Rail Strike Averted After White House Brokers ‘Tentative’ Deal—Here’s What You Need To Know

Topline

Major freight rail companies and unions have struck a tentative deal to avert a damaging national rail strike, President Joe Biden announced early Thursday morning, a boon for his administration ahead of midterm elections and for the U.S. economy, which risked being crippled by widespread industrial action.

Key Facts

The White House said a “tentative” agreement on pay and working conditions had been reached between railroad companies and unions representing tens of thousands of rail workers to avoid a nationwide rail strike.

Biden said the deal would see “better pay, improved working conditions, and peace of mind around their health care costs” for workers, as well as allow railway companies to retain and recruit more workers.

It is “an important win” for the economy and the American people, Biden added.

Both sides had until 12:01 a.m. on Friday to avoid the strike and Biden thanked Labor Secretary Marty Walsh for brokering late night talks to secure the deal.

The White House did not release further details of the tentative agreement, which has yet to be formally ratified by unions, though it reportedly includes a key demand that workers be allowed time off for medical care without being subject to discipline, according to the Washington Post.

Union members must vote on the deal and none of the unions involved have yet commented on the issue.

Crucial Quote

Walsh said talks between rail companies and union negotiators went on for more than 20 consecutive hours. He described the “hard-fought” agreement as one that “balances the needs of workers, businesses, and our nation’s economy” and averts a strike that would have had “catastrophic impacts on industries, travelers and families across the country.”

What To Watch For

The deal will now be put to union members to vote on and ratify. It is not clear when this will happen or how long it will take, but workers have agreed not to strike while the vote is tallied, according to the New York Times.

Key Background

The Biden Administration has been desperately trying to stave off a costly shutdown of the country’s rail network ahead of a looming deadline to avert action on Friday. Unions and rail companies have been at loggerheads over working conditions, pay and other issues and little progress has been made to resolve the impasse since negotiations started in early 2020. Even a brief strike would hurt American consumers and the economy at a crucial political moment—midterms are coming up and the economy is recovering from the pandemic and managing soaring inflation—and could cost an estimated $2 billion a day, as well as disrupt food deliveries, power and other goods before the holiday seasons. Lawmakers, including Biden and House Majority Leader Steny Hoyer, considered intervening to avert a shut-down of freight operations. The clash puts Biden in an especially difficult position, balancing the upcoming elections and economic recovery with his pledge to be the “most pro-union president” ever.

Further Reading

Railroad Dispute: White House Tries To Avert $2 Billion A Day Transportation Strike (Forbes)

Biden faces a looming economic disaster that he can actually stop (Politico)