Politics

(Reuters) – Major U.S. railroads and unions secured a tentative deal after 20 hours of intense talks brokered by the Biden administration to avert a rail shutdown that could have hit food and fuel supplies nationwide.

Shares of Union Pacific Corp and CSX Corp were up about 3% before the bell.

Following are some reactions to the tentative deal:

U.S. HOUSE SPEAKER NANCY PELOSI

“The report of a tentative agreement between railroads represented by labor unions and the National Carriers’ Conference Committee is good news for our nation’s economy, our security and the well-being of the American people. I commend President Biden for his personal involvement and insistence on resolution and especially Labor Secretary Marty Walsh for leading the negotiations.”

NATIONAL RETAIL FEDERATION

“We are relieved and cautiously optimistic that this devastating nationwide rail strike has been averted. We appreciate the Biden administration’s intervention on behalf of the businesses and consumers who would have been impacted at a time when high inflation and economic uncertainty are challenging consumer budgets and putting business resiliency at risk.”

“We hope railway workers will accept the new terms of the proposed contract and the railway system can continue to operate on behalf of the millions of hardworking Americans who rely on it for their jobs and the economic security of our country.”

MIKE STEENHOEK, EXECUTIVE DIRECTOR, SOY TRANSPORTATION COALITION

“We are extremely pleased both sides were able to arrive at an agreement. Our nation’s railroads are integral to the success of the American farmer. Without cost-effective, reliable rail service, so much of what farmers produce will never connect with our domestic and international customers.”

“American farmers are responding to the challenges of global food insecurity. We need our nation’s railroads to be a reliable partner in this effort. A strike, lockout, or significant slowdown would have imposed significant harm on agriculture – particularly on the eve of harvest.”

IPEK OZKARDESKAYA, SENIOR ANALYST AT SWISSQUOTE BANK

“Avoiding a strike is good news for equities, there won’t be additional pressure on supply chains, and inflation expectations.”

“It’s great news, it’s one less issue to worry about for investors. Obviously there is no good time for a strike. But this week is really a particularly bad week!”

(Compiled by Kannaki Deka, Priyamvada C and Bansari Mayur Kamdar in Bengaluru; Edited by Shounak Dasgupta)

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By Trevor Hunnicutt

WASHINGTON (Reuters) -Major U.S. railroads and unions secured a tentative deal after 20 hours of intense talks brokered by the Biden administration to avert a rail shutdown that could have hit food and fuel supplies across the country and beyond.

If they accept the deal, workers whose pay had been frozen will win double-digit increases and exceptions to employer attendance polices that will allow them to seek certain types of medical care without fear of being punished, union leaders said. The agreement includes an immediate 14.1% wage rise, the railroads said.

U.S. President Joe Biden announced the deal early on Thursday morning, calling it “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.”

Unions will now vote on the agreement. Even if those votes fail, a rail shutdown that could have happened as soon as midnight Friday has been averted for several weeks due to the standard language included in such a deal, a person familiar with the negotiations said.

A rail shutdown could have frozen almost 30% of U.S. cargo shipments by weight, stoked inflation, cost the U.S. economy as much as $2 billion per day and unleashed a cascade of transport woes affecting the U.S. energy, agriculture, manufacturing, healthcare and retail sectors.

The impact would have stretched beyond U.S. borders because trains link the United States to Canada and Mexico and provide vital connections to massive ships that ferry goods from around the globe.

Biden administration officials hosted labor contract talks into the night on Wednesday aiming to secure an agreement between unions which represent 115,000 workers and railroads including Union Pacific, BNSF, CSX, Norfolk Southern and Kansas City Southern.

Shares of Union Pacific and CSX were up between 1.8% and 3% in pre-market trading. U.S. natural gas futures dropped about 6% after soaring 10% in the prior session. Investors expect a rail strike would threaten coal supplies to power plants and boost demand for gas.

Negotiations between the companies and a dozen unions had stretched for more than two years, leading Biden to appoint an emergency board to help break the impasse.

