APWU: Based on a Falsehood, Ryan Budget Would Plunder Postal Service

APWU Web News Article #058-14, April 1, 2014

apwulogoThe postal provisions in the budget proposed by Rep. Paul Ryan (R-WI) on April 1 are a “thinly-veiled attempt to plunder the Postal Service — to slash service, cut workers’ benefits, and render our great national treasure ripe for privatization,” said APWU President Mark Dimondstein.

They’re also based on a fallacy, Dimondstein points out: The USPS did not have “an operating loss of $1 billion” in fiscal year 2013, as Rep. Ryan asserts.

“In fact, the Postal Service had an operating surplus of $600 million in fiscal year 2013. The Postal Service’s losses are the result of a manufactured crisis — the legislative requirement that forces the USPS to pre-fund healthcare benefits for future retirees 75 years in advance and within a 10-year period,” Dimondstein said.

“As Rep. Ryan undoubtedly knows, the USPS is not supported by tax dollars and does not contribute to the nation’s debt,” he added.

The postal provisions of the Ryan budget are printed below:

“Reform the Postal Service. The United States Postal Service (USPS) is unable to meet its financial obligations and is in desperate need of structural reforms. In fiscal year 2013, USPS had an operating loss of $1 billion and defaulted on another $5.6 billion payment to prefund the retirement health care of their employees. As of fiscal year 2013, the USPS had a total of approximately $112 billion in unfunded long-term debt, including promised health-benefit compensation for Postal retirees, workers’ compensation, and debt owed to the Treasury.

“The budget recommends giving the Postal Service the flexibility that any business needs to respond to changing market conditions, including declining mail volume, which is down more than 25 percent since 2006. The budget also recognizes the need to reform compensation of postal employees who currently pay a smaller share of the costs of their health and life-insurance premiums than other federal employees. Taken together, these reforms are estimated to save about $19 billion over ten years and would help restore USPS solvency.”

Voodoo Economics

“The summary provided by Mr. Ryan is riddled with misleading statements,” said APWU Legislative and Political Director John Marcotte. “The USPS has overfunded both the CSRS [Civil Service Retirement System] and FERS [Federal Employees Retirement System] by tens of billions of dollars; has $50 billion set aside for future retiree healthcare; is on its way to making a $1billion dollar surplus this year, and takes no tax money. To count cuts to the Postal Service as ‘budget savings’ is voodoo economics at its worst,” he said.

Under the Ryan proposal, FERS enrollees would pay more toward their retirement without a corresponding increase in benefits, Marcotte pointed out. “Mr. Ryan would make fire fighters, park rangers, police officers and postal workers pay more, while he proposes tax cuts for the wealthiest Americans,” he said. The Ryan budget calls for cutting the corporate tax rate to 25 percent.