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Biden signs bill averting railroad strike despite lack of paid sick leave

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President Joe Biden has signed a bill making a railroad strike illegal, preventing workers from leaving work weeks before the holiday season.

“The bill I’m about to sign ends a difficult rail dispute and helps our nation avoid what, no doubt, would have been an economic disaster at a very bad time in the calendar,” Biden said. Friday morning before signing the bill.

After his administration helped negotiations for months and the parties reached a tentative agreement in September, talks were eventually stalled and rail workers threatened to strike. Biden then asked Congress to intervene, and the Senate on Thursday passed a bill making a strike illegal.

The initial deal brokered by the Biden administration was accepted by all but four railroad unions, which were waiting for guaranteed paid sick days. The opposing unions, however, represent the majority of railway workers. Workers and companies had until Dec. 9 to reach an agreement before pledging to strike, which industry said would cost the U.S. economy $2 billion a day.

“Our country’s rail system is literally the backbone of our supply chain,” Biden said Friday. “Much of what we depend on is delivered by rail, from clean water to food and gas and all other goods. A rail closure would have devastated our economy. Without freight rail, many our industries would have literally shut down.”

A strike by railway workers so close to the holiday season – and in a time of high inflation – could potentially flatten the economy. Biden insisted that Congress send the legislation to his office by Saturday. Without an agreement, the rail movement of certain goods was to be reduced from this weekend in preparation for the strike.

Biden, when signing the bill on Friday, said his economic advisers told him that up to 765,000 Americans, “many of whom were unionized themselves,” would have lost their jobs.

Rail carriers are beginning to prepare for a strike seven days in advance, in accordance with federal security measures. Carriers are beginning to prioritize securing and moving sensitive materials such as chlorine for potable water and hazardous materials.

Ninety-six hours before a strike date, chemicals are no longer transported. The American Chemistry Council saw a drop of 1,975 carloads of chemical shipments in the week of September 10, when the railroads stopped accepting shipments due to the previous threat of a strike railways.

The four major railroads also typically carry more than 80% of agricultural freight traffic, according to the National Grain and Feed Association.

Congress has the power to regulate interstate commerce under Article 1, Section 8 of the Constitution, and the Supreme Court has ruled that it can use that power to intervene in railroad worker disputes that may affect the trade between states. A nearly century-old law, the Railway Labor Act of 1926, gives the president the power to also intervene in situations where a railway strike could significantly affect essential transportation. The law has been invoked 18 times since its enactment.

The House on Wednesday approved a separate measure that would have added seven days of paid sick leave to the contract instead of just one. Although he enjoyed bipartisan support in both houses, this measure was rejected in the Senate vote. Biden while signing the bill thanked Congress for moving so quickly even though he acknowledged it was not an easy vote.

“I know it was a tough vote for members of both parties. It was a tough vote for me,” Biden said. “But it was the right thing to do at this time to save jobs, protect millions of working families from harm and disruption, and keep the supply chain stable over the holidays.”

The situation has put the “Joe” Biden syndicate in a difficult position. Biden said Thursday he supports unions as much as ever, but as president of the United States, rather than just a senator from Delaware, it was his job to watch over all Americans. He said he has long been a supporter of paid sick leave and will always work to make it a right for all workers, not just railway workers.

The initial White House-brokered deal would give railroad workers a 24% wage increase over five years from 2020 to 2024, immediate payments averaging $11,000 upon ratification. Under the agreement, workers would receive an additional paid day off and the promise that they could attend medical appointments without penalty.

Workers, however, balked at the lack of paid sick leave, as under the agreement they would have to use unpaid time off for medical appointments. Biden acknowledged his disappointment Friday that paid sick leave was not included in the deal.

“Look, I know this bill doesn’t have paid sick leave that these workers, frankly all working Americans, deserve, but this fight isn’t over,” Biden said. “I didn’t commit to quitting, it was because we couldn’t put it in this bill that we were going to stop fighting for it. I have long supported paid sick leave and I will continue this fight until we succeed.”

Union leaders told CNBC they will remember who sided against them in the next election. Union support was key to forming Biden’s ultimately winning coalition in the 2020 election.

“Our members will support anyone who stands with them,” said Tony Cardwell, president of the Way Maintenance Brotherhood Employee Division. “It looks like the Democrats are standing with our members and making sure our members get sick leave. If that’s the case, we’ll do it. If the Republicans are bold enough to walk away, stand alongside workers, stand alongside blue collar workers, and vote with our members, then chances are they can win votes as well.”

The provision to add seven days of paid sick leave failed the Senate in a 52-43 vote. All Democrats present to vote supported it except Sen. Joe Manchin, DW.V. Six Republicans also backed the measure.

In the House, three GOP representatives joined all Democrats in passing the sick leave proposal.

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