Biden himself called Labor Secretary Marty Walsh and negotiators around 9 p.m. on Wednesday and told them “once again to recognize the harm” that the failure to reach a deal would have on families, farmers and businesses, according to a person aware of the negotiations.

Talks at the Washington, D.C., Labor Department headquarters went on for 20 hours straight until early Thursday morning. Officials are expected to host a news briefing later Thursday.

Failing to reach a deal before the deadline of one minute after midnight on Friday would have cleared the way for workers to legally strike.

Amtrak, which runs passenger rail, said it was working to restore services after cancelling long-distance trains on Thursday in anticipation of a strike.

National Retail Federation CEO Matthew Shay thanked the Biden administration for intervening, adding in a statement that his group is “relieved and cautiously optimistic.”

Freight railroads had halted transportation of hazardous goods, including chlorine for water purification and ammonia for fertilizer, as well as shipments of refrigerated food and other goods that use rail and at least one other mode of transport. Their goal was to prevent cargo from being stranded in unsafe locations.

JOB CUTS

The railroad industry slashed almost 30% of its workforce over the last six years, cutting pay and other costs as they increased profits, stock buybacks and dividends for investors. Profits at billionaire Warren Buffett’s Berkshire Hathaway, which owns BNSF, rose 9.2% in the most recent quarter to $1.7 billion.

The number of U.S. railway workers has dropped from over 600,000 in 1970 to about 150,000 in 2022, according to the Bureau of Labor Statistics, due technology and cost-cutting. The result is that many industry workers are on call at all hours, waiting to respond at short notice to work for days at a time.

Biden, who has called himself the most union-friendly president in history and attacked companies for raking in “excessive” profits, praised a deal he said would give workers “better pay, improved working conditions, and peace of mind around their health care costs.”

The president is not yet out of the woods when it comes to supply-chain labor issues. Some 22,000 union workers at 29 West Coast ports that handle almost 40% of U.S. imports are also in high-stakes labor contract negotiations.

Administration officials want the disputes resolved ahead of November’s midterm elections for control of Congress.

Senior congressional leaders had threatened to pass legislation imposing a resolution on the railroads and unions if the negotiations were not successful.

U.S. House Speaker Nancy Pelosi praised the tentative agreement and said that Congress was “ready to act” but that “thankfully this action may not be necessary.”

(Reporting by Trevor Hunnicutt in Washington; Additional reporting by Lisa Baertlein in Los Angeles, David Shepardson and Susan Heavey in Washington, Jahnavi Nidumolu, Aishwarya Nair, Bansari Mayur Kamdar and Kannaki Deka in Bengaluru; Editing by Heather Timmons and Catherine Evans)

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WASHINGTON (Reuters) – Major U.S. railroads and unions secured a tentative deal after 20 hours of intense talks brokered by the Biden administration to avert a rail shutdown that could have hit food and fuel supplies nationwide.

U.S. President Joe Biden announced the deal in a statement early Thursday morning, calling it “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.”

The tentative deal now goes to the unions to be voted on, according to a person familiar with the negotiations.

Even if those votes fail, a rail shutdown that could have happened as soon as midnight Friday has been averted for several weeks due to the standard language included in such a deal, this person said.

A rail shutdown could freeze almost 30% of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy as much as $2 billion per day and unleash a cascade of transport woes affecting the U.S. energy, agriculture, manufacturing, healthcare and retail sectors.

Biden administration officials hosted labor contract talks into the night on Wednesday aiming to secure an agreement between unions which represent 115,000 workers and railroads including Union Pacific, BNSF, CSX, Norfolk Southern and Kansas City Southern.

Shares of U.S. railroad operators rose between 2.4% and 2.9% in pre-market trade.

Negotiations between the companies and a dozen unions had stretched for more than two years, leading Biden to appoint an emergency board to help break the impasse.

Biden himself called U.S. Labor Secretary Marty Walsh and negotiators around 9 p.m. on Wednesday to advance talks, according to a person aware of the negotiations, which lasted 20 hours.

Failing to reach a deal before the deadline of one minute after midnight on Friday would have cleared the way for workers to legally strike.

