Biden administration scrambles to avoid possible railroad strike as deadline approaches

The Biden administration is stepping up its involvement in negotiations between rail companies and unions representing railroad workers as the deadline approaches to avert a potential strike that threatens to cripple the economy just before the midterm elections.

The National Mediation Board and US Labor Secretary Marty Walsh met with the major freight railroads and unions involved on Wednesday and began further discussions this week to reach an agreement before the current contract expires. At midnight on Friday September 16, the department and a railway group told Reuters.

US Secretary of Labor Marty Walsh speaks at a press conference after visiting the Port of Los Angeles. (Mario Tama/Getty Images/Getty Images)

President Biden appointed an Emergency Presidential Board (PEB) in July that proposed a plan for 24% cumulative increases and thousands more bonuses on a five-year contract covering some 115,000 railroad workers.

But so far only five of the 13 unions involved have accepted the deal, leaving a long way to go over the next seven days to avoid a critical rail freight shutdown that could potentially decimate an already fragile supply chain.

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The Association of American Railroads (AAR) said Thursday that a rail shutdown would cost the economy more than $2 billion a day, warning in a press release that a strike would “immediately harm all economic sectors by rail” and “would trigger retail product shortages, widespread production stoppages” and “job losses”.

The head of the country’s biggest railway union says the report designed to help resolve stalled contract negotiations with freight railways has not done enough to address concerns over working conditions, even if he recommended increases of 24%. (AP Photo/Shafkat Anowar, File/AP Newsroom)

The association has alerted Congress to be ready if a deal is not reached in time and a strike occurs, urging lawmakers to impose the PEB deal if it steps in to oversee negotiations under railway labor law.

“Like the unions that have already tentatively accepted the PEB agreement, each of the remaining unions may still enter into agreements based on these recommendations,” AAR President and CEO Ian Jefferies said in a statement. “However, if negotiations fail and result in a work stoppage, Congress must act to implement PEB recommendations – reward employees and end unnecessary economic damage and uncertainty for rail customers.”

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The nation’s largest railroad union, the Sheet Metal, Air, Rail and Transportation Workers (SMART), is one of eight unions that did not accept the PEB deal. SMART Chairman Jeremy Ferguson said last week that while the PEB agreement is a “great improvement” over previous railway proposals, “the recommendations do not go far enough to provide our members with the quality of life that they have earned, and that both they and their families deserve.”

Labor expert and president of the National Foundation for the Right to Work Mark Mix said he suspected a last-minute deal would ultimately be struck to avert a strike, given the effects that a closure of the rail would have on the whole economy. (AP Photo/Elaine Thompson, File/AP Newsroom)

Labor expert and president of the National Foundation for the Right to Work Mark Mix told FOX Business that he suspects a last-minute deal will eventually be struck to avert a strike, given the effects of catastrophic drag that a rail closure would have on the whole economy.

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“If they really stop all the trains… boy, can the economy take another hit like this?” said Mix. “We’ve got food shortages, we’ve got droughts and water issues on the West Coast, and now if we layer all of that – this power that unions have gotten over very essential parts of our economy – they can hold the whole country hostage.”

Ken Martin of FOX Business and Reuters contributed to this story.