stated that the cabinet and administration have called the parties numerous times and Walsh has postponed a trip to Ireland in order to resolve the impasse.

Labor unions and freight railroads worked all weekend to negotiate a new contract. They wanted to prevent strikes that could be disruptive of agricultural delivery and disrupt supply chains.

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Biden and fellow Democrats would also be at risk from a strike. Their efforts to hold onto their Senate and House majorities for the Nov.8 elections has been helped by several legislative wins and better economic news. Supply-chain disruptions less than two months before voters go to the polls could hurt Democrats and put Biden—who has pledged to be the most pro-union president in history—in a bind.

While 10 of 12 railroad workers’ unions have struck new labor deals, the two holdouts—the Brotherhood of Locomotive Engineers and Trainmen and the International Association of Sheet Metal Air, Rail, and Transportation Workers—account for more than 90,000 rail employees.

Railroads have advised customers of some potential service disruptions starting on Monday if talks don’t progress ahead of a potential walkout on Sept. 17. Six Class I freight railroads will begin to take steps to “manage and secure” shipments of some hazardous or sensitive materials starting Monday, the Association of American Railroads, a trade group, said in a statement.

Brooke Appleton (Vice President of Public Policy at the National Corn Growers Association) said that a work stoppage could also hamper food shipment and be particularly dangerous.

“Rail is an essential piece of the agricultural supply chain, particularly as we approach harvest season, so any disruption to rail services would have a negative and lasting impact on our growers,” Appleton said via email. “Given what is at stake for the agricultural community and other sectors of the economy, we hope all parties will come to an agreement.”

Emergency Board

Years of difficult negotiations between workers and railroads have been ongoing since January 2020. This was shortly after the 2019 labor contract expired. After the National Mediation Board failed to carve out an agreement this summer, the Biden administration’s Presidential Emergency Board recommended a 24% compounded wage hike by 2024 and $5,000 in bonuses, including some retroactive elements. According to the AAR, such a wage increase would be the largest in at least 40 decades.

StenyHoyer, House Majority Leader said Monday that Congress would take action to prevent strikes from affecting freight-rail operations in the United States.

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“There is a role for Congress if in fact they fail to reach an agreement,” the Maryland Democrat said on Bloomberg Television’s “Balance of Power” with David Westin. “We can pass legislation if needed.”

US Chamber of Commerce has joined the chorus of industry organizations calling on lawmakers to act by expending Friday’s deadline or forcing both parties to settle.

“A national rail strike would be an economic disaster— freezing the flow of goods, emptying shelves, shuttering workplaces, and raising prices for families and businesses alike,” chamber President Suzanne Clark said in a statement.

Congress is able to cancel or delay a stoppage of railwork. The 1986 law extended for 60 days a no strike rule to allow the Maine Central Railroad Union to continue its negotiations.

In 1991, Congress was able to end a nationwide railroad strike in less than 24 hours from its beginning through a single resolution. The House’s vote was 400-5.

–With assistance from Kim Chipman Ian Kullgren.

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