The railroad companies involved have cut jobs and trimmed pay and other costs in recent years as they increased profits, stock buybacks and dividends for investors. Profits at billionaire Warren Buffett’s Berkshire Hathaway, which owns BNSF, rose 9.2% in the most recent quarter to $1.7 billion.

The number of U.S. railway workers has dropped from over 600,000 in 1970 to about 150,000 in 2022, according to the Bureau of Labor Statistics, due both to technology and cost-cutting.

Biden, who has called himself the most union-friendly president in history and pilloried companies for raking in “excessive” profits, praised a deal that he said would give workers “better pay, improved working conditions, and peace of mind around their health care costs.”

Administration officials have been eager to resolve the dispute that threatened fresh goods shortages and added consumer price inflation ahead of November’s midterm elections for control of Congress.

Senior congressional leaders had threatened to pass legislation imposing a resolution on the railroads and unions if the negotiations were not successful.

U.S. House Speaker Nancy Pelosi praised the tentative agreement and said that Congress was “ready to act” but that “thankfully this action may not be necessary.”

(Reporting by Trevor Hunnicutt in Washington; Additional reporting by Susan Heavey in Washington, Jahnavi Nidumolu, Aishwarya Nair and Kannaki Deka in Bengaluru; Editing by Jason Neely, Devika Syamnath, Shounak Dasgupta, Heather Timmons and Catherine Evans)

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WASHINGTON (AP) — President Joe Biden’s popularity improved substantially from his lowest point this summer, but concerns about his handling of the economy persist, according to a poll from The Associated Press-NORC Center for Public Affairs Research.

Support for Biden recovered from a low of 36% in July to 45%, driven in large part by a rebound in support from Democrats just two months before the November midterm elections. During a few bleak summer months when gasoline prices peaked and lawmakers appeared deadlocked, the Democrats faced the possibility of blowout losses against Republicans.

Their outlook appears better after notching a string of legislative successes that left more Americans ready to judge the Democratic president on his preferred terms: “Don’t compare me to the Almighty. Compare me to the alternative.”

The president’s approval rating remains underwater, with 53% of U.S. adults disapproving of him, and the economy continues to be a weakness for Biden. Just 38% approve of his economic leadership as the country faces stubbornly high inflation and Republicans try to make household finances the axis of the upcoming vote.

Still, the poll suggests Biden and his fellow Democrats are gaining momentum right as generating voter enthusiasm and turnout takes precedence.

Average gas prices have tumbled 26% since June to $3.71 a gallon, reducing the pressure somewhat on family budgets even if inflation remains high. Congress also passed a pair of landmark bills in the past month that could reshape the economy and reduce carbon emissions.

Republicans have also faced resistance since the Supreme Court overturned Roe v. Wade and its abortion protections. And Biden is openly casting former President Donald Trump as a fundamental threat to democracy, a charge that took on resonance after an FBI search of Trump’s Florida home found classified documents that belong to the U.S. government.

This combination of factors has won Biden some plaudits among the Democratic faithful, even if Americans still feel lukewarm about his leadership.

“I’m not under any belief that he’s the best person for the job — he’s the best from the people we had to choose from,” said Betty Bogacz, 74, a retiree from Portland, Oregon. “He represented stability, which I feel President Trump did not represent at all.”

Biden’s approval rating didn’t exceed 40% in May, June or July as inflation surged in the aftermath of Russia invading Ukraine.

The president’s rating now is similar to what it was throughout the first quarter of the year, but he continues to fall short of early highs. His average approval rating in AP-NORC polling through the first six months of his term was 60%.

Driving the recent increase in Biden’s popularity is renewed support among Democrats, who had shown signs of dejection in the early summer. Now, 78% of Democrats approve of Biden’s job performance, up from 65% in July. Sixty-six percent of Democrats approve of Biden on the economy, up from 54% in June.

Interviews suggest a big reason for Biden’s rebound is the reemergence of Trump on the national stage, causing voters such as Stephen Jablonsky, who labeled Biden as “OK,” to say voting Democratic is a must for the nation’s survival.

