Biden: Tentative railway labor deal reached, averting strike

President Joe Biden said Thursday that a tentative railway labor agreement has been reached, averting a strike that could have been devastating to the economy before the pivotal midterm elections.

Railroads and union representatives had been in negotiations for 20 hours at the Labor Department on Wednesday to hammer out a deal, as there was a risk of a strike starting on Friday that could have shut down rail lines across the country.

Biden made a key phone call to Labor Secretary Marty Walsh at 9 p.m. as the talks were ongoing after Italian dinner had been brought in, according to a White House official insisting on anonymity. The president told the negotiators to consider the harm to families, farmers and businesses if a shutdown occurred.

What resulted from the back and forth was a tentative agreement that will go to union members for a vote after a post-ratification cooling off period of several weeks.

“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned,” Biden said. “The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”

The threat of a shutdown had put Biden in a delicate spot politically.

The Democratic president believes unions built the middle class, but he also knew a rail worker strike could damage the economy ahead of the midterms, when majorities in both chambers of Congress, key governorships and scores of important state offices will be up for grabs.

That left him in the awkward position on Wednesday. He flew to Detroit, a stalwart of the labor movement, to espouse the virtues of unionization, while members of his administration went all-out to keep talks going in Washington between the railroads and unionized workers.

As the administration was trying to forge peace, United Auto Workers Local 598 member Ryan Buchalski introduced Biden at the Detroit auto show on Wednesday as “the most union- and labor-friendly president in American history” and someone who was “kickin’ ass for the working class.” Buchalski harked back to the pivotal sitdown strikes by autoworkers in the 1930s.

In the speech that followed, Biden recognized that he wouldn’t be in the White House without the support of unions such as the UAW and the International Brotherhood of Electrical Workers, saying autoworkers “brung me to the dance.”

But without a deal among the 12 unions in talks back in Washington, Biden also knew that a stoppage might have begun as early as Friday that could halt shipments of food and fuel at a cost of $2 billion a day.

Far more was at stake than sick leave and salary bumps for 115,000 unionized railroad workers. The ramifications could have extended to control of Congress and to the shipping network that keeps factories rolling, stocks the shelves of stores and stitches the U.S. together as an economic power.

That’s why White House press secretary Karine Jean-Pierre, speaking aboard Air Force One as it jetted to Detroit on Wednesday, said a rail worker strike was “an unacceptable outcome for our economy and the American people.” The rail lines and their workers’ representatives “need to stay at the table, bargain in good faith to resolve outstanding issues, and come to an agreement,” she said.

Biden faced the same kind of predicament faced by Theodore Roosevelt in 1902 with coal and Harry Truman in 1952 with steel — how do you balance the needs of labor and business in doing what’s best for the nation? Railways were so important during World War I that Woodrow Wilson temporarily nationalized the industry to keep goods flowing and prevent strikes.

Inside the White House, aides don’t see a contradiction between Biden’s devotion to unions and his desire to avoid a strike. Union activism has surged under Biden, as seen in a 56% increase in petitions for union representation with the National Labor Relations Board so far this fiscal year.

One person familiar with the situation, who spoke on the condition of anonymity to discuss White House deliberations on the matter, said Biden’s mindset in approaching the debate was that he’s the president of the entire country, not just for organized labor.

With the economy still recovering from the supply chain disruptions of the coronavirus pandemic, the president’s goal was to keep all parties so a deal could be reached. The person said the White House saw a commitment to keep negotiating in good faith as the best way to avoid a shutdown while exercising the principles of collective bargaining that Biden holds dear.

Biden also knew a stoppage could worsen the dynamics that have contributed to soaring inflation and created a political headache for the party in power.

Eddie Vale, a Democratic political consultant and former AFL-CIO communications aide, said the White House pursued the correct approach at a perilous moment.

“No one wants a railroad strike, not the companies, not the workers, not the White House,” he said. “No one wants it this close to the election.”

Vale added that the sticking point in the talks was about “respect basically — sick leave and bereavement leave,” issues Biden has supported in speeches and with his policy proposals.

Sensing political opportunity, Senate Republicans moved Wednesday to pass a law to impose contract terms on the unions and railroad companies to avoid a shutdown. Democrats, who control both chambers in Congress, blocked it.

“If a strike occurs and paralyzes food, fertilizer and energy shipments nationwide, it will be because Democrats blocked this bill,” said Senate Minority Leader Mitch McConnell, R-Ky.

The economic impact of a potential strike was not lost on members of the Business Roundtable, a Washington-based group that represents CEOs. It issued its quarterly outlook for the economy Wednesday.

“We’ve been experiencing a lot of headwinds from supply chain problems since the pandemic started and those problems would be geometrically magnified,” Josh Bolten, the group’s CEO, told reporters.

“There are manufacturing plants around the country that likely have to shut down. … There are critical products to keep our water clean.”
The roundtable also had a meeting of its board of directors Wednesday.

But Bolten said Lance Fritz, chair of the board’s international committee and the CEO of Union Pacific railroad, would miss it “because he’s working hard trying to bring the strike to a resolution.”

By 5:05 a.m. Thursday, it was clear that the hard work across the government, unions and railway companied had paid off as Biden announced the deal, calling it “an important win for our economy and the American people.”