President Biden is scrambling to avert a massive railroad strike as soon as Friday that would worsen supply chain shortages, inflame high inflation and add to the rising number of walkouts under his labor-friendly administration.
The White House wouldn’t commit Tuesday to legislation to prevent a strike, despite acknowledging that a rail shutdown would cause “tremendous” harm to the economy.
“We are going to encourage them to stay at the negotiation table,” White House press secretary Karine Jean-Pierre said of the major railroad companies and two holdout unions. “They’ve come to a resolution in the past, and that’s what we’re going to focus on.”
She called a strike “not acceptable.”
Even a partial shutdown of rail traffic would compound the nation’s economic woes, including persistently high inflation that fueled a massive sell-off Tuesday on Wall Street. The Dow Jones Industrial Average fell nearly 1,276 points, or just shy of 4%, its worst day since June 2020.
The U.S. Chamber of Commerce said a rail shutdown would cause “economic disaster.”
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Union leaders have warned the White House and Congress not to intervene. They said a strike, or the threat of a strike, is the only way to get better working conditions.
Still, House Majority Leader Steny H. Hoyer, Maryland Democrat, said Congress might step in and block a strike if necessary.
“There is a role for Congress if, in fact, they fail to reach an agreement,” Mr. Hoyer told Bloomberg TV on Monday. “We can pass legislation if needed.”
Senate Majority Leader Charles E. Schumer, New York Democrat, dodged a question Tuesday about whether Democrats in Congress are prepared to prevent a rail strike.
“The bottom line is we’re urging both sides to come together and come to an agreement, period,” he said.
Despite numerous phone calls from Mr. Biden and his advisers in recent days, negotiators for both sides have been unable to reach a deal for about 115,000 freight rail workers. The deadline for avoiding a crippling strike is midnight Thursday.
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Mr. Biden spoke by phone with both sides on Monday during a trip to Boston, apparently to no avail.
“The looming railroad strike is just another example of this admin’s inability to act when it matters,” tweeted Sen. Marsha Blackburn, Tennessee Republican. “Biden’s failures surrounding our supply chain continue to pile up & many should question why the self-proclaimed ‘most pro-union president’ couldn’t deal with this major issue.”
Eleven of the 13 unions representing railroad workers have reached a tentative deal with the major railroad companies, but two unions representing conductors and engineers have not. Those two unions represent about 60,000 railroad workers.
The main sticking point in the negotiations is time off for medical appointments. The unions say the railroads’ sick time policies are being used to discipline or fire workers. The railroads say workers are abusing their sick days at a time when the companies can’t afford staffing shortages.
The railroad companies include Union Pacific, CSX, Norfolk Southern, BNSF and Kansas City Southern.
The strike also would stop service for commuter trains on routes that use tracks owned by impacted companies. Amtrak would sustain limited disruptions, mostly south of the nation’s capital.
Maryland’s MARC commuter train, which uses CSX rails, would suspend Camden and Brunswick Line service, but the Penn Line would remain in operation. Virginia commuters would have to find alternative transportation to VRE, which uses CSX and Norfolk Southern rails.
Amtrak said service would not be interrupted on the busy Northeast Corridor from Washington to Boston but some routes south of Washington would be affected. The national passenger rail service started preemptively suspending service on long-distance trips, mainly out of Chicago, on Tuesday.
In the absence of a deal, the White House acknowledged that the administration is trying to find other carriers to transport up to one-third of the nation’s freight in the event of a strike. Ms. Jean-Pierre said administration officials are “trying to figure out with other modes of transportation how to move forward.”
Trucking companies, which are dealing with a shortage of about 80,000 drivers, say they couldn’t pick up the slack. Truckers also would be hurt by the transportation snarls of a strike.
The trade association for retailers was among the business groups calling on the White House and Congress to intervene and prevent a strike if negotiators don’t reach an agreement by the deadline.
“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. “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. And based on today’s inflation report, it should be self-evident that this couldn’t come at a worse time. Policymakers need to use every tool at their disposal to avoid a self-inflicted economic disaster.”
The Labor Department reported Tuesday that the annual inflation rate in August was 8.3%, near a four-decade high, and that consumer prices ticked up 0.1% from July. A rail strike and more supply bottlenecks would add to inflationary pressures, economists say.
Strikes are on the rise nationwide under Mr. Biden, who calls himself labor’s biggest friend in Washington.
Payday Report’s Strike Tracker tallied 50 walkouts in July and 106 in August. In Minnesota this week,15,000 nurses at 16 hospitals walked out on a three-day strike, the largest private-sector nurses strike in U.S. history.
Mr. Biden prevented a railroad strike in July by imposing a 60-day cooling-off period and appointing a presidential emergency board to review the issues and recommend a settlement. The eventual recommendations called for 24% raises over five years dating back to July 2020, $5,000 in bonuses and one extra day of paid leave per year.
The cooling-off period will expire at 12:01 a.m. Friday. Only Congress can prevent a strike under the century-old Railway Labor Act, either by imposing the terms on both sides or extending the cooling-off period.
The Association of American Railroads trade group has estimated that shutting down the railroads would cost the economy $2 billion per day.
The U.S. Chamber of Commerce is among dozens of business and trade groups urging Congress to step in and block a strike if the two sides can’t reach an agreement by the deadline. It said Congress should impose the terms recommended by the presidential board.
“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,” said Suzanne Clark, president and CEO of the U.S. Chamber of Commerce.