“The country has a political virus by the name of Donald Trump,” said Jablonsky, a retired music professor from Stamford, Connecticut. “We have a man who is psychotic and seems to have no concern for law and order and democracy. The Republican Party has gone to a place that is so unattractive and so dangerous, this coming election in November could be the last election we ever have.”

Republicans feel just as negative about Biden as they did before. Only about 1 in 10 Republicans approve of the president overall or on the economy, similar to ratings earlier this summer.

Christine Yannuzzi, 50, doubts that 79-year-old Biden has the capacity to lead.

“I don’t think he’s mentally, completely aware of everything that’s happening all the time,” said Yannuzzi, who lives in Binghamton, New York. “The economy’s doing super poorly and I have a hard time believing that the joblessness rate is as low as they say it is.”

“I think the middle class is being really phased out and families are working two and three jobs a person to make it,” the Republican added.

Twenty-nine percent of U.S. adults say the economy is in good shape, while 71% say it’s doing poorly. In June, 20% said conditions were good and 79% said they were bad.

Democrats are more positive now than they were in June, 46% vs. 31%. Republicans remain largely negative, with only 10% saying conditions are good and 90% saying they’re bad.

About a quarter of Americans now say things in the country are headed in the right direction, 27%, up from 17% in July. Seventy-two percent say things are going in the wrong direction.

Close to half of Democrats — 44% — have an optimistic outlook, up from 27% in July. Just 9% of Republicans are optimistic about the nation’s direction.

Akila Atkins, a 27-year-old stay-at-home mom of two, thinks Biden is “OK” and doesn’t have much confidence that his solutions will curb rising prices.

Atkins says it’s gotten a little harder in the last year to manage her family’s expenses, and she’s frustrated that she can no longer rely on the expanded child tax credit. The tax credit paid out monthly was part of Biden’s $1.9 trillion coronavirus relief package and has since lapsed.

The Census Bureau reported Tuesday that the expanded tax credit nearly halved the child poverty rate last year to 5.2%. Atkins said it helped them “stay afloat with bills, the kids’ clothing, shoes, school supplies, everything.”

Whatever misgivings the Democrat in Grand Forks, North Dakota, has about Biden, she believes he is preferable to Trump.

“I always feel like he could be better, but then again, he’s better than our last president,” she said.

___

The poll of 1,054 adults was conducted Sep. 9-12 using a sample drawn from NORC’s probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for all respondents is plus or minus 3.9 percentage points.

___

Follow the AP’s coverage of President Joe Biden at https://apnews.com/hub/joe-biden.

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By Trevor Hunnicutt

WASHINGTON (Reuters) – Major U.S. railroads and unions secured a tentative deal after 20 hours of intense talks brokered by the Biden administration to avert a rail shutdown that could have hit food and fuel supplies nationwide.

U.S. President Joe Biden announced the deal in a statement early Thursday morning, calling it “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.”

The tentative deal now goes to the unions to be voted on, according to a person familiar with the negotiations.

Even if those votes fail, a rail shutdown that could have happened as soon as midnight Friday has been averted for several weeks due to the standard language included in such a deal, this person said.

A rail shutdown could freeze almost 30% of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy as much as $2 billion per day and unleash a cascade of transport woes affecting the U.S. energy, agriculture, manufacturing, healthcare and retail sectors.

Biden administration officials hosted labor contract talks into the night on Wednesday aiming to secure an agreement between unions which represent 115,000 workers and railroads including Union Pacific, BNSF, CSX, Norfolk Southern and Kansas City Southern.

Shares of U.S. railroad operators rose between 2.4% and 2.9% in pre-market trade.

Negotiations between the companies and a dozen unions had stretched for more than two years, leading Biden to appoint an emergency board to help break the impasse.

Biden himself called U.S. Labor Secretary Marty Walsh and negotiators around 9 p.m. on Wednesday to advance talks, according to a person aware of the negotiations, which lasted 20 hours.

