As the US Postal Service prepares to default on a $5.5 billion payment to the US Treasury, postal worker unions are blaming privatization proponents for blocking congressional action that would make it possible for USPS to meet its financial obligation and begin making reforms that protect services and deal with the challenges of delivering mail in the 21st century.
“The postal debacle is a manufactured crisis, and it is being exploited by those who want to privatize the Postal Service,” said Cliff Guffey, president of the American Postal Workers Union. “The House Republican leadership’s bill to ‘fix’ the Postal Service couldn’t be clearer.”
The Republican leadership’s bill to which Guffey refers is HR 2309 sponsored by Rep. Darrell Issa of California. The bill, according to APWU, would end Saturday delivery, close thousands of rural post offices, shut down hundreds of mail processing facilities, and create a commission that could override union contracts.
Worst of all, HR 2309 does not address the main cause of the Postal Service’s financial problems–a requirement enacted by Congress in 2006 that makes the Postal Service pre-fund its 75-year retiree health care obligation.
As a result of this requirement, the Postal Service must pay the US Treasury billions of dollars a year until 2016 to fund the payment of medical bills, some of which won’t come due until 2081.
The Postal Service has said that it won’t be able to pay the $5.5 billion pre-funding payment that is due August 1. Another payment of $5.6 billion is due in September.
During the two years before the pre-funding requirement went into effect, the Postal Service operated in the black. Its deficit began to mount as the pre-funding requirement went into effect. This pre-funding requirement now accounts for about 85 percent of the Postal Services’ red ink. For this year, the pre-funding requirement is responsible for 94 percent of its deficit.
There is alternative legislation pending before Congress that would save the Postal Service from default and enact reforms needed to make postal services more closely align with the needs of a modern economy that relies more on electronic communications.
HR 1351 allows the Treasury to credit the Postal Service for the more than $13 billion the Postal Service has overpaid to its pension plan. Such a credit would allow the Postal Service to use its own money to meet its immediate pre-funding obligation.
HR 1351 also includes some of the postal reforms that the Senate passed last spring and sent to the House for consideration.
In addition to addressing the pre-funding obligation, the Senate bill, according to one of its sponsors Sen. Bernie Sanders, maintains overnight delivery standards and Saturday delivery and “creates a commission. . . to (develop) ways for the Postal Service to become more entrepreneurial as it adjusts to mail volume changes caused by e-mail and the Internet.”
But rather than allowing HR 1351, which has 230 co-sponsors to advance, Rep. Issa, who chairs the congressional committee that oversees the Postal Service, has insisted that his bill move forward instead.
Fredric Rolando, president of the National Association of Letter Carriers, said that Issa’s decision to avoid action that could address the pre-funding obligation is a deliberate attempt to create an artificial crisis that can be used as an excuse to cut postal services.
Critics of the Issa bill say that the cuts to service required by Rep. Issa’s bill will spark customer ire that will eventually be used as an excuse to dismantle postal services and privatize what’s left.
AllGov.com reports that Rep. Issa has received more than $35,000 in campaign contributions from PACs and individuals associated with the Postal Services’ main competitor UPS.