WASHINGTON—The head of the National Association of Letter Carriers (NALC) union urged Congress today to reject a Postal Service proposal to eliminate Saturday mail delivery to American citizens as a quick fix to the financial problems of the U.S. Postal Service, saying that lawmakers should instead implement recommendations of the USPS Office of Inspector General to save the Postal Service tens of billions of dollars in unnecessary retiree health pre-funding payments by returning the $75 billion it has been overcharged for civil service pension costs.
NALC President Fredric V. Rolando said “action on the pre-funding requirement is the best starting point for a long-term strategy to preserve affordable universal service, a strategy that must include product innovation and revenue generation as well as efficiency improvements developed in negotiations for new employee contracts.”
The postal Inspector General (IG) issued a report in January (“The Postal Service’s Share of CSRS Pension Responsibility,” Report Number: RARC-WP-10-001) that found that the Postal Service had been overcharged by $75 billion going back to 1971, when the USPS was created, for pension costs associated with pre-1971 service by employees of the taxpayer-funded Post Office Department. The IG recommended that the accurately measured ‘postal surplus’ in the Civil Service Retirement Fund be transferred to the Postal Service Retiree Health Benefits Fund, which would allow Congress to repeal the crushing pre-funding payments for retiree health now required by law.
In a statement submitted to a hearing of the Senate Appropriations Subcommittee on Federal Service and General Government, Rolando said the U.S. Postal Service “is too important to the country to make rash decisions in an environment of financial distress.”
Rolando characterized the proposal of Postmaster General John E. Potter to discontinue Saturday mail delivery and collections as “draconian.” He said such an action “should be a last resort policy, not a first resort policy.”
“The 200,000 men and women who deliver the mail on city carrier routes today urge you to exercise great caution and to stop and consider the real cause of the immediate crisis: the unworkable and unreasonable pre-funding policy adopted in 2006,” Rolando said. “Congress should correct the retiree health pre-funding policy first – it is the single most effective step you can take to stabilize the Postal Service’s finances.”
Rolando acknowledged that in addition to pre-funding reform the Postal Service’s business model deserves a serious and comprehensive debate in order to secure the long-term viability of the Postal Service.
“NALC and the other postal unions are prepared to deal with the lingering effects of the recession and the negative impact of the Internet at the negotiating table, just as we have adapted to varying business conditions for some 40 years of successful collective bargaining,” he said.
“We believe that it is only in the context of financial stability that a serious and careful legislative debate can take place,” Rolando concluded. “That will require us to do our part at the bargaining table and for Congress to do its part on retiree health pre-funding reform.”