President Biden announced early Thursday morning that days of negotiations at the U.S. Department of Labor to avert a national rail strike,, had yielded a deal.
In a statement, Mr. Biden said the “tentative agreement” between the railroads and rail workers’ unions was “an important win for our economy and the American people” and “a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America’s families and communities got deliveries of what have kept us going during these difficult years.”
Mr. Biden said U.S. rail workers would “get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned,” thanks to the agreement, which he said was “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 president met with negotiators in the Oval Office later Thursday morning, calling the rail system “the backbone of the nation” in brief comments, before delivering formal remarks on the agreement.
“This agreement is a big win for America and for both, in my view,” he said during his Rose Garden speech, adding that the tentative labor deal is “validation of what I’ve always believed: Union and management can work together.”
“To the American people,” Mr. Biden continued, “this agreement can avert the significant damage that any shutdown would have brought. Our nation’s rail system is the backbone of our supply chain, everything you rely on.”
The deal will now go to the unions for a vote to finalize the agreement. The presidents of the unions representing rail workers said the breakthrough provides for “the highest general wage increases over the life of the agreement in over 45 years.”
Workers will get an immediate 14% raise, with a total raise of 24% over the course of the five-year deal, the unions said. They will also get annual bonuses of $5,000 and keep their health care copays and deductibles unchanged.
Significantly, all workers will get an extra paid day off and have the ability to take time off for medical reasons, one of the key demands the unions made over the course of negotiations.
“For the first time, our unions were able to obtain negotiated contract language exempting time off for certain medical events from carrier attendance policies,” the union chiefs said.
A source familiar with the labor talks told CBS News that the negotiating parties had agreed to a “post-ratification cooling off period” of several weeks, to make sure that there isn’t an immediate rail shutdown if a vote doesn’t succeed for any reason.
Labor Secretary Marty Walsh oversaw a marathon negotiation session Wednesday at the Labor Department that led to the agreement, and CBS News learned that Mr. Biden made what one source described as a “crucial call” into the negotiations around 9 p.m. local time on Wednesday evening.
Walsh said in a tweet that “following more than 20 consecutive hours of negotiations” at the Labor Department, “the rail companies and union negotiators came to a tentative agreement that balances the needs of workers, businesses, and our nation’s economy.”
The announcement came hours after Amtrakfrom Thursday amid the threat of a strike, which could have disrupted not only passenger and freight services, but the U.S. economy. Rail companies had warned the strike could result in lost productivity of $2 billion a day.
In light of the agreement announced on Thursday morning, Amtrak said it was “working to quickly restore” the cancelled trains “and reaching out to impacted customers to accommodate on first available departures.”
The root of the problem was a labor dispute between railroad companies and their unionized workforces. If the two sides hadn’t come to an agreement, the strike was set to have begun just after midnight on Friday.
A Labor Department spokesperson told CBS News on Wednesday evening that dinner was ordered and the talks in Washington among federal officials, railroad executives and railroad worker union leaders were ongoing. Mr. Biden’s statement about the agreement came at about 5 a.m. on Thursday.
Without the deal, the strike would have begun Friday at the end a 30-day “cooling-off” period mandated under terms of the Railway Labor Act, which governs contract talks in the railroad and airline industries.
It was the Association of American Railroads that had warned halting freight trains could cost the U.S. economy more than $2 billion per day. If a shutdown were to last more than a few days, the impact would likely be felt by millions of consumers, as it would disrupt shipping of virtually all retail products, coal, other fuels and manufacturing components.
Commuters would also be out of luck, as many passenger trains run on the freight tracks that would be idled in a strike, experts say.
In the past, most recently in 1986, Congress has acted to end railroad strikes. If no agreement had been reached this week, both houses could have passed a joint resolution — that the president would have had to sign — effectively forcing the rail workers to keep working under terms laid out by an emergency board established by the White House earlier this year. The U.S. Chamber of Congress had urged Congress to stand by and be ready to intervene before Thursday morning’s agreement was announced.
In a statement lauding Mr. Biden and the labor secretary for their roles in the negotiations, Speaker of the House Nancy Pelosi confirmed that Congress had “stood ready to take action… to ensure the uninterrupted operation of essential transportation services.”
“Led by the Transportation and Infrastructure Committee, the House prepared and had reviewed legislation, so that we would be ready to act, pursuant to Section 10 of the Railway Labor Act,” said Pelosi. “Thankfully this action may not be necessary.”
Ed O’Keefe, Steven Portnoy and Kathryn Krupnick contributed to this report.