From the National Association of Postal Supervisors:

August 31, 2011

Dear Member of the United States Senate:

I write on behalf of the nearly 32,000 members of our association, many of whom work and vote in your District.

The United States Postal Service faces an unprecedented crisis. It is projected to run out of cash on September 30, an outcome caused largely by retiree health care prepayments the Postal Service is required to make that are far larger than reasonable or necessary. This result is due to Congressional statutory requirements imposed in 2006, not to Postal Service mismanagement.

We urge Congress to realign the Postal Service’s retiree health prefunding schedule to a larger time period consistent with what the Postal Service can afford, making use of a surplus created by Postal Service pension overpayments. That pension surplus, according to studies of the Postal Regulatory Commission and the Inspector General of the Postal Service, could be as large as $55-75 billion. Legislative proposals offered by Sen. Tom Carper (S. 1010) and Sen. Susan Collins (S. 353), in part, would realign the Postal Service’s prefunding payments.

Realignment of the Postal Service’s retiree health prefunding payments clearly would defuse the postal crisis. Most important, this action would eliminate the need for sweeping, alternative proposals recently advanced by the Postal Service, which we oppose, which would:

• Reduce delivery to six days per week to five days per week or less;
• Eliminate overnight delivery of First Class mail in local areas, resulting in the closure of nearly half of current mail processing facilities, eliminating thousands of jobs;
• Close thousands of small Post Offices, many of them in rural areas; and
• Permit the Postal Service to secede from the federal health and retirement programs and create alternative health and retirement plans for its employees and retirees.

The proposals offered by Sen. Tom Carper and Sen. Susan Collins, in part, would require the Office of Personnel Management to review the postal Service’s past pension payments, using modern, well-accepted principles of accounting, and to require the Postal Service to use any surplus of payments to satisfy its remaining health prefunding obligations under the 2006 law.

We urge you to support these measured and responsible efforts proposed by your colleagues to stabilize the Postal Service’s financial outlook. Without swift action, it will be difficult, if not impossible to avoid the massive changes in service and infrastructure the USPS unnecessarily has had to propose.

Louis M. Atkins
President

Atkins letter to Senate.pdf (application/pdf Object).

As most readers of this blog know, the US Postal Service does not receive any taxpayer dollars. Since its founding in 1971, the USPS has paid for its operations out of its own revenues. Far from being a burden on the taxpayer, the USPS has, according to reports by the Inspector General and outside auditors, been overcharged by $50-75 billion for its employees pensions, thus subsidizing the Federal Treasury. In addition, in 2006, Congress and President Bush imposed an additional $5.5 billion annual tax on the USPS. The tax was supposedly to finance the health benefits of potential future postal retirees. In an amazing coincidence, the $5.5 billion was exactly the amount OPM had discovered it was overcharging the USPS each year.

Better yet, because the retirement fund the $5.5 billion went to was “on-budget”, the USPS payments would artificially decrease the deficit by that amount. In other words, the USPS has given Congress an extra $5.5 billion a year to play with!

All of which makes you appreciate the utter cynicism of multimillionaire career politician Darrell Issa’s latest stunt- a web site called “savingthepostalservice.com”. Unlike the US Postal Service itself, the site is paid for by taxpayer dollars, to which Darrell obviously has free access.

Not surprisingly, Darrell’s web site doesn’t explain any of the facts behind the $5.5 billion tax on the USPS- it talks about lavish spending, but fails to mention the fact that without Congress’s mandates, the USPS would currently have zero debt and access to a $15 billion credit line to help it through the recession and rightsizing its infrastructure.

Darrell has introduced a bill to allow the USPS to throw out the labor agreements the USPS freely entered into with its union. The law also adds two additional layers of bureaucracy to the postal service, and could saddle it with an additional $10 billion in debt- all the better to achieve Darrell’s apparent goal- the elimination or privatization of the US Postal Service.

Darrell didn’t always feel this way about the USPS and its employees- as recently as a year ago he was still actively seeking the support (and accepting the contributions) of postal employee organizations.

