NAPS: Congress Needs To Correct Two Massive Errors Driving USPS Into The Red

More than 500 Postal Supervisors, along with many Postmasters, are meeting with Congressional offices on the Hill March 22-23, 2011.

From the National Association of Postal Supervisors (NAPS)

The Postal Service warned Congress earlier this month that it will run out of cash by the end of the current fiscal year, on September 30, if it has to make the required payment of $5.5 billion into the Postal Retiree Health Benefit Fund.

Two massive errors – by Congress and the federal bureaucracy – have caused the Postal Service to approach the brink of financial insolvency. These mistakes were avoidable and should be cured by Congress.

Massive Error #1: Huge Retiree Health Prepayments. The first error involves the size of the annual Postal Service payment into the Postal Retiree Health Benefit Fund, a burden that Congress imposed on the Postal Service in 2006. No federal entity – other than the Postal Service — is required to make prefunding payments for future retiree health care costs. Prefunding is a good idea, BUT the size of the prepayments has bled the Postal Service into the red. The payments must be restructured, the same way a mortgage payment is restructured.

But for these large prefunding payments, the Postal Service would have been in the red in only two of the past four years, despite significant drops in mail volume due to the recession and the internet.

Massive Error #2: Huge Pension Overpayments. Ongoing errors by the federal bureaucracy – the Office of Personnel Management — have forced the Postal Service to make huge pension overpayments over the past 40 years into the federal civil service pension fund.

How much? The Postal Regulatory Commission and the Inspector General of the Postal Service estimate the Postal Service has overpaid between $55 – 75 billion into the civil service pension fund. This essentially has resulted in a hidden “Stamp Tax” on postage ratepayers.

Congress should correct these massive errors and restore the Postal Service to financial stability by:

— Refunding the Pension Overpayments to the Postal Service: Ordering OPM to recalculate the pension payments made by the Postal Service and refunding any overpayments back to the Postal Service; and by

— Directing the Postal Service to use the refunded pension overpayments to satisfy its future retiree health benefit obligations.

This is not a bailout. This is a win-win for government accountability and a solvent Postal Service. The correction of postal pension overpayments should not increase the federal deficit. Fair dealing between one arm of the federal government and another should not permit incorrect and unjustified payments into the federal treasury to stand.

Under current law, the Postal Service is required to deliver mail six days a week. As you know, the Postal Service has asked Congress to revise the law to permit the Postal Service to end Saturday delivery.

We believe that cutting Saturday delivery is unnecessary, at least for now. Saturday delivery will be counter-productive and harmful to the postal system, American
households and businesses.

If Congress acts to refund the Postal Service for its pension overpayments and restructures its pension and health benefit obligations, the Postal Service will be on a more stable financial footing – without the need to end Saturday delivery.

Reducing mail delivery days should be the last resort, not the first.

NAPS Legislative Issues Brief

6 thoughts on “NAPS: Congress Needs To Correct Two Massive Errors Driving USPS Into The Red

  1. i say comie cus yus is al commie that werk for guvernmint. yu shood git reel job lik i has.

  2. Thank you,”yucatanblue”! All too often on this blog people resort to name calling that does no good in helping us have a frank discussion on matters important to our employment. They think that any idea that does not meet their preconceived ideas has no merit at all. One thing is certain, working together we have a better chance of success in overcoming our problems than being divided and throwing stones.

  3. Mr Fox News would you care to elaborate as to why you would call people “Commie”. Nothing in the above article or the comments were remotely Commie as you put it. It would appear you just like throwing stones. If you have something constructive to say, say it and quit the unfounded name calling.

  4. Sadly the U.S.P.S.’s solvency is something that won’t be solved by this visit to Congress by some well meaning individuals. Congress has no intention of giving the service money out of its retirement system and will cite the fact that the O.M.B.’s audit came to a different conclusion.I think it is conceivable that a bailout will be needed, as was the case with Fannie Mae and Freddie Mac, two quasi-governmental corporations that insured mortgages for millions of homeowners. That would not be too bad as the leadership that has failed the service would be replaced , along with their failed business model.This may not be the “union busting” scenario people envision, as Congress would hold in place existing labor agreements and see us through to solvency.

  5. Why are they meeting with Supervisors and Postmasters rather than the professionals that can provide intelligent insight into the problems and possible solutions?

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