{"id":4105,"date":"2011-09-06T20:36:35","date_gmt":"2011-09-07T03:36:35","guid":{"rendered":"http:\/\/amicuscuria.com\/wordpress\/?p=4105"},"modified":"2011-09-06T21:00:20","modified_gmt":"2011-09-07T04:00:20","slug":"usps-financial-crisis-looms","status":"publish","type":"post","link":"http:\/\/amicuscuria.com\/wordpress\/usps-financial-crisis-looms\/","title":{"rendered":"USPS Financial Crisis Looms"},"content":{"rendered":"

The US Postal Service employs more people than any other branch associated with government service in America, even the military! Due to a long history of managerial ineptitude, it’s in trouble and proposes cutting 225,000 jobs, breaching its labor contracts, eliminating career employee status, \u00a0abandoning its pension & retiree health plan obligations, plus attenuating collective bargaining rights as the nation struggles to avoid a double recession.<\/p>\n

(Excerpt from Sept\/Oct, 2011, APWU magazine):<\/p>\n

With the Postal Service in danger of financial collapse \u2014 and an important deadline approaching \u2014 our pay, our benefits, and even our jobs are in jeopardy!<\/p>\n

For months, speculation has been widespread that the USPS will be forced to close its doors in 2012. Earlier this year, the USPS announced that it expects to default on a $5.5 billion payment due on Sept. 30 to pre-fund the healthcare benefits of future retirees. Next year, the Postal Service may not have enough cash on hand to make payroll.<\/p>\n

The huge pre-funding fee is for a 75-year liability, which the Postal Service is required to pay over a 10-year period. No other government agency or private company is required to make such a payment, but a provision of the 2006 Postal Accountability and Enhancement Act demands it of the USPS.<\/p>\n

Anticipating the Demise of USPS<\/strong><\/p>\n

As the Sept. 30 due date draws near, with the USPS approaching its debt ceiling, we can expect a wave of negative news reports \u2014 as well as comments from politicians and other interested parties \u2014 about the demise of the Postal Service and what we, as a nation, should do about it.<\/p>\n

Unfortunately, many of the stories and statements will be filled with incorrect assumptions and blatant inaccuracies. This is precisely what happened over the summer, when management announced it was suspending payments to FERS, the Federal Employees Retirement System, to conserve cash.<\/p>\n

The next day, on June 23, Rep. Darell Issa (R-CA) and Rep. Dennis Ross (R-FL) introduced H.R. 2309, the Post- al \u201cReform\u201d Act of 2011, which would be devastating for the USPS and for postal employees.<\/p>\n

Rep. Issa said the bill is designed to avoid a \u201ctaxpayer bailout,\u201d and many news outlets reported the \u201cbailout\u201d explanation without question.<\/p>\n

But in fact, the federal government is holding billions of dollars of USPS overpayments to its pension accounts, and doesn\u2019t need a bailout. The USPS has a surplus of $6.9 billion in its FERS account, and, according to two independent actuarial studies, has overpaid the CSRS account by $50 billion to $75 billion.<\/p>\n

H.R. 2309 would do nothing about the pension overpayments or the pre- funding mandate \u2013 the cause of the crisis. Instead, it would punish workers and curtail service to citizens and businesses across the country.<\/p>\n

The bill would establish a \u201csolvency authority\u201d with the power to unilaterally renegotiate our contract \u2014 to cut wages, abolish benefits, and end our protection against layoffs!<\/p>\n

H.R. 2309 also would create a board that would order $1 billion worth of post office closures in the first year and $1 billion worth of facility closures in the second year. If it is enacted, thousands of offices throughout the country would be closed.\u00a0(Click here for more information<\/a>.)<\/em><\/p>\n

Not a Single Cent<\/strong><\/p>\n

<\/strong>Regrettably, many citizens mistakenly believe the Postal Service is funded by the federal government. Of course, that\u2019s not the case: The USPS is supported by the sale of stamps and postage \u2014 not taxpayers.<\/p>\n

Many politicians also fail to grasp this important fact \u2014 or they choose to ignore it. They portray the USPS as a burden on the American people and characterize any effort to correct the unfair pre-funding mandate or the pension overpayments as a \u201cbailout.\u201d<\/p>\n

To help dispel the \u201cbailout-burden\u201d myth, the APWU launched a nationwide television ad campaign on July 11, with spots airing on CNN, MSNBC, and FOX News. The union\u2019s 30-second ad has a very direct message: It describes the enormity of the job postal workers perform, and ends with a simple question and response:\u00a0Ever wonder what this costs you, as a taxpayer? Not a single cent.<\/em><\/p>\n

Our message must have been effective, because the day it began airing Rep. Issa called the ad \u201cmisleading,\u201d and asked the union to cancel it. We rejected his request, writing, \u201cThe Postal Service is not subsidized by taxpayers. We will continue to publicize this important truth.\u201d As we go to press, we are planning the next phase of our media campaign.<\/p>\n

