Potential rail strike squeezes Biden between unions and economic peril

TThe Biden administration is pressuring unions and freight rail operators to agree on a new contract before a Friday deadline to avert a strike that risks disrupting US economy and undermining The Democratic midterm elections prospects.

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

Underscoring how high the stakes are for Biden, the official said the administration has made it clear to negotiators that shutting down the freight rail system is an unacceptable outcome for the economy.

Labor Secretary Marty Walsh on Sunday night again pressed the parties to reach a resolution, the Labor Department said in a statement Monday. Cabinet and administration officials have made dozens of calls to the parties involved, and Walsh is delaying a trip to Ireland to deal with the impasse, a department official said.

Freight railroads and unions worked through the weekend in an effort to hammer out a new contract to avoid a strike that could cripple supply chains, disrupt agricultural supplies and cost the U.S. economy more than $2 billion a day.

Read more: American companies have always been more anti-union than international ones. that’s why

A strike would also carry significant political risk for Biden and his fellow Democrats, whose efforts to retain his House and Senate majorities in the Nov. 8 election have been boosted by a string of legislative victories and improving economic news. Supply chain disruptions less than two months before voters go to the polls could hurt Democrats and put Biden, who has promised to be the most pro-union president in history – at a dead end.

While 10 of 12 railroad unions have signed new labor agreements, the two sides — the Brotherhood of Locomotive and Train Engineers and the International Sheet Metal Workers, Railroad and Transportation Association — represent more than 90,000 railroad workers.

The railways has notified customers of some potential service disruptions starting on Monday if negotiations do not progress before a potential walkout on September 17. Six Class I railroads will begin taking steps to “manage and secure” shipments of certain hazardous or sensitive materials starting Monday, the Association of American Railroads, a trade group, said in a statement.

The shutdown could also disrupt food supplies and make for a particularly dangerous time, said Brooke Appleton, vice president of public policy at the National Corn Growers Association.

“Rail is a major part of the agricultural supply chain, especially as we approach the harvest season, so any disruption to rail service would have a negative and lasting impact on our producers,” Appleton said via email. “Given what is at stake for the agricultural community and other sectors of the economy, we are hopeful that all parties will reach an agreement.”

Emergency Board

The railroads and workers face years of tough negotiations that began in January 2020, shortly after the labor contract froze at 2019 levels. After the National Mediation Board failed to reach an agreement this summer, the President’s Emergency of the Biden administration recommended 24% compound salary increase through 2024 and $5,000 in bonuses, including some retroactive items. AAR said such a wage increase would be the largest in at least 40 years.

Congress will act to prevent a strike that could shut down freight rail operations across the country, House Majority Leader Steny Hoyer said Monday.

Read more: Airplanes, trains and cars reduce emissions. Will the big ships do it too?

“There’s a role for Congress if they can’t actually reach an agreement,” the Maryland Democrat said on Bloomberg Television’s Balance of Power with David Westin. “We can legislate if necessary.”

Industry groups, including the U.S. Chamber of Commerce, have urged lawmakers to intervene by extending Friday’s deadline for a deal or forcing both sides to accept a deal.

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

Congress has the power to delay or stop railroad shutdowns entirely. In 1986, lawmakers extended the no-strike rule by 60 days to continue negotiations with the Maine Central Railroad Union.

And in 1991, Congress ended the national railroad strike less than 24 hours after it began by joint resolution. The House vote was 400-5.

– With the assistance of Kim Chipman and Ian Kuhlgren.

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