President Joe Biden has called on Congress to pass legislation to avoid a December 9 rail line shutdown, possibly looking to further damage a shaky United States economy during the holidays.
According to the president, Congress should act “immediately to adopt the Tentative Agreement between railroad workers and operators — without any modifications or delay — to avert a potentially crippling national rail shutdown.”
Democrat from California, House Speaker Nancy Pelosi, said the House would follow suit. “This week, the House will take up a bill adopting the Tentative Agreement — with no poison pills or changes to the negotiated terms — and send it to the Senate,” wrote Pelosi in a statement.
“It is my hope that this necessary, strike-averting legislation will earn a strongly bipartisan vote, giving America’s families confidence in our commitment to protecting their financial futures,” she continued.
Just Monday, more than 400 groups requested Congress intervene in the continuing railroad labor standoff, which threatens to strand travelers, idle shipments of fuel and food, and inflict billions of dollars in economic damage.
A stoppage of rail traffic could freeze almost 30% of cargo shipments in the U.S., stoke inflation, and cost the American economy as much as $2 billion per day, unleashing transport woes that could affect agriculture, healthcare, manufacturing, retail, and U.S. energy.
“A rail shutdown would devastate our economy,” said Biden. “Without freight rail, many U.S. industries would shut down…Communities could lose access to chemicals necessary to ensure clean drinking water. Farms and ranches across the country could be unable to feed their livestock.”
The president has hailed the contract deal that includes compounded wage increases of 24% from 2020 through 2024, a five-year period, and five additional $1,000 lump-sum payments. Workers in four of the unions have already rejected the deal, with eight unions approving it.
Marty Walsh, Labor Secretary, Agriculture Secretary Tom Vilsack, and Pete Buttigieg, Transportation Secretary, have been involved in discussions with unions, agriculture industry stakeholders, and the rail industry.
Top Republican on the Commerce Committee, Republican from Mississippi, Senator Roger Wicker, praised the president’s call on Congress to act and said neither side was pleased with the compromise contract deal. “But the responsible thing to do is avoid the strike,” Wicker said.
The Association of American Railroads said, “congressional action to prevent a work stoppage in this manner is appropriate…No one benefits from a rail work stoppage — not our customers, not rail employees, and not the American economy.”
Impacts from a strike could be felt as soon as early December
In a recent letter, the National Association of Manufacturers, American Petroleum Institute, American Trucking Associations, U.S. Chamber of Commerce, National Restaurant Association, National Retail Federation, and other groups warned any potential impacts from a strike could be felt as soon as December 5.
President Biden said Congress “should set aside politics and partisan division and deliver for the American people. Congress should get this bill to my desk well in advance of December 9, so we can avoid disruption.”
“The risks to our nation’s economy and communities simply make a national rail strike unacceptable,” read the letter. The letter also warned a strike could halt commuter and passenger rail services that “would disrupt up to 7 million travelers a day.”
In August, Biden’s Presidential Emergency Board released the deal’s tentative framework created in September among a dozen unions and major railroads, representing 115,000 workers. The carriers included are Berkshire Hathaway Inc’s BNSF, Norfolk Southern, Kansas City Southern Union Pacific, and CSX.
Railroads and unions have until December 9 to resolve their differences. If no resolution is reached, railroads could lock out employees, or workers could strike unless Congress steps in. Additionally, railroads would halt hazardous materials shipments at least four days before a strike deadline.