APWU Fights Back<\/strong><\/p>\n

<\/strong>The ads are just a small part of our campaign to address the crisis. At the national level, the Legislative and Political Department advocates tirelessly for our position on Capitol Hill; the APWU testifies before House and Senate committees; works behind-the-scenes to advance the APWU\u2019s goals; works constantly to make sure our members are informed about these crucial issues, and coordinates the union\u2019s effort in the field. Organizers are calling every APWU local in the country, encouraging them to contact their congressmen, and we are tracking who has been contacted, where they stand, and who needs to be targeted for greater effort.<\/p>\n

But our members \u2014 that\u2019s you \u2014 are the real key to our success. It is urgent that you contact your congressional representatives to let them know that we adamantly oppose H.R. 2309 and that we support H.R. 1351, which would allow the USPS to use the billions of dollars in pension overpayments to meet its financial obligations, including the pre-funding mandate.(See below.)<\/em><\/p>\n

We have asked locals to organize visits to members of Congress to discuss our concerns. If you don\u2019t hear from your local officers, ask them why. Let them know you want to get involved.<\/p>\n\n\n\n
A Simple Solution \u2014 Blocked?<\/strong><\/strong>H.R. 1351, a bill introduced by Rep. Stephen Lynch (D-MA) and co-sponsored by more than 180 House members, would solve the USPS financial crisis without cutting pay and benefits, eliminating collective bargaining rights, or slashing service: It would allow the USPS to use the billions of dollars in pension overpayments to meet its financial obligations, including the pre-funding mandate.But the word on Capitol Hill is that Rep. Darrell Issa, the chairman of the House Oversight and Government Reform Committee, won\u2019t allow Rep. Lynch\u2019s bill to come up for a vote! We must demand that Rep. Issa stop blocking H.R. 1351.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Fix USPS Finances, Save Postal Services<\/strong><\/p>\n

At a pair of congressional hearings in May and June, APWU president<\/p>\n

\"\"

Cliff testifies in favor of preserving USPS and collective bargaining rights<\/p><\/div>\n

Cliff Guffey told lawmakers they must act soon to address the cause of the Postal Service\u2019s financial crisis \u2014 not slash customer service by dismantling the retail and mail processing network.<\/p>\n

At a hearing of the House Subcommittee on Federal Workforce, U.S. Postal Service and Labor Policy, Guffey took issue with the title of the hearing GOP lawmakers had given it: \u201cPostal Infrastructure: How Much Can We Afford?\u201d<\/p>\n

\u201cThe \u2018we\u2019 in this question is postal customers, not taxpayers,\u201d Guffey said, refuting the myth that taxpayers fund the nation\u2019s mail service, and that the USPS may need a \u201cbailout.\u201d<\/p>\n

The union president pointed out that the nation\u2019s mail service receives no taxpayer support \u2013 only payments for services rendered to the government \u2014 as Congress ordered when it established the USPS as an independent agency in 1970. Rather than gutting the retail and mail processing network our economy depends on, he said, the Postal Service \u201cmust expand its services to fill needs emerging because of digital communications.\u201d<\/p>\n

Instead of closing post offices, Guffey urged lawmakers to support legislation that would permit the USPS to partner with other government agencies to more efficiently deliver government services and provide economic justification to maintain a postal presence in rural and economically disadvantaged communities.<\/p>\n

\u201cThe Post Office provides a unique public service that is still a necessity for many people,\u201d he pointed out. \u201cIt is a focal point of many small communities; it is \u2018where the flag flies;\u2019 it is where the government provides support for the community.<\/p>\n

\u201cWe strongly urge postal policy makers, both inside the Postal Service and elsewhere in government, to think creatively about how the Postal Service should be adapting its retail services to meet society\u2019s current needs,\u201d he said. \u201cIt would be tragic to dismantle the postal retail infrastructure and lose an opportunity to maintain it and improve the delivery of government services.\u201d<\/p>\n

The APWU recognizes the need for change in response to reduced mail volume and changes in the mail mix, Guffey said, and he pointed out that the new Collective Bargaining Agreement provides the USPS increased workforce flexibility, and includes innovative provisions that will permit management to provide retail services at lower costs.<\/p>\n

However, the union has actively resisted the consolidation of many operations, the union president said. \u201cIn many cases, we have found that cost savings have been over-estimated and that actual cost savings cannot justify the adverse service impacts of the changes.\u201d<\/p>\n

It is also difficult to accurately gauge the needs of the mail processing network because mail volume is constantly in flux, Guffey said. Despite the USPS overall reduction of work hours, overtime has increased \u2014 which shows that the Postal Service needs its current employees.<\/p>\n

Questionable Savings<\/strong><\/p>\n

Subcommittee Chairman Dennis Ross (R-FL) also invited testimony from<\/p>\n

\"\"

