Sen. Carper: USPS Financial Losses Underscore Urgent Need for House to Act on Postal Reform Legislation
Filed under: Congress, postal, postal news, postal reform, press releases, usps
WASHINGTON – Today, Sen. Tom Carper (D-Del.), chairman of the Senate subcommittee that oversees the U.S. Postal Service, released the following reaction to the announcement that the U.S. Postal Service lost $3.2 billion in the second quarter of fiscal year 2012:
“Today’s announcement that the U.S. Postal Service lost $3.2 billion in the second quarter of fiscal year 2012 shouldn’t come as a surprise to anyone. This comes on the heels of several years of steep losses, including a $3.3 billion loss just last quarter, which historically is the Postal Service’s strongest financial quarter. The Postal Service can’t afford to continue hemorrhaging money like this and Congress can’t stand idly by and allow it to continue to creep towards collapse. The Postal Service supports a trillion dollar mailing industry and over eight million jobs. At a time when we’re fighting to create jobs and grow our economy, allowing the Postal Service to go under is simply not an option. As I have said time and time again, this is a dire situation but it is not hopeless – it does, however, require quick action from Congress to solve the problem. While the Postal Service is moving forward under its current authorities with some stopgap, piecemeal efforts to reduce costs, these measures don’t even begin to address the serious financial crisis facing this American institution. The reality is that Congress must pass comprehensive postal reform legislation to provide the Postal Service with the tools and resources it needs to not just survive in the 21st century, but to thrive. The Senate responded to this need for action by passing the bipartisan 21st Century Postal Service Act (S.1789) last month. While that legislation is not perfect, it includes meaningful reforms that respond to the Postal Service’s financial woes. Now the House must do its part and pass its own version of postal reform legislation. Every day that the House delays, the Postal Service loses $25 million. We can’t afford to wait any longer. It is my hope that the House will soon announce its plans for action so that Congress and the Administration can come together on a plan in to save the Postal Service before it’s too late.”
APWU Urges House: Address Postal Reform Now, Start With Senate Bill
APWU News Bulletin 13-2012, May 10, 2012
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As the May 15 expiration of a moratorium on the closure of post offices and mail processing facilities approaches, the APWU is urging the House of Representatives to address postal reform immediately, and to use the Senate bill as a starting point. The USPS’ May 9 announcement about keeping rural offices open isn’t binding and won’t solve the USPS financial crisis, so we must keep fighting, the union says.
The attention of lawmakers, postal workers and customers shifted to the House after the Senate passed a bi-partisan postal bill (S. 1789) on April 25, but, so far, House leaders have displayed no sense of urgency in addressing the issue. As CNN Money reported on April 27, “Aides say Republican leaders don’t feel pressured to take up the House bill right away, because they’re not worried about postal closures.”
But the union, postal customers and many legislators see things differently. “We cannot allow legislative inaction to force the USPS to implement drastic cuts that will destroy the nation’s mail system, damage service, and jeopardize tens of thousands of jobs,” said APWU President Cliff Guffey.
“I encourage all union members to contact their representatives and urge them to consider postal reform legislation immediately. Be sure to ask them to use the Senate bill as a starting point,” he said.
The Senate Bill
“The Senate bill is flawed,” Guffey said, “but it is much better than an earlier version — and it is infinitely better than the bill that was approved by a House Committee last year.
“The improvements to the Senate bill are the result of the efforts of postal workers, customers, and legislators who recognize the importance of the USPS to American life — and have fought to protect it,” he said. “We now must apply the same determination to the House.” Read more
APWU Statement on USPS Announcement About Rural Post Offices
The APWU is continuing to analyze the Postal Service’s May 9 announcement that it will allow rural post offices to remain open, but with reduced hours.
“We support efforts to preserve service to the American people,” said APWU President Cliff Guffey. “In fact, we believe the long-term survival of the Postal Service depends on expanding service and offering new products.
“We applaud the proposal to allow greater community input on rural postal services and to keep offices open, but we are disappointed by the decision to reduce hours at these offices.
“The outpouring of interest in USPS plans demonstrates the importance of the Postal Service to our nation. It also demonstrates the importance of maintaining the service standards the American people have come to expect.
“Unfortunately, the Postal Service’s latest plan will not solve the USPS financial crisis, and it is important to note that 223 mail processing facilities remain in jeopardy.
“Only Congress can restore financial stability to the USPS by relieving the agency of the unreasonable requirement to pre-fund 75 years worth of healthcare benefits for future retirees in a 10-year period.
“It is imperative that the House act quickly to consider postal reform. We believe the appropriate starting point for discussion is the bill that was approved by the Senate on April 25.
“We urge House leaders to begin debate on the Senate bill.”
