White House Proposals For USPS in Deficit Reduction Plan

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From the President’s Plan for Economic Growth and Deficit Reduction

Provide Postal Service financial relief and undertake reform.

The Administration recognizes the enormous value of the U.S. Postal Service (USPS) to the Nation’s commerce and communications, as well as the urgent need for reform to ensure its future viability. USPS faces a long-term, structural operating deficit that has been exacerbated by the precipitous drop in mail volume in the last few years due to the economic crisis and the continuing shift toward electronic communication. Absent legislative intervention, USPS will be insolvent by the end of September 2011 when it will be unable to make the statutory $5.5 billion Retiree Health Benefit prefunding payment to the Office of Personnel Management, will have exhausted its cash reserves, and will have hit its cumulative statutory Treasury borrowing ceiling of $15 billion. Bold action is needed to ensure that USPS can continue to operate in the short-run and achieve viability in the longrun.
To that end, the President is proposing a comprehensive reform package that would:

1) restructure Retiree Health Benefit pre-funding in order to accelerate moving these Postal payments to an accruing cost basis and reduce near-year Postal payments;

2) provide USPS with a refund over two years of the $6.9 billion surplus in Postal contributions to the FERS program;

3) reduce USPS operating costs by giving USPS authority, which it has said it will exercise, to reduce mail delivery from six days to five days;

4) allow USPS to offer non-postal products and increase collaboration with State and local governments; and

5) give USPS the ability to better align the costs of postage with the costs of mail delivery while still operating within the current price cap, and permit USPS to seek the modest one-time increase in postage rates it proposed a year ago. These reforms would provide USPS with over $20 billion in cash relief over the next several years and in total would reduce the Federal deficit by $19 billion over 10 years.

The Administration is proposing that the employee contribution toward accruing retirement costs would increase by a total of 1.2 percent (0.4 percent a year over three years beginning in 2013), but the employee’s total pension would remain unchanged. In addition, the Administration is proposing to eliminate the FERS Annuity Supplement for new employees. While Federal agency contributions for currently accruing costs of employee pensions would decline, these employers would pay an additional amount toward unfunded liabilities of the retirement system that would leave total agency contributions unchanged over the 10-year budget window. The Administration does not anticipate this policy change will negatively affect its human capital planning and management, nor inhibit the Government’s ability to serve the American people. This proposal is estimated to save $21 billion over 10 years.

21 thoughts on “White House Proposals For USPS in Deficit Reduction Plan”

  2. Just think of the Postal Service as a host (a living organism) and it is being fed upon by the parasites( incompetent management, overtime hogs, sick lame and lazy employees, and workmans comp thieves). They will all be so surprised when the host dies because they sucked all the life out of it. So next time you see a fellow carrier soldering their mail or putting in an overtime slip the whole zone knows they don’t need, don’t just look the other way, let them know in no uncertain terms how much you appreciate them killing the host that is feeding your family. o btw if you want to fix this thing all they have to do is go to a five day delivery and evaluated routes.

  3. No offence intended to the vet carriers, but when I, a t.e., can do a route in half the time it takes them to do it, I don’t think its rite that my job is going to be the one cut. Just my 2 cents

  4. I’m not a postal employee, but am a friend and relative of three who are/were USPS employees for years. From an outsider’s point of view, I have never understood why the post office sells “non-postal products.” Why not just concentrate on the MAIL instead of bears & tote bags that no one ever buys until they’re sitting in a bin for 75% off, if then?! And most of those products are made in China or Taiwan, not the USA!!!! Wouldn’t it save a lot of Americans’ tax money, employ Americans and fund a bunch of retirements, if the USPS kept the money it spends on these items, or at least only sold things made in America?!!

  5. All you dems been saying “Republicans this” and “Teaparty that”. Well now your president has killed the unions in one fell swoop.

  6. Congratulations Obama ! You can now go and make plans for vacations since you wont have to worry about serving another term. You have put us in the worst debt and now have come up with a plan that will put more than 60 thousand workers out of a job. To bad we weren’t a bank, you would find lots of money then for executive buyouts and bonuses for CEO’s. Once again the working class gets screwed.

  7. Hey give a little get the most. What about cutting all overtime nation wide ,let all trucks leave all facilities 100 % at all times.these will cut expenditure of by 2/3 save money on contractors,fuel and turn current workers in cdl certified drivers to transport our mail.we are already on the clock.let’s be honest . Somethings gotta change to save our jobs.management stop blaming the problem on labor,concentrate on all the unnecessary waste and learn to manage effectively.

  8. Time has change, the people want Chang. I like obama finally got the nerve to do something. His plan dosent go far enough, but it’s only the begging for what is coming. the party’s over

  10. Obama disgusts me with this crap. He has shown he will not only throw supporters to the lions, but that he has no backbone. Yeah, eliminate Saturday delivery and there goes more millions in revenue. Even business majors know, if you use an excuse (saving money) today to eliminate something, in the future it will be use time and time again to say hey we only need four or three or two or even one day. This will lead to our competitors swooping in and taking over. Obama the privatizer!

