On The Money — Railway strikes threaten the economy in the medium term

Freight train passing a railroad crossing
Workers watch as a freight train crosses a railroad crossing on June 28, 2022, near Mendon, Missouri.

The federal government has only been given about two weeks to avert a nationwide freight train strike that will severely affect the country. We also look at the looming federal funding deadline and the side deals that hang on the countdown to closure.

But first, a quick note on the California heat wave.

Welcome to On the Money, your bills, bank accounts and all the information that affects your earnings every night. The Hill are Sylvain Lane, Alice Foley and Karl Evers Hillstrom.

Potential rail strike threatens US economy

A potential nationwide freight rail strike is looming, threatening to paralyze the US economy ahead of the holiday shopping season and November’s midterm elections.

About 115,000 railroad workers could be out of work by Sept. 16 if no new contracts can be agreed with the railroads.

This comes after a White House-appointed committee released recommendations for collective bargaining aimed at ending years of contentious negotiations, as workers legally went on strike. It’s the first day you can do it.

  • Five unions have reached tentative agreement to implement the President’s Emergency Committee (PEB) recommendation calling for a 24% wage increase, but most unions have yet to reach agreement.
  • It’s also unclear whether workers will vote to ratify contracts that don’t address concerns about working-hour penalties or strict schedules.
  • A recent survey found that more than nine out of ten railroad workers would vote to strike against the PEB’s recommendations.

The American Railroad Association estimates that nationwide railroad closures will cost the United States at least $2 billion a day. Experts say it will devastate the country’s agriculture and energy industries and severely clog supply chains.

Congress will likely intervene: If workers go on strike, federal law gives Congress the power to prevent or delay the strike, depriving railroad workers of their sole source of influence. But it’s not entirely clear how MPs will approach the issue, and they haven’t in his 30 years.

Karl has the details here.

side quest

Schumer vows to pass Manchin Accords despite Democratic opposition

Senate Majority Leader Charles Schumer (DN.Y.) said Wednesday that despite mounting opposition from progressive House Democrats, Senator Joe Manchin (DW.V. .

  • Schumer said the makeshift spending measures Congress needs to pass to keep the federal government funded beyond Sept. 30 include reform bills to accelerate the development of fossil fuels and other energy projects. said allow.
  • “Our intention is to add it to the CR,” Schumer told reporters Wednesday, referring to a short-term, ongoing resolution to fund the government.

The decision will make it harder for progressives in the House, who feel little obligation to help Manchin pass one of his top energy development priorities, to stop it.

The Hill’s Alexander Bolton explains why.

another CR?

Congress faces a funding deadline

Congress is watching a critically important time to finalize funding bills to prevent government shutdowns before the end of September.

MPs are already armed with a list of political landmines that must be dealt with sensitively, from proposals for energy permits to funding Ukraine and the coronavirus.

  • One of the issues that could stand in the way of the government’s funding bill has to do with the expedited Federal Energy Permit Agreement with Manchin.
  • A potential stalemate could come in the form of Democratic leaders in the House facing pressure from liberals demanding that the permit deal be removed from the CR.
  • Nor is there any guarantee that enough Republicans in the Senate will support its introduction.

Aris has more.

green screen

Fed Vice Chairman says banks will begin pilot climate risk analysis next year

Banks will test next year a method to help financial institutions understand the risks they face from climate change and climate-related events, the top regulator of the U.S. Federal Reserve said Wednesday. .

Federal Reserve Vice Chairman Michael Barr said in a speech Wednesday that a pilot of major bank-supervised banks will be conducted next year to better understand the risks climate change poses to the financial system. He said he would start training.

  • In this exercise, companies may need to explain how various climate-related financial shocks will affect their books and ability to serve their customers.
  • As vice chairman of oversight, Barr spearheads oversight of major financial institutions, including the Federal Reserve’s annual stress test of the nation’s largest banks.

“The Federal Reserve’s authority in this area is important but limited, focused on our oversight responsibilities and our role in promoting a safe and stable financial system,” Barr said. said.

Sylvan has more.

Useful information

Treasury Secretary Janet Yellen will rouse the fossil fuel industry in a speech on the Biden administration’s economic policies in Detroit, Michigan, on Thursday.

Other things to watch out for are:

  • According to a new Gallup poll, a majority of Americans say inflation-driven price increases are causing moderate or severe economic hardship.
  • Senator Amy Klobuchar (D-Minnesota) says the move to pass antitrust legislation targeting the biggest tech companies has stalled, even though the bill is still awaiting a vote on the floor. Said it wasn’t over.

That’s all for today. Thank you for reading. For the latest news and coverage, visit The Hill’s Finance page. See you tomorrow.

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