Help us right this listing ship
By J. Kingsbury
Economic Development Job Retention Committee for the Letter Carriers Union
The U.S. Postal Service (USPS) is in the midst of a financial crisis that is truly unnecessary. The Postal Accountability and Enhancement Act of 2006 is bankrupting the USPS. This law was passed by a Republican Congress and signed into law by a Republican President.
Its real intent is to dismantle and then privatize the largest unionized employer in the U.S., the USPS. Requiring the USPS to pay for future retirees health benefits covering the next 75 years, by 2016, is the method they’ve chosen.
The cost is a staggering amount, averaging some $5.5 billion per year from 2007 through 2016. Yes, that’s $55 billion dollars. The Republican Congress required this payment based on 757,000 USPS employees. The postmaster general recently stated the USPS has 580,000 employees (and decreasing). Using the more than 177,000 non-existent employees, the Republican Congress is requiring the USPS to make an additional $13 billion overpayment.
This required pre-funding is 8% of the Postal Service’s operating budget each year. That may not sound unmanageable, but 78% of our budget goes to payroll. That leaves 22% for things like vehicle maintenance and gas, a post office networks with electricity and water. So the 8% that goes to making this outrageous pre-payment is actually more than one-third of the Postal Service’s “discretionary” spending. Furthermore, the mandate to pre-fund its future retiree health costs, which no other agency or private company in America must do, accounts for 85% of the USPS’s losses since 2007 and 96% of 2nd quarter losses in 2012.
Can your employer afford that? Does your employer pre-fund for their future retiree health benefits like the USPS does? The answer isn’t a simple no, it’s hell no.! Occasionally, I use a more colorfully descriptive word to go along with no.
Adding to that financial burden is the fact that the USPS has already made over payments into the Civil Service Retirement System (CSRS). The Hay Group estimates the overpayment is between $50 billion and $55 billion, while the Segal Company estimates the overpayment to be in excess of $75 billion.
A 3rd Consultant, the Lazard Company, states both estimates are reasonable and are based on reasonable actuarial accounting methods.
Further, the USPS has made more than $11 billion in overpayments into the Federal Employees Retirement System (FERS), which covers workers hired since January 1984.
Currently the USPS has more than $45 billion in the Postal Service Retiree Health Benefits (PSRHB) account. With interest that’s enough to cover the cost of retiree health premiums for the next 15 to 20 years!
I believe Congress will eventually steal these overpayments (if they haven’t already) from the USPS retirement accounts, then cry to the world they had to “bail out” the USPS when the USPS exceeds its $15 billion debt ceiling.
Denying bargaining rights, ending 6-day delivery, terminating door-to-door delivery to 35-40 million addresses, further degradation of service standards, etc. are but a few of the changes that are being proposed, all because Congress and/or the President won’t take action to end the pre-funding payments that the USPS is being required to make.
The Senate recently passed S. 1789. It’s a bad piece of legislation and won’t fix the problem. In the House looms something much worse, Darryl Issa’s HR 2309, which would eviscerate the USPS. Although it passed through committee last year, it hasn’t been taken to the floor for a vote because it’s so regressive.
However there are two bills, S. 1853 and HR 3591, that will correct the financial plight of the USPS and allow it to build a business model so that it will play its part in the U.S. communications network far into the future.
The USPS remains the most trusted government agency in America. The Postal Service has held the top spot since the first annual “privacy trust” survey of the United States Government was completed seven years ago.
We can’t continue to do that without your help!