This morning’s press release from the USPS announcing its Q2 financial results included this from USPS CFO Joe Corbett:
“Some comments in recent news reports suggest that all we need from Congress is help with restructuring our retiree health benefit plan,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “Nothing can be further from the truth. Our liabilities exceed our assets by $42 billion and we have a need for more than $10 billion to invest in new delivery vehicles, package sortation equipment, and other deferred investments.
“We haven’t been making the retiree health benefit prefunding payments because we can’t,” added Corbett. “If legislation reduced the required retiree health benefit prefunding payment, it doesn’t provide us with any more cash to pay down our debt or put much needed capital into our business. Only comprehensive postal legislation that includes a smarter delivery schedule, greater control over our personnel and benefit costs, and more flexibility in pricing and products will provide the necessary cash flows.”
Corbett didn’t identify the people “suggesting” that the PAEA pre-funding requirement is the only problem facing the USPS- probably because no one seriously believes that. There are plenty of people pointing out the fact that ALL of the USPS current fiscal year loss is due to pre-funding- but that’s not an opinion- it’s simple arithmetic.
So who was Joe talking about? We combed our archives, and the best we could come up with was this- from a leading figure in the USPS, testifying before Congress in 2011:
“What we need is your help on these big issues that are beyond our control… The things we can’t control are the mandates, the $5.5 billion in the retiree health benefits- get those things out of the way and you will never see us again– all you’ll hear about is accolades about how good of an organization the US Postal Service is…”
That was, of course, Joe Corbett’s boss, the Postmaster General.
Readers might recall that the PMG was accompanied at that hearing by then APWU President Cliff Guffey. The PMG praised the contract he and Guffey had recently signed, saying it would “help lay a foundation that is fair to our employees and stakeholders”.
If you’ve forgotten about the PMG’s comments, it’s understandable- he changed his mind just three months later, and demanded the right to unilaterally throw out the contract he had agreed to, slash benefits for postal workers and retirees, raise prices, and cut services.