NALC President Fredric Rolando testifies before Congress (beginning at minute 40).

Recently, a number of proposals have been floated about cutting back on the offerings of the United States Postal Service. Among the suggestions are eliminating Saturday service and closing numerous post offices across the country. These ideas are said to be necessary, according to Postal Service officials, because the Service is losing large sums of money in delivering the mail.

Current proposals include eliminating 220,000 postal jobs through cuts and attrition by 2015. This is in a climate where the USPS has already eliminated 212,000 jobs in the last ten years. Also proposed is a plan to withdraw postal employees and retirees from the Federal Employees Health Benefits Program and the creation of a new program that would almost certainly have weaker benefits.

United States Postmaster General Patrick Donahoe is on record as also proposing cuts to postal employees' health and pension benefits. National Association of Letter Carriers President Fredric Rolando sees clear signs that Donahoe is intent on attacking the collective bargaining rights of postal workers and that he wants to "override lay-off protection provisions in the postal unions’ contracts." In a recent white paper titled "Workforce Optimization," the Postal Service directly asked Congress to void lay-off protection provisions. The USPS developed its proposals without any input from NALC or any other unions.

Rolando lays out the real root of the problem: "The problem lies elsewhere: the 2006 congressional mandate that the USPS pre-fund future retiree health benefits for the next 75 years, and do so within a decade, an obligation no other public agency or private firm faces. The roughly $5.5 billion annual payments since 2007 — $21 billion total — are the difference between a positive and negative ledger."

Postal Service management recently claimed: “If we were a private company, we would have already filed for bankruptcy and gone through restructuring—much like major automakers did two years ago.” NALC responded by calling this claim the "Big Lie." If the USPS were a private company, NALC argued, it wouldn't have been subjected to the pre-funding requirement and it would've been profitable, since the pre-funding requirement is responsible for 100 percent of the Service's losses in recent years.

NALC suggests that the problem has an easy fix. Instead of eliminating the requirement for pre-funding future benefits, Rolando says that the Postal Service should be allowed to transfer funds from pension surpluses instead of operating funds. That would continue to fund both pensions and retiree health benefits funded well into the future while putting the operations budget back into a surplus without cutting back on services or laying off workers.

Continue reading »