In Washington – Insider – November 23, 2022

Two More Unions Reject Rail Deal, Strike Possible Dec. 5  The threat of a rail strike increased substantially this week …

Two More Unions Reject Rail Deal, Strike Possible Dec. 5 

The threat of a rail strike increased substantially this week as one of the largest unions, SMART-TD narrowly rejected on November 21 the compromise agreement reached in September with assistance of the Biden Administration.  Paid sick leave, which is not guaranteed in the compromise agreement, has emerged as the sticking point with union rank and file members.  

SMART-TD is split into two groups, both of which needed to approve the deal. 1,300 yardmasters approved the agreement, while its 28,000 conductor, brakemen, engine service, and yardmen groups failed to ratify the agreement by a margin of less than 1 percent. SMART-TD is the largest union involved in the negotiation, with approximately 31,000 members.  BLET, which represents 20,000 engineers and trainmen, ratified the compromise agreement on November 21.  These votes follow the International Brotherhood of Boilermakers vote rejecting the compromise agreement last week. 

The American Association of Railroads warned that Congress needed to be prepared to act to prevent a strike. “Today, the BLET joined the majority of our unions in approving the largest wage increases in nearly five decades and also paved a path toward greater scheduling predictability for its members,” said AAR President and CEO Ian Jefferies. “Railroads stand ready to reach new deals based upon the PEB framework with our remaining unions, but the window continues to narrow as deadlines rapidly approach. Let’s be clear, if the remaining unions do not accept an agreement, Congress should be prepared to act and avoid a disastrous $2 billion a day hit to our economy.”  

At this point, 8 unions have agreed to the compromise agreement reached with federal mediators in September, with 4 voting no.  However, if any union moves to strike, no unions will cross a picket line.  The earliest any union could strike is December 5, with other unions able to strike beginning on December 9, based on rules agreed upon when accepting federal mediation. AAR recently released an economic impact study that found a rail strike would create $2 billion a day in economic damage.  

Pressure is growing on Congress to take action to prevent a rail strike immediately prior to the holiday season.  This could include legislation extending the cooling off period to legislation requiring both sides to accept the compromise agreement reached in September.  

The most recent status of rail negotiations can be found here 

Forced Labor Law Webinar Next Week 

ACMA will host a members-only webinar next week with experts from the law firm of Arnold & Porter to discuss the Uyghur Forced Labor Prevention Act (“UFLPA”), a law that creates a “rebuttable presumption” that products made in, or with inputs from, the Xinjiang region of China benefit from forced labor. As China continues to move members of the Uyghur ethnic minority to other areas of the country, this law has growing implications for all companies with supply chains that involve Asia.  

Come learn what you need to know on Wednesday, November 30, 2021. Register now.

Pelosi Steps Down as Leader, GOP Infighting After Election 

The 2022 midterm elections defied expectations of a significant Republican victory but are still creating significant change in Washington.  After several weeks of silence, House Speaker Nancy Pelosi announced she will not seek another term as Democratic leader in the House.  In an address to the full House of Representatives that effectively functioned as a retirement speech for her time as Speaker, she reflected on her political career and highlighted legislation completed with three presidents, notably leaving former President Trump off the list. Her full speech can be found here. House Democrats vote on their leadership slate November 30. 

Republicans also engaged in post-election drama, as Senate Majority Leader Mitch McConnell (R-KY) faced a challenge from Senator Rick Scott (R-FL) for the role of Minority Leader. While McConnell easily won, 10 Republican Senators voted for Scott in the secret ballot process.  While a number of Senators would not confirm how they voted, Senators Mike Braun (R-IN), Ted Cruz (R-TX), Lindsey Graham (R-SC), Josh Howley (R-MO), Ron Johnson (R-WI) confirmed they were among those supporting Scott. Senators Marco Rubio (R-FL), Rand Paul (R-KY), and Markwayne Mullin (R-OK) would not say how they voted. 

Separately, House Republicans remain divided over House Minority Leader Kevin McCarthy (R-CA) becoming Speaker of the House.  The House Freedom Caucus, comprised of some of the most conservative members of the House, opposed Representative McCarthy’s bid, with former chair Representative Andy Biggs (R-AZ) running for the position as well. Given the narrow Republican majority, McCarthy will need to address this opposition in order to hit the 218 votes needed to become speaker. 

ACMA staff walked members through these issues in a webinar on November 16, which can be viewed here. 

Build America Buy America Waiver Ends 

The Department of Transportation announced that the temporary waiver of domestic content would not be extended beyond November 10, 2022, but is considering waivers for de minimis costs, small grants, and minor components.  The DOT notice can be found here.   

Stringent domestic content requirements for composite materials in federally funded infrastructure projects will still be covered by yet-to-be finalized guidance from the Biden Administration implementing the Build America, Buy America Act.  At present, the Office of Management and Budget simply states that construction materials, which includes composites, must “include at least the final manufacturing process and the immediately preceding manufacturing stage” in the United States.