Looming railroad strike could cripple US economy, transportation

A looming railroad strike could paralyze the nation's supply chain and passenger rail service ahead of the holidays.

"Let me be clear: a rail shutdown would devastate our economy," President Joe Biden said on Monday. "Without freight rail, many U.S. industries would shut down."

Congress has taken up a measure that imposes the terms of a tentative agreement reached in September. The agreement was rejected by several unions.

Unions have accused rail companies of penalizing workers for taking time off for medical reasons, since employees do not receive paid sick days. To win a favorable deal, rail companies are jeopardizing the nation's economy, unions said.

The National Carriers' Conference Committee (NCCC), which represents the nation's freight railroads in national collective bargaining, said rail employees are provided "significant" time off and that the companies have offered a fair contract that includes a considerable wage increase.

A potential strike could lead to $2 billion a day in lost economic output, according to the Association of American Railroads, which lobbies on behalf of rail companies. Freight railroads are responsible for carrying 40% of the nation's long-haul freight and a work stoppage could jeopardize these shipments.

"The artery of the U.S. economy is the rail system. It's one of the ways we get everything around. One third of everything gets around this way. And when you cut it, you have a stroke," Diane Swonk, chief economist at global tax firm KPMG, said in an interview with ABC News.

The potential impact for Americans

Should a strike happen, Americans will feel the effects in their wallets, Swonk said.

"It means everything from the potential for layoffs at the same time that prices are going to continue to rise. You're going to see more empty shelves in your store," Swonk said. "We already have an economy that's slowing and inflation that's persistently high -- that's a bad situation to be in."

Rail is critical to the entire goods side of the economy, including manufacturing, warehousing, retail and agriculture. If a rail strike lasts more than three to four weeks, the prices of goods would likely jump again, further exacerbating inflation, according to economist Mark Zandi.

Days before the two sides narrowly averted a strike in September, urgent calls for a resolution came from trade groups representing manufacturers, retailers, oil companies and even beer sellers.

While Amtrak and its workforce are not involved in the negotiations, it has already begun "phased adjustments" to its service in preparation for a possible freight rail service interruption.

The company said such an interruption "could significantly impact intercity passenger rail service."

Congress set to intervene with aim of averting a strike

On Monday, Biden asked Congress to intervene and avert a potential strike by forcing the workers' unions to accept a White House-brokered deal as a Dec. 9 deadline approaches.

"I am reluctant to override the ratification procedures and the views of those who voted against the agreement. But in this case -- where the economic impact of a shutdown would hurt millions of other working people and families -- I believe Congress must use its powers to adopt this deal," he said.

Outgoing House Speaker Nancy Pelosi said in a statement that the House would take up such legislation and would not modify the agreed-upon terms.

Republican Congressional leaders Rep. Kevin McCarthy, R-Calif., and Sen. Mitch McConnell, R-Ky., said they think a measure imposing the tentative agreement would pass.

The fate of a potential deal between rail workers and companies remains uncertain, especially if Congress fails to impose the tentative agreement. Four of 12 unions have already voted down the agreement and those four unions represent the majority of unionized rail workers.

A nationwide strike is expected unless the contract is ratified by each of the 12 rail unions, since all of the unions have vowed not to cross the picket line in the event of a work stoppage.

ABC News' Molly Nagle, Zunaira Zaki and Trish Turner contributed to this report.