WASHINGTON — President Joe Biden hailed a tentative railway labor agreement, one that he helped broker and that averted an economically perilous nationwide work stoppage less than two months ahead of the November midterm elections.
Biden called the deal “a big win for America” after 20 hours of marathon talks between railroad and union representatives successfully concluded in the early morning — just hours before a Friday deadline to avoid a possible strike that was poised to shut rail lines across the country.
“This agreement is a validation of what I’ve always believed, unions and management can work together — can work together — for the benefit of everyone,” Biden said in a speech Thursday from the White House Rose Garden.
A work stoppage would have snarled supply chains and fueled red-hot inflation, while putting Democrats at greater risk of losing control of Congress in the midterms. Instead, the president is coming away with a deal that could prove to be a validation of his negotiating skills.
Biden called into talks mediated by Labor Secretary Marty Walsh at 9 p.m., according to a White House official, after negotiators dined on Italian food. Using forceful language, the president repeatedly said that failing to reach a deal was not an option, according to people familiar with the call who requested anonymity to discuss what was said.
The president urged both sides to make compromises, underscoring the widespread damage to the economy that Americans would grapple with if freight trains stopped moving, the people said. Union advocates and officials familiar with the call said that Biden’s involvement was pivotal in getting both sides to agree, with one saying it was unclear how negotiations would go at the time Biden called.
Biden joked during an Oval Office meeting Thursday with negotiators, top aides and Cabinet officials, ahead of his formal remarks, that he could not believe the participants were “still standing.”
“Should be home in bed, 20 straight hours,” he said.
Unions still must vote to ratify the preliminary deal after a so-called “cooling off” period that could last several weeks. It’s not a guarantee that union members — who have been furious with employers for years over working conditions — will ratify, according to one person familiar with the negotiations.
But unions have agreed not to strike during the cooling-off period, meaning the railways will continue to run and key freight from corn to cars will reach its destination. A rail stoppage could have cost the economy roughly $2 billion per day.
Companies began curtailing shipments of hazardous materials and new automobiles this week in anticipation of a shutdown, a preview of the economic damage that could have been wrought by a strike.
A work stoppage also could have had calamitous effects on passenger railroads. Outside the Northeast Corridor, Amtrak and commuter rail lines run trains on rails owned by freight companies. Amtrak preemptively canceled all long-distance trains starting Thursday, but said after the agreement was reached it was working to “quickly restore” train service to normal.
The cancellations didn’t affect travel in major eastern cities such as New York and Washington, where Amtrak operates its own lines.
Freight carrier CSX Corp. announced Thursday it was resuming normal operations, including lifting an embargo on hazardous materials and other sensitive shipments. Norfolk Southern Corp. also said it would immediately restore typical operations including those that had been curtailed.
“They’re really the backbone of the economy,” Biden said of the railroads.
The tentative freight-rail agreements include a 24% wage increase over five years, 2020 through 2024, including 14.1% effective immediately, as well as five annual $1,000 payments, the National Carriers’ Conference Committee representing railroads said.
The deal also includes new medical leave policies, according to two unions, a key concession to labor groups that had held out for the ability to miss work for health emergencies without being fired or reprimanded. Rail workers will receive one additional paid off day per year plus the ability to take unpaid leave for medical procedures or doctor’s appointments.
“This is a win for tens of thousands of rail workers, and for their dignity — and the dignity of their work,” Biden said.
Shares of major freight railroads were mixed after the pact was announced. CSX fell 2.5% while Union Pacific Corp. rose 1.7% and Norfolk Southern gained less than 1% as of 12:59 p.m. in New York.
The threat of a freight-rail shutdown posed a complicated challenge for Biden, who promised to be the most pro-union president in U.S. history. But he also faced the prospect of widespread economic devastation in the event of a strike, which could have blunted Democrats’ pre-election political momentum.
The administration’s involvement dated back months but ramped up this week as talks approached a breaking point. Biden sought a full briefing on Sunday, after attending a Sept. 11 memorial, and became personally engaged in the talks Monday after a weekend negotiating session between Walsh and the two sides failed to yield a deal.
As union leaders arrived at the Department of Labor Wednesday morning, they didn’t believe they would come to a deal. “We didn’t expect an agreement to come out of this,” said Jeremy Ferguson, president of the SMART Transportation Division.
When no deal was reached by lunch, the group believed they were headed toward a strike, according to a union official involved in the talks.
Biden received updates throughout Wednesday, including during a visit to the Detroit auto show, where he espoused the virtues of union labor. Biden convened a meeting of senior staff Wednesday evening after returning to the White House, getting the latest on talks before calling in.
In addition to Walsh, Transportation Secretary Pete Buttigieg and Agriculture Secretary Tom Vilsack, top White House economic adviser Brian Deese and National Economic Council adviser Celeste Drake were involved in the talks.
Biden’s advisers made clear to negotiators during the final stretch that congressional action was not a viable way to avert a strike and that they had to make a deal themselves. Federal law gives Congress the power to intervene to stop a rail strike, but officials said there were not enough votes in the Senate on a single way to do that.
After Sen. Bernie Sanders, I-Vt., blocked a resolution from Republican Richard Burr to force the two sides to accept the recommendations of a presidential emergency board, union leaders said it became clear only their negotiations could avert a shutdown.
“The fact that Congress stayed out of it was very pivotal,” said Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen.
House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer and Sanders also worked the phones, making calls to both sides, Pierce said.
When Biden called in to a video chat around 9 p.m., “we had a long way to go yet,” Ferguson said.
Hours later, Walsh phoned the White House around 2 a.m. on Thursday morning to inform officials a deal was coming together, triggering a frenzy of calls and preparation. White House officials began to wake up people in advance of an agreement. One union had to stir awake board members to get sign-off on the deal.
At 5 a.m., Biden announced the deal in a paper statement.
“For the American people, the hard work done to reach this tentative agreement means that our economy can avert the significant damage any shutdown would have brought,” he said.
