Postal Service cuts on hold for now

The US Postal Service on December 13 announced that it will delay for five months the implementation of its plan to close postal facilities, eliminate 100,000 jobs, and increase mail delivery time.  The moratorium was requested by senators who want time to develop legislation that will address the problems that led to the Postal Service’s planned cuts.

Postal workers, local postmasters, and customers voiced strong opposition to the proposed cuts that would eliminate more than half of the postal services processing facilities and 4,500 mostly rural post offices. Postal unions gathered nearly one million signatures on a petition to Congress urging it to take action to save postal services.

“This is a victory for the American people and postal workers,” said Cliff Guffey, president of the American Postal Workers Union. “It is a direct result of the protests by postal employees, small business owners, and community leaders.”

But Guffey warned that the moratorium, which expires on May 15, is only a temporary reprieve. “Postal executives have made clear that they intend to proceed with studies and plans to close thousands of post offices and more than half of the nation’s mail processing centers.”

Responding to the organized effort to save postal services, Senator Bernie Sanders, an independent from Vermont, drafted a letter to the Senate leadership calling for Congress to impose a moratorium on the closings. The letter, signed by 22 senators, was sent on December 9. The following Monday, US Postmaster General Patrick Donahoe met with 15 senators, including Sanders, to hear their concerns about Postal Service cuts. After the meeting, the Postal Service announced the moratorium.

The planned cuts were management’s way of dealing with the Postal Service’s financial shortfall. The shortfall is partially due to a decline in the amount of first-class mail, but just as important is an unusual 2006 congressional mandate requiring the Postal Service to within 10 years pre-fund retiree health care for the next 75 years.

The mandate forced the Postal Service to set aside about $5 billion a year to pre-fund retiree health care. According to consumer advocate Ralph Nader, setting aside the pre-payment aused the Postal Service’s shortfall, which over the last four years has totaled $19.5 billion. During that time, the Postal Service set aside nearly $21 billion to pre-pay retiree health care.

The Postal Service has also overpaid pension contributions into two federal pension plans. An independent audit estimates that  the Postal Service overpaid by $7 billion its contributions to the Federal Employee Retirement System and by $50 billion to $75 billion to the Civil Service Retirement System.

Sen. Sanders has also filed legislation, S 1853, that addresses the problems that caused the shortfall. The bill also seeks ways to expand postal services not cut them.

S 1853 allows the Postal Service to recover its pension plan overpayments and eliminates the retiree health plan pre-funding requirement, which is unique to the Postal Service since no other government entity or private corporation funds its retiree health plan this way.

It would also lift legislated prohibitions that keep the Postal Service from providing revenue generating services such as notary services, new media services, license issuance, contracting with state and local agencies to provide services, and shipping wine and beer. It also allows the Postal Service to provide services that mail systems in many other countries provide, including digital services. The bill also protects six-day mail delivery and requires strict standards for timely mail delivery.

Unlike Sanders’ bill, other bills that Congress is considering would cut and eliminate postal services. H.R. 2309, which was approved by the House Oversight and Government Reform Committee, requires the Postal Service to make a minimum of $3 billion worth of cuts in post offices and mail processing facilities within two years.

S. 1789, which was approved by the Senate Committee on Homeland Security and Governmental Affairs, gives the Postal Service short-term financial relief but forces it to dismantle its retail and mail-processing network.

“Dismantling the Postal Service’s processing and distribution network will devastate mail service, damage the economy, and drive customers away,” Guffey said. “The Postal Service network is still a vital part of the nation’s infrastructure and destroying it will hurt, not help, the Postal Service.”

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