Crooks and Liars
Tuesday August 16, 2011 04:00 pm
The Plot to Kill the Post Office…And Its Union Contracts
By Kenneth Quinnell
NALC President Fredric Rolando testifies before Congress (beginning at minute 40).
Recently, a number of proposals have been floated about cutting back on the offerings of the United States Postal Service. Among the suggestions are eliminating Saturday service and closing numerous post offices across the country. These ideas are said to be necessary, according to Postal Service officials, because the Service is losing large sums of money in delivering the mail.
Current proposals include eliminating 220,000 postal jobs through cuts and attrition by 2015. This is in a climate where the USPS has already eliminated 212,000 jobs in the last ten years. Also proposed is a plan to withdraw postal employees and retirees from the Federal Employees Health Benefits Program and the creation of a new program that would almost certainly have weaker benefits.
United States Postmaster General Patrick Donahoe is on record as also proposing cuts to postal employees’ health and pension benefits. National Association of Letter Carriers President Fredric Rolando sees clear signs that Donahoe is intent on attacking the collective bargaining rights of postal workers and that he wants to “override lay-off protection provisions in the postal unions’ contracts.” In a recent white paper titled “Workforce Optimization,” the Postal Service directly asked Congress to void lay-off protection provisions. The USPS developed its proposals without any input from NALC or any other unions.
Rolando lays out the real root of the problem: “The problem lies elsewhere: the 2006 congressional mandate that the USPS pre-fund future retiree health benefits for the next 75 years, and do so within a decade, an obligation no other public agency or private firm faces. The roughly $5.5 billion annual payments since 2007 — $21 billion total — are the difference between a positive and negative ledger.”
Postal Service management recently claimed: “If we were a private company, we would have already filed for bankruptcy and gone through restructuring—much like major automakers did two years ago.” NALC responded by calling this claim the “Big Lie.” If the USPS were a private company, NALC argued, it wouldn’t have been subjected to the pre-funding requirement and it would’ve been profitable, since the pre-funding requirement is responsible for 100 percent of the Service’s losses in recent years.
NALC suggests that the problem has an easy fix. Instead of eliminating the requirement for pre-funding future benefits, Rolando says that the Postal Service should be allowed to transfer funds from pension surpluses instead of operating funds. That would continue to fund both pensions and retiree health benefits funded well into the future while putting the operations budget back into a surplus without cutting back on services or laying off workers.
Ending Saturday service would create more problems that it would solve. More than 80,000 jobs would be lost and millions of Americans would face disruptions to their business and personal lives, as financial transactions are delayed, prescription drugs don’t get to patients as quick as they otherwise would and other disruptions are created. The Postal Regulatory Commission found that ending Saturday service would disproportionately hurt elderly and rural Americans. The Commission also determined that as much as 25 percent of First Class and Priority mail could be delayed two days or more.
The Commission found that going to five-day service would not save as much money as Postal Service leaders project. Saturday delivery, which amounts to only two percent of postal costs, accounts for 17 percent of service.
The suggestion that the Postal Service faces a major crisis — similar to attacks across the country that have preceeded assaults on other unions — is an overstatement, of course. The Postal Service hasn’t used any taxpayer funding for more than twenty-five years. It pays for it’s operations through the sale of it’s services and products. In the past four years, operational revenues at the USPS have exceeded costs by $611 million. Customer satisfaction and delivery of the mail on time are at record highs.
According to Rolando, fixing the real problem — the pre-funding of future benefits at such an exaggerated standard — isn’t even on the table. Representatives Darrell Issa (R-CA) and Dennis Ross (R-FL) introduced a bill the reform the postal service, but it doesn’t actually address the primary problem the USPS faces. It would allow for some of the more extreme proposals to be implemented, including the elimination of Saturday service and the nullification of collective bargaining agreements already in existence.