NALC: USPS reports that pre-funding accounts for $6.2B of the $6.5B in red ink.
Statement from NALC President Fredric Rolando about the Postal Service’s financial situation
May 10, 2012 — Today’s U.S. Postal Service’s announcement about the most recent fiscal quarter reinforces our view of the financial situation facing the USPS and how it can be fixed.
The Postal Service reports that 96 percent of its losses – $3.05 billion out of $3.18 billion – have nothing to do with mail delivery expenses, but rather result from an external political mandate. Since 2007, Congress has compelled the Postal Service to pre-fund future retiree health benefits for 75 years into the future, an obligation that will cost the USPS $11 billion this year. No other public agency or private company in the country is compelled to pre-fund.
Today’s report follows on last quarter’s financial statement by the Postal Service, which also showed that in operational terms the Postal Service is doing quite well – in fact last quarter there was a $200 million profit delivering the mail, with pre-funding accounting for all the losses.
The Postal Service’s own data shows that the first thing Congress needs to do is address this artificial political burden that is driving almost all the red ink. For the first half of this fiscal year, the USPS reports that pre-funding accounts for $6.2 billion of the $6.5 billion in red ink.
It would be absurd to start to dismantle the universal network and degrade service to the American people and America’s businesses – when almost all of the red ink has nothing to do with the costs of those services but stems directly from a burden that Congress imposed and Congress could fix overnight.
The service reductions called for in the Senate bill, and the worse ones called for in the House bill, would not fix the actual financial drain on the Postal Service. Rather, they would worsen things by driving customers away and reducing revenue.
We acknowledge that a thoughtful restructuring of the Postal Service is needed to adapt to the country’s changing needs. For 200 years, the USPS has adapted to an evolving society. Neither of the bills before Congress provides for such a thoughtful or constructive approach.
The Postal Service’s own figures and statement shows that the major cause of the financial problems is not – despite the conventional wisdom – Internet competition. In fact, the USPS today, as last quarter, cited a sharp rise in the shipping of packages ordered online as contributing to the good operational performance. That bodes well for the future, because that part of the business will continue to grow. If Congress will step up and fix the pre-funding problem it created, the USPS can focus on taking full advantage of this and other opportunities to better serve the public.
For 30 years, the Postal Service has not used a dime of taxpayer money, while providing the world’s most efficient and most affordable delivery service.
USPS Ends FY Second Quarter With $3.2 Billion Lost – YTD $6.5 Billion
According to USPS
The Postal Service continues to suffer from a severe lack of liquidity caused by over $25 billion of
cumulative net losses in the past five fiscal years which included $21 billion of Congressionally-mandated payments for prefunding retiree health benefits. During those five years, the Postal Service’s debt has increased by nearly $11 billion to finance the losses and prefunding payments.
The trend of losses continues this year as the Postal Service had net losses of $3,177 million and $6,464 million for the three and six months ended March 31, 2012. In addition, it had $818 million of total cash and $2.1 billion of remaining borrowing capacity on its $15 billion debt facility at March 31, 2012.
Current financial projections indicate that the Postal Service will not be able to make the required $5.5 billion prefunding payment for retiree health benefits currently due by August 1, 2012, or the required $5.6 billion prefunding payment for retiree health benefits that is due by September 30, 2012. Additionally, even without making the $11.1 billion of scheduled Postal Service Retiree Health Benefit Fund (PSRHBF) payments in the fourth quarter of 2012, current projections indicate that the Postal Service will have a precariously low level of cash and liquidity at September 30, 2012. This position will worsen in October of 2012, when the Postal Service is required to make its annual payment of approximately $1.3 billion to the Department of Labor (DOL) for workers’ compensation, in addition to paying its normal operating expenses.
Here is USPS press release
| WASHINGTON— The Postal Service ended its second quarter (Jan. 1 – March 31) with a net loss of $3.2 billion, compared to a net loss of $2.2 billion for the same period last year. Despite ongoing management actions that have grown and improved efficiency, the losses will continue until key provisions of the Postal Service five-year business plan move forward.
Without the impact of the non-controllable costs related to mandated retiree health benefit pre-funding payments and accounting for non-cash adjustments for worker’s compensation, the non-GAAP loss for the quarter was $486 million compared to $469 million for the same period last year as shown in Table I below. Read more |
Senator Jay Rockefeller Statement On New Postal Plan To Limit Hours At Post Offices
Filed under: politics, post office closings, postal, postal news, press releases
WASHINGTON, D.C. — Senator Jay Rockefeller today issued the following statement on the U.S. Postal Service’s decision to reduce hours at 13,000 post offices nationwide, and almost 500 in West Virginia.