What could possibly have turned Darrell around? It couldn’t be that he realized there was much more money to be made from the likes of the Koch Brothers and their “Tea Party” organization could it?

Here’s the text that appears on Darrell’s taxpayer financed website:

p>The United States Postal Service is bleeding money – $8.5 billion just last year. It’s also bleeding business – mail volume is down 20% since 2006 and not coming back. Just as trains replaced the pony express, the Internet has become the modern Postal Service’s greatest competition. That’s not going to change.

A better USPS, however, is possible. Explore the site. Get the facts. Learn about the Issa-Ross Postal Reform Act. Advise Congress on how to fix Postal budget shortfalls with the Postal Reform App.

Americans deserve an efficient USPS that delivers for decades. But misguided action – or none at all – could saddle taxpayers with a multi-billion dollar bailout for the Postal Service. The clock is ticking…

via Saving the Postal Service.

If you would like to tell Darrell what you think of his use of your money, he’s on Twitter at @DarrellIssa and on Facebook at https://www.facebook.com/darrellissa. (Yes, you’ll have to hold your nose and pretend to “like” Darrell if you want to post a comment…)

APWU President Cliff Guffey will testify before the Senate Committee on Homeland Security and Governmental Affairs on Sept. 6 about the financial crisis facing the Postal Service and what Congress must do to address it.

“I will tell members of the Senate Committee that the future of the Postal Service is in their hands. They have a solemn duty to save the nation’s mail system, which is the nerve center of a $1 trillion industry” the union president said.

Guffey is the only union president that was invited to testify; therefore, the four postal unions have agreed that his oral statement to the committee will represent the views of all bargaining unit employees. All of the unions will submit written testimony. In addition to the APWU, the postal unions are the National Association of Letter Carriers, the National Postal Mail Handlers Union, and the National Rural Letter Carriers Association.

The APWU president has been asked to focus his testimony on USPS proposals for legislation that would abrogate the union’s Collective Bargaining Agreement. The USPS is asking Congress to enact laws that would separate postal workers from the Federal Employees Health Benefits Program and from federal retirement plans and that would allow the agency to lay off 120,000 employees.

Guffey has denounced the proposals as a “reckless assault on the Postal Service and on postal employees.”

“The Postal Service is in danger of financial collapse,” the union president noted, “but the cause of its financial difficulties are often misunderstood.”

The problem is a 2006 law that is pushing the Postal Service into bankruptcy, he pointed out. The Postal Accountability and Enhancement Act imposes a burden on the USPS that no other government agency or private company bears. It requires the Postal Service to “pre-fund” the healthcare benefits of future retirees and forces the USPS to pay for a 75-year obligation in just 10 years – at a cost of more than $5 billion annually.

Meanwhile, Guffey noted, two independent auditors have found that, due to a faulty funding formula, the USPS has overpaid its pension accounts by more than $50 billion.

“Congress must get at the cause of the Postal Service’s financial crisis,” he said. “Lawmakers must allow the Postal Service to apply the pension overpayments to the pre-funding requirement.

“The APWU will vehemently oppose any attempt to destroy the collective bargaining rights of postal employees or tamper with our recently negotiated contract,” Guffey said. “Crushing postal workers and slashing service will not solve the Postal Service’s financial crisis.”

The hearing will be Webcast live by the committee. To watch the hearing, visit the committee’s Web site. Video will be available approximately 15 minutes prior to the scheduled start of the proceedings.

Other witnesses scheduled to testify are: Postmaster General Patrick R. Donahoe; Jonathan Foley, Director of Planning and Policy Analysis for the Office of Personnel Management; Phillip R. Herr, Director of Physical Infrastructure Issues for the Government Accountability Office; Louis M. Atkins, President of the National Association of Postal Supervisors; Ellen Levine, Editorial Director of Hearst Magazines, and Tonda F. Rush, Director of Public Policy for the National Newspaper Association.