Manufactured crisis threatens mail delivery and worker benefits

Back in August, just a few days before contract negotiations between the US Postal Service (USPS) and two of its unions were to commence, USPS issued a statement saying that within a month, the postal service would be insolvent due to the decline in first-class mail deliveries. The statement urged Congress to give USPS the authority to reduce health care and pension benefits and reduce its workforce without bargaining with its unions.

Not long after USPS issued its dire warning, a US House subcommittee voted in favor of HR 2309 by Rep. Darrell Issa (R-CA) and Dennis Ross (R-FL), which would if enacted create a control board with authority to override postal service collective bargaining agreements and impose layoffs, benefit cuts, and changes to seniority rules.

Along with proposed cuts to worker benefits, other proposals are being made to sharply curtail delivery to individuals and businesses including closing 3,700 post offices, laying off 120,000 postal workers, closing 300 processing centers, and ending Saturday mail delivery

Supporters of HR 2309 and the proposals to cut delivery service say that these measures are needed to avert  USPS’s insolvency crisis, which otherwise will require a taxpayer bailout. But postal worker unions say that the insolvency crisis is a manufactured crisis whose purpose is to provide political cover for cutting services and voiding collective bargaining provisions that protect benefits and jobs.

“These new legislative proposals constitute a transparent attempt to gut our benefits and reduce our bargaining rights without negotiations,” said President Fredric Rolando, president of the National Association of Letter Carriers. Rolando urged USPS to engage in constructive collective bargaining “that helps the USPS better serve the American people and the $1.2 trillion industry it supports.”

Postal workers unions on September 27 held a Day of Action to urge members of Congress to support proposed legislation that will save America’s postal service without the radical cuts proposed in HR 2309 and by USPS management.

The manufactured insolvency crisis is the result of the Postal Accountability Enhancement Act (PAEA) passed in 2006, which requires that USPS pre-fund 75 years of retiree health benefits within a ten-year period beginning in 2007. PAEA’s mandate makes USPS unique. No other business or government pre-funds retiree health care over this length of time. In fact, most businesses and governments fund this benefit on a pay-as-you-go basis.

As a result of the pre-funding mandate, USPS lost $20 billion between 2007 and 2010. Before the mandate, USPS was debt free; now it is $13 billion in debt all of which was taken on to meet the pre-funding mandate. Without the pre-funding payments, USPS operations would have made profits of nearly $700 million over the last four years.

USPS said that it wasn’t going to be able to make the next pre-funding payment because it has nearly maxed out its $15 billion debt ceiling and won’t be able to borrow any more money, which according to Postmaster General Patrick Donahoe, Congressman Issa, and Congressman Ross makes USPS insolvent and necessitates cuts to service and worker benefits.

During its Day of Action members of postal workers unions, including NALC, American Postal Workers Union, National Postal Handlers Union, National Rural Letter Carriers Association, and National Association of Postal Supervisors, rallied and visited local congressional offices throughout the US urging representatives to co-sponsor HR 1351 by Rep. Stephen Lynch (D-MA).

HR 1351 is a short-term solution to the manufactured crisis. It would require the US Office of Personnel Management to refund $6 billion in over payments that USPS has made to the Federal Employee Retirement System, an overpayment that all interested parties agree was made. That would be enough money for USPS to make this year’s pre-funding payment.

But to maintain a quality postal delivery system, unions say that PAEA needs to be repealed and Congress needs to take further action to free up USPS earned revenues that are sitting in surplus funds, actions that would cost taxpayers nothing.

Unions are also battling myths that make the decline of postal delivery seem inevitable–for example, one such myth holds that the internet renders the postal service obsolete. The internet, according to the unions, has changed mail delivery but not supplanted it. For example, while more people are paying  bills online, more are also relying on USPS to deliver goods purchased over the internet.

“In a time of rapid societal and technological change, we need to strengthen our universal communications and delivery network, not weaken it,” read a statement released by postal worker unions.  “It would be a national travesty to begin to dismantle this unique network, jettison its numerous capabilities and jeopardize all its contributions, when the financial challenges—properly understood—can be addressed in ways that are more effective and cause no damage.”

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One thought on “Manufactured crisis threatens mail delivery and worker benefits

  1. Bullcrap.

    The postal service came up $8.5 billion short last year, and the pre-funding payment was about $5.5 billion. So the post office was still $3 billion in the red even if without having to pay for employee retirement benefits.

    And yes, the Postal Service SHOULD have to pay these retirement benefits. Otherwise it will fall on the taxpayers.

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