U.S. Postal Service’s challenges are political, not financial

Following is a news release from David Yao of the Greater Seattle Area Local of the American Postal Workers Union:

(Sept. 28) — The U.S. Postal Service on Sept. 26 issued a short statement confirming that that it will not make a Sept. 30 scheduled payment of $5.6 billion, a mandated payment to prefund retiree health benefits that was required by Congress under a 2006 law. The announcement noted, “Comprehensive reform of the laws governing the Postal Service is urgently needed in order for the Postal Service to fully implement its five-year business plan and return to long-term financial stability.”

The announcement failed to note that the mandated payment is an artificial debt that Congress has not imposed on any other entity, supposedly to fund benefits to employees who have not even been born. Nor did the release mention that previous payments totaling $22 billion have nearly wiped out the Postal Service’s $15 billion line of credit, after having erased an operating profit of over $6 billion for 2007-2008.

The Sept. 26 statement mildly asserts that: “The Postal Service continues to encourage comprehensive legislative action in this Congress.”

It does not mention that the House Republican leadership has blocked a bipartisan postal recovery bill, H.R. 1351 that is sponsored by more than 50% of the representatives. A July 15 editorial in the Federal Times called the House of Representative’s failure to act “disgraceful” and described the inaction of House leaders as “contempt for the Postal Service and a lack of respect for the law and for the obligations of their own institution.”

After years of fruitless lobbying to “encourage” legislative action, postal unions and community supporters have engaged in rallies, informational picketing, and public events, such as a June hunger strike, to educate the public as to the artificial nature of the postal financial crisis which was created by Congress.

Misleading Financial Figures

The Postal Service has reported an $11.6 billion loss for the first three quarters of its fiscal year. However, that figure includes $9.2 billion to fulfill the prefunding mandate — payments that were never made. The more accurate figure is a $2.4 billion loss on $49.5 billion in operating revenue.

The artificially inflated loss figure would appear to support drastic cuts in service that unions and community activists say are unnecessary. The Postal Service is seeking to reduce delivery days, end delivery to customers’ doors, and slash rural post office hours. In addition, unless Congress prevents a change in delivery standards, the Postal Service plans to slow local first class mail transport in February 2014, from next-day to two-day delivery, a proposal that has received little publicity.

Saving Postal Service is a Political, not a Financial Problem

To restore postal finances and preserve customer service, repealing the 2006 pre-funding mandate would seem obvious. In addition, postal overpayments into federal pension funds total many billions. Legislation introduced in Congress that calls for the repeal of pre-funding, and the return to the Postal Service of pension overpayments, has been blocked by the Republican House leadership. A Senate bill that passed in April provides inadequate protection from service cuts.

The Greater Seattle Area Local of the American Postal Workers Union asks the public to contact their senators and congressional representatives to express support for true financial relief to the Postal Service, and opposition to any and all cuts in service.