Failing to reach a deal before the deadline of one minute after midnight on Friday would have cleared the way for workers to legally strike.

The railroad companies involved have cut jobs and trimmed pay and other costs in recent years as they increased profits, stock buybacks and dividends for investors. Profits at billionaire Warren Buffett’s Berkshire Hathaway, which owns BNSF, rose 9.2% in the most recent quarter to $1.7 billion.

The number of U.S. railway workers has dropped from over 600,000 in 1970 to about 150,000 in 2022, according to the Bureau of Labor Statistics, due both to technology and cost-cutting.

Biden, who has called himself the most union-friendly president in history and pilloried companies for raking in “excessive” profits, praised a deal that he said would give workers “better pay, improved working conditions, and peace of mind around their health care costs.”

Administration officials have been eager to resolve the dispute that threatened fresh goods shortages and added consumer price inflation ahead of November’s midterm elections for control of Congress.

Senior congressional leaders had threatened to pass legislation imposing a resolution on the railroads and unions if the negotiations were not successful.

U.S. House Speaker Nancy Pelosi praised the tentative agreement and said that Congress was “ready to act” but that “thankfully this action may not be necessary.”

(Reporting by Trevor Hunnicutt in Washington; Additional reporting by Susan Heavey in Washington, Jahnavi Nidumolu, Aishwarya Nair and Kannaki Deka in Bengaluru; Editing by Jason Neely, Devika Syamnath, Shounak Dasgupta, Heather Timmons and Catherine Evans)

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WASHINGTON (Reuters) – U.S. railway parties have agreed to a cooling off period as standard part of the ratification process after reaching a tentative deal overnight, a move that would avert any shutdown in case unions fail to ratify it, a source familiar with the situation said on Thursday.

U.S. President Joe Biden called negotiators around 9 p.m. Wednesday night as talks continued in a move the source said was “crucial” as talks progressed for 20 hours into the night.

(Reporting by Trevor Hunnicutt; writing by Susan Heavey; Editing by Toby Chopra)

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By Ted Hesson, Dave Graham and Humeyra Pamuk

WASHINGTON/MEXICO CITY (Reuters) – As border crossings have soared to record highs, U.S. President Joe Biden’s administration is quietly pressing Mexico to accept more migrants from Cuba, Nicaragua and Venezuela under a COVID-19 expulsion order that the White House has publicly sought to end, seven U.S. and three Mexican officials said.

U.S. Secretary of State Antony Blinken raised concerns about an escalating number of crossings by migrants from the three countries during a visit on Monday to Mexico City, two U.S. and two Mexican officials told Reuters, but Mexico did not promise any specific actions.

One U.S. official said trying to convince Mexico to agree is “an uphill battle.”

All sources requested anonymity to discuss internal government matters.

Mexico already accepts U.S. returns of migrants from Guatemala, Honduras and El Salvador. So far, this fiscal year about 299,000 people from those nations have been expelled at the border, compared to about 9,000 returns from Cuba, Nicaragua and Venezuela.

The U.S. effort to pressure Mexico on these three particular nationalities illustrates the depth of concern within the Biden’s Democratic administration about their border crossings. Most migrants from Cuba, Nicaragua and Venezuela who cross into the United States are allowed to stay to pursue asylum claims, since they are difficult to deport due to frosty diplomatic relations with their governments.

Mexico’s foreign ministry declined to comment and the U.S. Department of Homeland Security, the State Department and the White House did not respond to requests for comment.

U.S. border agents have made a record 1.8 million migrant arrests so far in fiscal year 2022, with many attempting to cross multiple times, creating humanitarian challenges and political liabilities for Biden ahead of the Nov. 8 midterm election.

Of those arrests at the southwest border, nearly a quarter of the migrants were from Cuba, Nicaragua and Venezuela, up from 8% in 2021 and 3% in 2020. Most were let into the United States to pursue immigration cases.

The Biden administration has publicly sought to end the COVID health order, known as Title 42. Issued in early 2020 under former Republican President Donald Trump, it allows U.S. border authorities to rapidly expel migrants to Mexico or other countries without the chance to seek U.S. asylum. A federal Trump-appointed judge in Louisiana blocked the administration from ending the order earlier this year, even as U.S. health officials said it was no longer needed to protect against COVID spread.