Rep. Dennis Ross (R-FL)<\/p><\/div>\n

several witnesses to press the case that the USPS network should be cut. Philip Herr, director of Infrastructure Issues for the Government Accountability Office (GAO), called on Congress to \u201cmake it easier and faster to close post offices.\u201d<\/p>\n

When asked by Rep. Stephen Lynch (D-MA) how many USPS facilities he thinks the USPS \u201creally needs,\u201d Herr said he \u201cwouldn\u2019t venture a guess.\u201d<\/p>\n

Ross also called on panelist Mike Winn, president of Greylock Associates, a<\/p>\n

\"\"

Rep. Steve Lynch (D-MA)<\/p><\/div>\n

firm that provides \u201cconsulting support to mail service providers and organizations that utilize the USPS,\u201d and Joe Hete, President and CEO of Air Transport Services Group, a \u201cleading provider of air cargo transportation.\u201d<\/p>\n

Hete\u2019s invitation to testify at the hearing left many postal observers scratching their heads, as he has no postal experience. Nonetheless, he regaled the panel with a story about how his company gained profitability by reducing its workforce.<\/p>\n

Hete claimed postal employees get paid too much compared to workers in the private sector, blaming employees\u2019 salaries and benefits for the USPS\u2019 \u201cinability to meet its payroll in 2012.\u201d He also suggested that the USPS restructure its union contracts, and called for elimination of the no-layoff clause.<\/p>\n

Eight days after the hearing, Ross joined Rep. Darrell Issa (R-CA) in introducing postal \u201creform\u201d legislation,\u00a0H.R. 2309<\/a>, which the APWU has condemned as a \u201creckless assault on postal workers and the Postal Service.\u201d<\/p>\n

NOT a \u2018Bailout\u2019<\/strong><\/p>\n

<\/strong>At a May 17 Senate hearing on the USPS financial crisis, Guffey stressed that the Postal Service doesn\u2019t need a bailout.<\/p>\n

\u201cThe Postal Service is very capable of dealing with the challenges it is facing<\/p>\n

\"\"

Rep. Darrell Issa (R-CA)<\/p><\/div>\n

because of declining mail volumes and a shift to electronic transmissions,\u201d the union president told the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security.<\/p>\n

\u201cWhat it cannot sustain is the burden of the unique and unreasonable requirement that it pre-fund its retiree health benefits over a 10-year period,\u201d he said, pointing out that no other government agency or private company bears this burden. He also noted that USPS pension accounts are overfunded by billions of dollars.<\/p>\n

Guffey praised provisions of Sen. Carper\u2019s \u201cPOST Act\u201d (S. 1010) that would<\/p>\n

\"\"

Sen. Tom Carper (D-DE)<\/p><\/div>\n

permit the USPS to use overpayments to its pension accounts to meet the pre-funding obligations, noting they would \u201cgive the Postal Service more than $5 billion in breathing room each year.\u201d<\/p>\n

But he also criticized several negative aspects of the bill. The proposed legislation would give the Postal Service authority to close post offices solely for financial reasons, and would require arbitrators to consider the financial health of the USPS when contract negotiations end in arbitration, he pointed out.<\/p>\n

\u201cCutting service is not the answer to USPS financial difficulties,\u201d Guffey said.<\/p>\n

Click here for text of APWU’s testimony at these and other congressional hearings.<\/a><\/em><\/p>\n

 <\/p>\n

Urge Your Congressman to Support H.R.1351<\/strong><\/p>\n

APWU President Cliff Guffey is asking all union members to contact their legislators and urge them to oppose a bill introduced by Rep. Darrell Issa (R-CA) and Rep. Dennis Ross (R-FL). The bill, H.R. 2309, is a reckless assault on postal employees and postal services, he said.<\/strong><\/p>\n

\u201cInstead of slashing pay and benefits and closing facilities and post offices, Congress must address the underlying cause of the USPS financial crisis,\u201d Guffey added.<\/p>\n

Congress should allow the Postal Service to apply the billions of dollars in overpayments to its pension funds toward its financial obligations, including the obligation to pre-fund the health benefits of future retirees,\u201d Guffey said. H.R. 1351, introduced by Rep. Stephen Lynch (D-MA) would do just that.<\/p>\n

\u201cI ask all APWU members to contact their legislators and urge them to support H.R. 1351,\u201d the union president said.<\/p>\n

H.R. 1351, would correct the inequities in the Postal Service\u2019s pension accounts, and would allow the USPS to use its overpayments toward its requirement to pre-fund future retiree health benefits \u2013 without slashing service.<\/p>\n

\u201cThis important legislation will ensure a viable USPS in the future and protect jobs and service for the American people,\u201d Guffey said.<\/p>\n

[more about fixing USPS finances]<\/a><\/p>\n

 <\/p>\n

\"\"

Preserve your local post office & collective bargaining rights\/jobs<\/p><\/div>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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