  11. Obama administration officials said their plan supports retirement incentives but not layoffs, which postal unions and many Democratic lawmakers fiercely oppose.

  12. the country should be happy no more carriers walking thru there yards on saturdays, people dont bitch about 5 day delivery cause i see 4 day delivery sooner than later. usps needs to find a way to get rural carriers to work 8 hour days and this management crew is nothing more than idiots wqalking around the office looking stupid, they have not been affected by all the reductions

  13. They need to STOP giving away unneeded overtime to all the stiffs, they would save a bundle, not just in New York, nationwide!!!

  14. I figured it was a matter of time before the five day week was a reality. I would not be opposed to it if attrition took care of the displaced employees. A good early out offer would take some of the heat off the pressure to lay people off. 16 thousand city carriers could lose their jobs, and the rurals will really get hit hard with all their RCA’s, subs, and whatever. The rural system is so convoluted and weird that even after my 26 years I still haven’t figured it out, except I know it’s no damn good.
    We are perennially understaffed in my office, and carriers, like so many others are out as late or later than 7:00 on any given day, and some parts of the country they’re out even an hour or two later than that. That is no way to run a business, especially when we must cater to the business community with its parcel potential to help restructure ourselves. However, should we go to a five day, our office would have four carrier techs without routes, and we’d go through the bidding process, leaving the low four carriers unassigned. Add to that the PTF’s and TE’s, there would and should be no excuse for any regular carrier to have to work over eight hours any time, even after a weekend holiday.
    In return for giving management the five day week, the NALC should demand that collective bargaining remain intact with no changes, and demand that Article 8 be reworded to say that no regular carrier shall work overtime ever, regardless of the situation, and will have the power and right to refuse to do so. Only those who sign an ODL would ever be utilized for overtime duty.
    That goes without saying that the JARAC teams will adjust the routes to be real eight hour routes, not the fucking joke it is now. My route is officially one hour and twenty minutes out of adjustment. That should never happen.
    But I’m not the boss, and we know management and sadly, the union for the most part, really couldn’t care less what we think. It’s a sad situation.

  15. I am shocked with the news the president has backed 5 day delivery. I am a local president of a smallish branch and have been hearing for years now from national.. give to colcep, call your congressman, write your senator and in this state they are all on board with us. Then the one guy we have to have, the most important guy, the only one that really matters gives us up….How could our national officers not know about this how could they let this happen how could they ask us to believe in them and they can’t even get the One Guy we needed most to save the jobs. I am now questioning all the time and money I’ve contributed to “the cause” as well as my dedicvation to the Union for which I have served a majority of my career.

  16. Wow i thought they were trying to create jobs not destroy them now what happens to the floaters and ptf’s and businesses that rely on saturday delivery? talk about putting a nail in the coffin!

  20. It is obvious any sane solution to the current postal crisis needs to see
    a reduction in postal employees and a way to increase postal revenues.
    a decent buyout offer seems logical as far as reducing head count. the postal service has created such a polluted work enviroment many employees would like to leave but are holding out for a little something in return. as far as the increase in postal revenues, that is a tougher tiger to tame, but a neccessary one. the knuckleheads and cronies that manage the postal service
    are going to have to step up to the plate on this one and i honestly don’t think they have the business sense and brain power to get this accomplished. too many of these bureaucrats have little or no business sense and this will not change.
    they have bureaucratic skills which got them their jobs , but have little
    or no “real world” business sense that is needed to operate efficiently and GROW THE BUSINESS. when is the last time you saw these bureaucrats introduce a new
    product or service that the public actually wanted? when is the last time you saw these knuckleheads improve customer service with their policies and decisions. they treat the customer like an annoyance and many customers have left for
    other alternatives that treat them better or at least appreciate their business. but,
    postal management is accountable to no one or at least that is how i see it . these postal managers/bureaucrats pull down huge salaries but it dosen’t appear congress or anyone else can or will hold them accountable for their conduct in
    “managing” or mismanaging the united states postal service.

  21. Well, it still has to get by the rest of the government boys before it becomes a reality i think. Never thought management would get the 5-day delivery, but there it is. Alot of businesses are going to be unhappy about that. Hopefully the President just threw that part in so that when it comes to negotiating and debates he can ‘allow’ that part to be cut out to get the rest (i’ve never understood modern day negotiating tactics that require you to come to the table with a list of a few wanted things and a whole lot of expendable fluff).

    Didn’t think i’d see a refund happen either. The Republicans will call it a ‘bailout’ of course. Would’ve been better just to take all the overpayments in the F AND C accounts and shift the money over to the pre-funding account and just be done with it (or at least most of it). That would probably pay off the whole thing.

    Non-postal products? That could mean a WHOLE lot of things. Ranging from the subtle to the extreme to the trendy.

    And it seems i’m destined to take a slight pay hit on my check. 🙁

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