But behind closed doors, some Biden officials still view expanding expulsions as a way to deter crossers, one of the U.S. officials said, even if it contradicts the Democratic Party’s more welcoming message toward migrants.

Advocates and many Democrats fiercely oppose Title 42, saying it has exposed migrants to dangerous conditions in Mexico, including kidnapping and extortion.

“I think this really betrays their commitments to refugee protection,” said Robyn Barnard, associate director for refugee advocacy with the New York City-based non-profit organization Human Rights First.

MEXICO HESITANT

Two Mexican officials told Reuters that Mexico does not want to take Cubans, Nicaraguans and Venezuelans expelled from the United States because those countries resist accepting deportation flights from Mexico as well.

Instead, Mexico aims to step up internal flights of migrants from its northern border to its southern border to relieve pressure on the shared frontier, one of the officials said.

Mexico would like Washington to relax economic sanctions against Venezuela to help curb the exodus from the country and make it easier for migrants to work in the United States legally, two Mexican officials said.

Meanwhile, U.S. border officials in El Paso, Texas, say they have been forced to release hundreds of migrants on city streets near shelters and bus stations to ease overcrowding at their facilities.

Many of the Venezuelans arriving have no family members or sponsors, further straining charity and government agencies that assist them, said Mario D’Agostino, El Paso’s deputy city manager.

The Democrat-controlled city has contracted charter buses to carry migrants north to New York City, an effort that comes after the Republican governors of Texas and Arizona drew national attention by busing thousands of migrants to Democrat-led northern cities.

PRESSURING OTHER NATIONS

Biden officials are also exploring ways to push responsibility to other nations beyond Mexico, sources said.

For example, the White House wants Panama to accept deported Venezuelans if they passed through the Central American nation en route to the United States, two of the U.S. officials said.

Nearly 70,000 Venezuelans entered Panama from its Colombian border this year through August, compared with 1,150 in the same period last year, according to official data.

Panamanian government officials did not respond to a request for comment.

Separately, the Biden administration had been sending a small number of Venezuelans to the Dominican Republic on commercial flights, two of the U.S. officials said, a continuation of a Trump-era practice.

But the program was halted after pushback earlier this year from the office of Senator Robert Menendez, a Democrat from New Jersey, according to one of the U.S. officials and a person familiar with the matter. In February, Menendez called deporting migrants fleeing Venezuela’s “cruel regime” to third countries “extremely disturbing.”

(Reporting by Ted Hesson, Matt Spetalnick and Humeyra Pamuk in Washington and Dave Graham and Daina Solomon in Mexico City; Additional reporting by Jose Luis Gonzalez in Ciudad Juarez and Elida Moreno in Panama City; Editing by Mica Rosenberg and Aurora Ellis)

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By Patricia Zengerle and Michael Martina

WASHINGTON (Reuters) -A U.S. Senate committee on Wednesday approved legislation that would significantly enhance U.S. military support for Taiwan, including provisions for billions of dollars in additional security assistance, amid increased pressure from China toward the democratically governed island.

The Senate Foreign Relations Committee backed the Taiwan Policy Act of 2022 by 17-5. The strong bipartisan vote was a clear indication of support from both Republicans and President Joe Biden’s fellow Democrats for changes in U.S. policy toward Taiwan, such as treating Taiwan as a major non-NATO ally.

The act also includes extensive language on sanctions toward China in the event of hostilities across the strait separating it from the mainland.

“We need to be clear-eyed about what we are facing,” said Senator Bob Menendez, the committee’s Democratic chairman, while stressing that the United States does not seek war or any increase in tensions with Beijing.

The committee’s approval paved the way for a vote in the full Senate, but there has been no word on when that might take place. To become law, it must also pass the House of Representatives and be signed by President Joe Biden, whose administration has expressed concerns about portions of the legislation.

