USPS Financial Crisis Looms
APWU Members Must Take Action
(This article appeared in the September/October 2011 issue of The American Postal Worker magazine.)
With the Postal Service in danger of financial collapse — and an important deadline approaching — our pay, our benefits, and even our jobs are in jeopardy!
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.
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.
Anticipating the Demise of USPS
As the Sept. 30 due date draws near, with the USPS approaching its debt ceiling, we can expect a wave of negative news reports — as well as comments from politicians and other interested parties — about the demise of the Postal Service and what we, as a nation, should do about it.
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.
The next day, on June 23, Rep. Darell Issa (R-CA) and Rep. Dennis Ross (R-FL) introduced H.R. 2309, the Post- al “Reform” Act of 2011, which would be devastating for the USPS and for postal employees.
Rep. Issa said the bill is designed to avoid a “taxpayer bailout,” and many news outlets reported the “bailout” explanation without question.
But in fact, the federal government is holding billions of dollars of USPS overpayments to its pension accounts, and doesn’t 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.
H.R. 2309 would do nothing about the pension overpayments or the pre- funding mandate – the cause of the crisis. Instead, it would punish workers and curtail service to citizens and businesses across the country.
The bill would establish a “solvency authority” with the power to unilaterally renegotiate our contract — to cut wages, abolish benefits, and end our protection against layoffs!
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. (Click here for more information.)
Not a Single Cent
Regrettably, many citizens mistakenly believe the Postal Service is funded by the federal government. Of course, that’s not the case: The USPS is supported by the sale of stamps and postage — not taxpayers.
Many politicians also fail to grasp this important fact — 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 “bailout.”
To help dispel the “bailout-burden” myth, the APWU launched a nationwide television ad campaign on July 11, with spots airing on CNN, MSNBC, and FOX News. The union’s 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: Ever wonder what this costs you, as a taxpayer? Not a single cent.
Our message must have been effective, because the day it began airing Rep. Issa called the ad “misleading,” and asked the union to cancel it. We rejected his request, writing, “The Postal Service is not subsidized by taxpayers. We will continue to publicize this important truth.” As we go to press, we are planning the next phase of our media campaign.
APWU Fights Back
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’s goals; works constantly to make sure our members are informed about these crucial issues, and coordinates the union’s 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.
But our members — that’s you — 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.)
We have asked locals to organize visits to members of Congress to discuss our concerns. If you don’t hear from your local officers, ask them why. Let them know you want to get involved.
A Simple Solution — Blocked?
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’t allow Rep. Lynch’s bill to come up for a vote! We must demand that Rep. Issa stop blocking H.R. 1351.