Congress prepares to act on rail strike amid fears of ‘economic catastrophe’

Lawmakers are under pressure to avert a rail worker strike as soon as this week that would batter the nation’s economy just before November’s midterm elections.

Republican senators introduced a resolution to impose a new contract if negotiations between railroads and unions collapse, while Democrats say they would pass legislation to block a rail shutdown if necessary.

More than 115,000 rail workers will be legally allowed to strike on Friday.

The cooling-off period expires 30 days after the White House-appointed Presidential Emergency Board (PEB) released contract recommendations that call for 24 percent raises, back pay and cash bonuses.

The two largest railroad unions say their members won’t vote for a contract based on those guidelines, which don’t address concerns about strict attendance policies. Railroads haven’t budged from their push to ratify the PEB proposal, arguing that it’s a fair compromise.

The stalemate raises the odds of a strike, which would bring the transport of grain, fuel, lumber, car parts and other key products to a halt, likely damaging the nation’s fragile supply chains and sending prices soaring.

Some railroads are already shutting down their operations in advance of Friday’s deadline — a move that forced Amtrak to cancel some routes — putting pressure on lawmakers to intervene sooner than expected.

President Biden, who has pushed the parties to strike a deal, is attempting to craft a contingency plan to transport goods if railroads shut down.

“We are working with other modes of transportation, including shippers and truckers, air freight, to see how they can step in and keep goods moving in case of this rail shutdown,” White House press secretary Karine Jean-Pierre told reporters Tuesday.

Sens. Richard Burr (R-N.C.) and Roger Wicker (R-Miss.) on Monday night unveiled a joint resolution that would impose the PEB contract recommendations, the outcome railroads and their customers are pushing for.

House Majority Leader Steny Hoyer (D-Md.) said Monday that Congress would “pass legislation if needed” to stop a strike.

Some Democrats have privately floated proposals that would enact a more worker-friendly contract, according to people with knowledge of the discussions, but party leaders are hoping Congress won’t have to intervene at all.

Democrats face a familiar dilemma: Any resolution would require 60 votes to pass the Senate, meaning 10 Republicans would need to sign on to the deal, and some GOP lawmakers have already signaled that they’ll side with railroads.

“The PEB recommendations are a fair and appropriate solution to a years-long negotiation process, but labor unions are continuing to hold the entire nation’s rail system hostage as they demand more,” Burr said in a statement.

Congress last voted to end a railroad strike 30 years ago. If they cannot agree on contract terms, lawmakers could simply extend the cooling off period to prevent a walkout.

Ten of 12 rail unions have reached tentative agreements with railroads, or are close to doing so, to implement the PEB recommendations.

But the Brotherhood of Locomotive Engineers and Trainmen and the SMART Transportation Division, which together represent 57,000 conductors and engineers, are holding out for better terms.

They’re demanding that the contract allows workers to take unpaid time off for routine medical appointments or family emergencies without being penalized under railroads’ attendance policies. Workers have complained for years that they struggle to secure time off and are subject to unpredictable schedules.

The unions say that railroads are refusing to negotiate over the issue, knowing that Congress would likely give railroads the terms they want in the event of a strike. They’re accusing railroads of disrupting service before a strike has been approved to force Congress’s hand.

“Our unions will not cave into these scare tactics, and Congress must not cave into what can only be described as corporate terrorism,” the railway unions said in a statement.

The Association of American Railroads said in a statement that workers are not penalized if they maintain adequate availability and noted that the PEB report advised workers and supervisors to address scheduling issues on a local level rather than in a national contract.

The railroads group estimates that a national rail shutdown would cost the U.S. economy $2 billion per day, adding that trucks and other forms of transportation do not have the capacity to make up for the loss of railroads.

A separate analysis from the Michigan-based Anderson Economic Group found that a shutdown would inflict serious damage on the auto manufacturing, food and energy industries if it lasts for more than a few days but downplayed the impact of a short-lived strike.

Lobbying groups from all corners of corporate America are pushing Congress to intervene and implement the PEB recommendations this week.

Business Roundtable CEO Joshua Bolten said Tuesday that the big business group is “deeply concerned about the potential for economic catastrophe” if talks are not resolved by Thursday night.

The U.S. Chamber of Commerce wrote in a letter to congressional leaders that it is “not confident” that additional time to negotiate will lead to a breakthrough between unions and railroads.

“The negative impact of uncertainty is already being felt, and even a short strike or disruption would be disastrous,” said Brian Dodge, president of the Retail Industry Leaders Association, which represents big box stores. “Jobs will be lost, and costs will go up as shortage of raw materials and consumer goods ripples throughout the economy — it will be a double whammy.”

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