The White House said on Tuesday it was in talks with members of Congress on how to change the bill to ensure that it does not change long-standing U.S. policy toward Taiwan that it considers effective.

The Taiwan bill is likely to be folded into a larger piece of legislation expected to pass late this year, such as the National Defense Authorization Act (NDAA), an annual bill setting policy for the Department of Defense.

(Reporting by Patricia Zengerle and Michael Martina; editing by Jonathan Oatis)

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By David Shepardson and Lisa Baertlein

DETROIT/LOS ANGELES (Reuters) -Biden administration officials, keen to avert a potential rail shutdown that could disrupt cargo shipments and impede food and fuel supplies, hosted labor contract talks on Wednesday as one of the smaller unions involved in the dispute rejected a deal and Amtrak canceled long-distance passenger trips.

Railroads including Union Pacific, Berkshire Hathaway’s BNSF and Norfolk Southern have until a minute after midnight on Friday to reach deals with three holdout unions representing about 60,000 workers before a work stoppage affecting freight and Amtrak could begin.

A union representing about 4,900 machinists, mechanics and maintenance personnel said on Wednesday its members voted to reject its tentative deal, as other unions could choose to do.

Railroads have offered significant pay increases. Three of 12 unions, representing about half of the 115,000 workers affected by the negotiations, are holding out for better working conditions. Two of those 12 unions, representing more than 11,000 workers, have ratified deals, the National Carriers’ Conference Committee (NCCC), which is bargaining on behalf of railroads, said on Wednesday.

Unions are enjoying a surge of public and worker support in the wake of the pandemic – when “essential” employees risked COVID-19 exposure to keep goods moving and employers reaped hefty profits, labor and corporate experts say.

A shutdown could freeze almost 30% of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy as much as $2 billion per day and unleash a cascade of transportation woes affecting the U.S. energy, agriculture, manufacturing and retail sectors.

White House spokeswoman Karine Jean-Pierre told reporters aboard Air Force One that a shutdown of the freight rail system would be an “unacceptable outcome for our economy and the American people and all parties must work to avoid just that.”

The Labor Department in a statement said “the parties are negotiating in good faith and have committed to staying at the table” on Wednesday in a meeting hosted by Labor Secretary Marty Walsh.

President Joe Biden’s administration has begun making contingency plans to ensure deliveries of critical goods in the event of a shutdown. The stakes are high for Biden, who has vowed to rein in soaring consumer costs ahead of November elections that will determine whether his fellow Democrats maintain control of Congress.

“Unless they reach a breakthrough soon, rail workers will go on strike this Friday. If you don’t think that will have a negative impact on our economy … think again,” U.S. Senator John Cornyn, a Republican and Biden critic, said.

If agreements are not reached, employers could also lock out workers. Railroads and unions may agree to stay at the bargaining table, or the Democratic-led U.S. Congress could intervene by extending talks or establishing settlement terms.

House of Representatives Speaker Nancy Pelosi said it was not clear whether Congress would step in, noting that the main issue is a lack of sick leave for workers.

“We’d rather see negotiations prevail so there’s no need for any actions from Congress,” Pelosi added.

Amtrak, which uses tracks maintained by freight railways, said it would cancel all long-distance trips on Thursday.

Industry groups are calling on Congress to help, saying a rail shutdown would hit as grain farmers prepare for harvest and consumers gear up for winter weather and Christmas holiday shopping.

Railroad customers have long complained that rail service is expensive and unreliable, with the industry’s decision to halt shipments of hazardous materials, refrigerated food and general merchandise ahead of a potential shutdown making matters worse.

Rail hubs in Chicago and Dallas were already clogged and suffering from equipment shortages before the contract showdown. Those bottlenecks are backing up cargo at U.S. seaports by as much as a month. And, once cargo gets to rail hubs in locations such as Chicago, Dallas, Kansas City and Memphis, Tennessee, it can sit another month or longer.

Package delivery giant United Parcel Service, one of the largest U.S. rail customers, and U.S. seaports said they are working on contingency plans. Automakers worry that a shutdown could extend vehicle buyer wait times, and food and energy companies are warning that additional service disruptions could create even sharper price hikes.

