NALC Statement on the August 1st Postal Service “Default”

WASHINGTON, July 30, 2012 /PRNewswire-USNewswire/ — The pending August 1st “default” of the U.S. Postal Service is not primarily the result of a bad market or even bad operations, but of bad legislating by Congress. The only thing that will happen on Wednesday is that the Postal Service will not pay $5.6 billion into a fund for futureretiree health benefits — a fund that already has $45 billion, enough to pay for decades of future retiree health care.

At the National Association of Letter Carriers (NALC), our two highest priorities are ensuring the long-term health of the Postal Service and protecting the well being of our country’s active and retired letter carriers. If we thought our retired members were in danger of losing their health care, we’d be screaming bloody murder about it. But the retirees are fine and so is their health insurance. And on August 1st, the mail will continue to be delivered and employees will continue to be paid.

No other U.S. institution — private or government — is required by law to set aside money for future retiree health benefits. But in 2006, Congress imposed this requirement on the Postal Service, and the resulting annual payments are the reason the Postal Service’s financial problems, while very real, appear to be so much worse than they actually are. In fact, according to USPS financial statements, pre-funding accounts for 94 percent of the red ink in the first two quarters of fiscal 2012 and 85 percent of all red ink since pre-funding went into effect in 2007.

Still, this bogus “default” has proved to be useful rhetoric to those who want to dismantle the Postal Service, especially those who for ideological or competitive reasons want it privatized. But we should all remember: the Postal Service doesn’t use any taxpayer money.

As we have said before, the Postal Service does have very real challenges to address as the volume of first class mail declines and Americans rely more and more on the Internet to convey personal and business messages. On the other hand, there is real opportunity as an increasing number of products purchased online are shipped through the Postal Service.

Because of the panic that results each time the Postal Service must find funds to make the annual pre-funding payments, postal management has become more focused on cutting service than on developing a coherent business plan for the future.

And Congress has failed to deal with the unfair and unaffordable financial burden of pre-funding, which is the one thing that could provide the Postal Service some much-needed breathing room to address its long-term challenges in a strategic way.  Some in Congress — it seems —would rather cut key services to Americans than give the Postal Service a real chance to thrive in the 21st century.

In short, Wednesday’s default won’t be committed by the Postal Service, but by Congress.

5 thoughts on “NALC Statement on the August 1st Postal Service “Default”

  1. Hey stevieg, get a clue. The losses this year already have factored in the pre-payments. THAT IS MOST OF IT!!! PAY ATTENTION!!

  2. 6 day street delivery is a waste. A recent poll showed 7 out of 10 Americans favor no Sat. delivery and see this as one means of reducing millions of dollar losses. Mail delivery on Sat. serves no purpose in Americans communicating as instant messaging via internet, I Pods, smart phones, tablets, androids is the primary means used to communicate. Mail delivery is used to distribute advertising sale papers known as junk mail. Social security and other treasury checks will be direct deposit MARCH 2013. Why continue to waste money delivering sale ads on SAT. . Massive reduction in carrier work hours and vehicland fuel cost would create massive savings with no negative impacts.

  3. lets do the math people. we have lost 10.1 billion so far this year. We owe 5 billion tomorrow. That means we will be losing 15 billion so far this year. When are you people going to get through your heads that we are losing all this money because of people using 21st century technology. Example, the internet. We deliver mostly junk which does not pay the bills like first class used to. It’s time the union got its head out of the sand and instead of fighting a losing battle, and living in a world that no longer exists, work with management and figure out how to fix the problem.

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