video Freight rail strikes could cost US economy $2B per day: report
FOX Business’ Kelly O’Grady reports from Wilmington, California, where long-haul truckers are threatening to strike over labor negotiations.
As the Biden administration scrambles with just days to avert a rail strike that threatens to deal a devastating blow to the economy, the White House is facing pressure on multiple fronts as it weighs the political ramifications of a shutdown.
A strike could come as early as just after midnight on Friday if a deal isn't reached ahead of that time between major rail companies and the four unions that have not agreed to the current proposal put forth by the presidential emergency board (PEB) appointed by President Biden.
President Joe Biden and Labor Secretary Marty Walsh make a Labor Day visit to United Steelworkers of America Local Union 2227 in West Mifflin, Pennsylvania, on Sept. 5, 2022. (Mandel Ngan/AFP via Getty Images / Getty Images)
Labor Secretary Marty Walsh is now involved in the talks, and President Biden himself has reached out to parties involved. But if negotiations are not successful by the deadline, a strike or lockout could be triggered.
According to the Association of American Railroads (AAR), a shutdown would be absolutely devastating, costing upward of $2 billion per day and kneecapping an already fragile supply chain while hurting businesses and consumers alike.
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What's worse, other transportation modes can't keep up: the AAR says it would take roughly 467,000 long-haul trucks to pick up the slack, an unlikely prospect given that there is already a shortage of 80,000 truckers in the industry today.
With high stakes, Congress is expected to get involved if a strike is triggered. But that introduces further complications. Whether a strike occurs or not, the timing of the impasse could hurt the administration and Democrats as a whole, putting vulnerable lawmakers in a tough spot ahead of the upcoming midterm elections in November.
A BNSF Railway train is parked in Seattle. (AP Photo/Elaine Thompson, File / AP Newsroom)
Marc Scribner, a senior transportation policy analyst at the Reason Foundation, says the timing of the potential strike was coordinated and may not help the administration.
"That this might occur right before the midterm elections is entirely self-inflicted by the Biden administration, where two of President Biden's National Mediation Board [NMB] members took the bizarre step in June of terminating board-guided mediation two months early and starting the 90-day countdown to a possible rail strike," Scribner told FOX Business, calling the move "unprecedented."
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If the NMB had stuck to the original schedule, Scribner says, the cooling-off period would have ended in mid-November. But instead, the board decided to cut things short.
"This was clearly designed to force a flash right before the midterm elections," Scribner argues, speculating that the administration knows it could rely on a Congress with unified Democratic control. He added, "But I don't think they thought it through all that well because that puts a lot of pressure on Democrats facing tough races."
A BNSF rail terminal worker monitors the departure of a freight train in Galesburg, Illinois, on June 15, 2021. (AP Photo/Shafkat Anowar, File / AP Newsroom)
Scribner says the mood on Capitol Hill is very negative toward such actions because it puts lawmakers in the crosshairs — particularly when two major rail union holdouts are warning Congress not to get involved.
The leaders of the Sheet Metal, Air, Rail and Transportation Workers (SMART) Transportation Division and the Brotherhood of Locomotive Engineers and Trainmen (BLET) Teamsters Rail Conference issued a joint statement over the weekend saying that they would not agree to the PEB's proposal because it does not include improvements to working conditions, declaring that the panel's "recommendation got it wrong on this issue."
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"It’s time for the federal government to tell the CEOs who are running the nation’s railroads into the ground that enough is enough," the union leaders wrote. "Congress should stay out of the rail dispute and tell the railroads to do what other business leaders do — sit down and bargain a contract that your employees will accept."
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