By Laura Litvan and Erik Wasson

Senate leaders struck a deal to expedite a vote on legislation to avert a nationwide freight-rail strike that would hobble an already fragile U.S. economy.

The chamber will vote Thursday on a House-passed bill that would impose an agreement hammered out by rail companies, union leaders and the Biden administration months ago but rejected by workers in four of 12 unions.

“I am very glad that the two sides got together to avoid a shutdown which would’ve been devastating for the American people, for the American economy and so many workers across the country,” Senate Majority Leader Chuck Schumer said.

The House on Wednesday cleared the bill on a bipartisan 290-139 vote as well as a related piece of legislation that would revise the original deal to add seven days of paid sick leave to the contract, one of the sticking points between unions and companies. 

Under the agreement to expedite the vote, the Senate will also consider amendments to add seven days of sick leave to the deal and to impose a new 60-day cooling off period rather than a new labor contract. 

It’s unclear whether the added leave measure will have the votes to pass, but the extension is likely to fail. President Joe Biden, who personally got involved to clinch the tentative deal back in September, indicated today that paid sick leave would have to wait.

“We’re going to avoid the rail strike, keep the rails running, keep things moving, and I’m going to go back and we’re going to get paid leave,” Biden said Thursday at a news conference with French President Emmanuel Macron. 

The agreement reached today allows the Senate to bypass usual procedures that would have required days to clear the legislation. Faced with a Dec. 9 deadline when a strike could begin, prodded the Senate to act swiftly.

Paid sick leave

The sick leave issue has been taken up by an unlikely coalition of progressive and conservatives.

House Speaker Nancy Pelosi added the separate bill after progressive House Democrats threatened to tie up the legislation. In the Senate, Bernie Sanders, a Vermont independent, led the push for a vote amending the Senate bill with a sick leave provision. some conservative Republicans also have taken note of labor complaints about leave.

“I don’t believe Congress should step in and reflexively side with management in this dispute,” said Senator Ted Cruz, a Texas Republican. “I think the concerns being raised by the union members and the membership that voted on these arrangements, I think those concerns are quite reasonable.”

Senator John Thune of South Dakota, the No. 2 GOP leader, told a panel of Bloomberg editors and reporters in Washington Tuesday that while many Republicans would prefer not to have Congress intervene, a “significant” number would likely vote for the House bill. He said he thought the paid sick provision would not get 60 votes, however.

Congress can pass legislation to keep the railroads operating under the Railway Labor Act.

A rail shutdown would escalate inflation, cost 700,000 jobs across multiple industries and chop $160 billion from the economy, possibly tipping the economy into recession, according to a study by the American Chemistry Council. 

U.S. chemical manufacturers alone ship 33,000 rail carloads per week worth $2.8 billion. Rail operators were set to begin slowing down operations as soon as this week in preparation for a strike, in part to make sure cargo isn’t left stranded.

© 2022 Bloomberg L.P.