(Reporting by David Shepardson and Lisa Baertlein; Additional reporting by Jeff Mason aboard Air Force One; Joe White in Detroit; Chris Walljasper in Chicago and Abhijith Ganapavaram in Bengaluru; Editing by Will Dunham, Mark Porter and Jonathan Oatis)

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DETROIT/LOS ANGELES (Reuters) – Biden administration officials, racing to avert a potential rail shutdown that could disrupt cargo shipments and impede food and fuel supplies, hosted labor contract talks on Wednesday as one of the smaller unions involved in the dispute rejected a deal.

Railroads including Union Pacific, Berkshire Hathaway’s BNSF and Norfolk Southern have until a minute after midnight on Friday to reach tentative deals with three holdout unions representing about 60,000 workers before a work stoppage affecting freight and Amtrak passenger rail service could begin.

A union representing about 4,900 machinists, mechanics and maintenance personnel said on Wednesday its members voted to reject a tentative deal.

Railroads have offered significant pay increases. Three of 12 unions, representing about half of the 115,000 workers affected by the negotiations, are holding out for better working conditions.

Unions are enjoying a surge of public support and worker interest in the wake of the pandemic – when employees risked COVID-19 exposure to keep goods moving and employers reaped hefty profits, labor and corporate experts say.

A shutdown could freeze almost 30% of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy as much as $2 billion per day and unleash a cascade of transportation woes affecting the U.S. energy, agriculture, manufacturing and retail sectors.

White House spokeswoman Karine Jean-Pierre told reporters aboard Air Force One that a shutdown of the freight rail system would be an “unacceptable outcome for our economy and the American people and all parties must work to avoid just that.”

The Labor Department in a statement said “the parties are negotiating in good faith and have committed to staying at the table” on Wednesday in a meeting hosted by Labor Secretary Marty Walsh.

President Joe Biden’s administration has begun making contingency plans to ensure deliveries of critical goods in the event of a shutdown. The stakes are high for Biden, who has vowed to rein in soaring consumer costs ahead of November elections that will determine whether his fellow Democrats maintain control of Congress.

If agreements are not reached, there could be union strikes or employer lockouts. But the railroads and unions also could agree to stay at the bargaining table, or the Democratic-led U.S. Congress could intervene by extending talks or establishing settlement terms.

House of Representatives Speaker Nancy Pelosi said it was not clear whether Congress would step in, noting that the main issue “is that there’s no sick leave for the workers and that’s a problem.”

“We’d rather see negotiations prevail so there’s no need for any actions from Congress,” Pelosi added.

Amtrak, which uses tracks maintained by freight railways, began cutting long-distance trains on Tuesday. Some commuter rail systems like Chicago’s Metra said they will begin halting some service on Thursday.

Industry groups are calling on Congress to help, saying a rail shutdown would hit as grain farmers prepare for harvest and consumers gear up for winter weather and Christmas holiday shopping.

Railroad customers have long complained that rail service is expensive and unreliable, with the industry’s decision to halt shipments of hazardous materials, refrigerated food and general merchandise ahead of a potential shutdown making matters worse.

Rail hubs in Chicago and Dallas were already clogged and suffering from equipment shortages before the contract showdown. Those bottlenecks are backing up cargo at U.S. seaports by as much as a month. And, once cargo gets to rail hubs in locations such as Chicago, Dallas, Kansas City and Memphis, Tennessee, it can sit another month or longer.

Package delivery giant United Parcel Service, one of the largest U.S. rail customers, said it is working on contingency plans. Automakers worry that a shutdown could extend vehicle buyer wait times, and food and energy companies are warning that additional service disruptions could create even sharper price hikes.

(Reporting by David Shepardson and Lisa Baertlein; Additional reporting by Jeff Mason aboard Air Force One; Joe White in Detroit; Chris Walljasper in Chicago and Abhijith Ganapavaram in Bengaluru; Editing by Will Dunham, Mark Porter and Jonathan Oatis)

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