A potential economic catastrophe threatening to cost the U.S. economy up to $2 billion daily was averted as Congress passed crucial legislation to prevent a nationwide freight rail strike. The Senate followed the House in approving measures to enforce labor agreements that had stalled between rail carriers and remaining unions.
President Joe Biden signed the bill into law after both chambers of Congress acted with unusual speed. "I want to thank Congress—Democrats and Republicans—for acting so quickly," Biden said before signing. "I know this was a tough vote for members of both parties, and for me as well. But it was the right thing to do at the moment to save jobs, to protect millions of working families from harm and devastation, and to keep supply chains stable around the holidays."
Terms of the Agreement
The legislation implements recommendations from the Presidential Emergency Board (PEB) appointed by Biden, which included:
- 24% wage increases over five years (2020-2024)
- An immediate 14.1% wage hike
- Five annual $1,000 lump-sum payments
The National Carriers' Conference Committee (NCCC), which represents freight railroads in national collective bargaining, noted some lump-sum payments would be retroactive and paid immediately upon union ratification.
Outstanding Issues
The main sticking points between remaining unions and railroads centered on sick leave, scheduling, and staffing shortages. When the House passed its legislation, eight of twelve rail labor organizations had fully ratified tentative agreements, with nine of thirteen contracts approved (SMART-TD had two separate contracts).
The holdout unions included the Brotherhood of Railroad Signalmen (BRS), SMART-TD (for one of its contracts), the Brotherhood of Maintenance of Way Employes Division (BMWED), and the International Brotherhood of Boilermakers (IBB).
Legislative Timeline
With the December 9 deadline looming, the House passed H.J. Res. 100 on November 30 to resolve outstanding disputes. The Senate subsequently approved implementing the PEB's tentative agreement terms.
A companion resolution (H. Con. Res. 119) proposing seven annual paid sick days for rail employees failed in the Senate. The American Association of Railroads (AAR) strongly supported the Senate's action.
Industry Perspective
AAR President and CEO Ian Jefferies stated: "The Senate acted with leadership and urgency in passing yesterday's vote to avoid an economically devastating rail shutdown. As we close this long and challenging process, no party got everything they advocated for."
Jefferies emphasized the agreement's benefits:
- Historic wage increases—the highest in over 50 years
- Premium healthcare coverage with below-average employee contributions
- Improved scheduling predictability
- Average total compensation reaching $160,000 by contract's end
The AAR had repeatedly warned that a strike could cost the economy $2 billion daily, citing its September report. The NCCC expressed relief that uninterrupted rail service would continue through the holidays and beyond, while acknowledging ongoing concerns about paid leave benefits that would be addressed in future negotiations.