“On its face, this move looks like an improvement over the previous proposal to flat out close 150 post offices in West Virginia,” said Rockefeller. “But I continue to be very concerned about the Postal Service’s constantly shifting plans and lack of information about how its proposals will impact jobs and services in our state. This new plan will potentially impact far more West Virginians and it fails to take into account the many other options for reducing costs besides cutting postal jobs and services in rural areas like West Virginia.
“The Postal Service must fix its worsening finances, but it doesn’t have do that at the expense of our state’s jobs and services. We need to take responsible steps forward and I intend to have a very candid conversation about this with the Postmaster General during our meeting tomorrow.”
On May 7, Rockefeller sent a letter to the Postmaster General urging the Postal Service to reconsider closing 150 post offices and consolidating mail processing centers in West Virginia as these actions unfairly target jobs and postal services in West Virginia, as well as other rural states. He also asked the Postmaster General to extend the current moratorium on any post office closings and mail processing center consolidations in the state. Click here to view the letter.
On March 20, Rockefeller, Manchin, and five other Senators sent a strongly worded letter to the Postmaster General pressing for details about how the Postal Service is spending its money and identified ways to save billions of dollars and raise new revenue before pushing ahead with drastic cuts to post offices and other facilities. Click here to view the letter.
USPS, APWU Agreement Upgrades Level 6 Maintenance Support Clerks, Updates Staffing
APWU Web News Article 55-2012, May 9, 2012
The APWU and USPS have reached an agreement that upgrades Level 6 Maintenance Support Clerk (MSC) positions one level and updates the staffing criterion for the position, Maintenance Director Steve Raymer has announced. The May 9 agreement [PDF] was reached as a result of the union’s protest of the Postal Service’s Oct. 27, 2011, notice of proposed changes to administrative staffing positions under Maintenance Management Order (MMO) 074-00 [PDF]. The Postal Service planned to overhaul the staffing chart based on an extensive survey and review of the duties and responsibilities of MSCs and the impact of technology on the position.
“The issues were fully discussed among all national Maintenance Craft officers, both headquarters officers and NBAs,” Raymer said. “We decided that resolving the matter would better serve our members than a protracted dispute. If we had chosen the latter course of action, the Postal Service would have unilaterally implemented the staffing changes, which would have had immediate and lasting negative effects on members holding MSC duty assignments. In the end, we believe the protections and gains we made warranted an agreement.”
The agreement provides that on the first day of the pay period immediately following issuance of MMO 057-12, all Level 6 MSC members will be upgraded one pay level. The upgrade will be implemented without any reposting of positions or other impact on the duty assignment, Raymer said. Read more
Senator Sanders: Good News, Bad News in New Postal Plan
Filed under: politics, post office closings, postal, postal news, usps
All Rural Post Office Saved, but Hours of Operation Cut
WASHINGTON, May 9 – Sen. Bernie Sanders (I-Vt.) today welcomed Postmaster General Patrick Donahoe’s decision to abandon plans to close 3,600 rural post offices, including 15 in Vermont, but voiced reservations about a new plan to cut hours of operation.
Sanders called on the House to pass a Postal Service reform bill that a bipartisan majority of senators approved on April 25.
He said he is increasingly confident that many postal sorting facilities once slated for shutdowns will be spared, including one at White River Junction, Vt.
But he questioned aspects of Donahoe’s new plan, announced earlier today, to cut hours of operation at 13,000 post offices, including 145 in Vermont. Read more
Senator Carper Reacts to PMG’s Announcement on Cost-Cutting Measures for USPS
WASHINGTON – Today, Sen. Tom Carper (D-Del.), chairman of the subcommittee that oversees the U.S. Postal Service and co-author of the 21st Century Postal Service Act, released the following statement reacting to the Postmaster General’s announcement that the Postal Service would seek to reduce operating hours at post offices across the country and offer retirement incentives to postal employees:
“I am glad that many of the ideas presented today by the Postmaster General track closely with those included in the Senate bill, the 21st Century Postal Service Act, which I co-authored and which passed the Senate on a bipartisan vote in April. The Postal Service’s plan gives local communities a voice in ensuring that essential postal services are preserved by allowing them to select from a menu of service options while still allowing the Postal Service to reduce costs. It also encourages eligible postal employees to retire, saving additional money for the Postal Service. This proposal allows the Postal Service to move forward with some cost saving efforts by utilizing tools it currently has access to, but the reality is that the Postal Service is forced to rely on a limited toolbox because Congress has yet to pass comprehensive, long-term reform to give the Postal Service the resources and flexibility it needs to significantly address its financial challenges.
“Stopgap, piecemeal measures like the proposal offered today only address a small part of the problem and will not keep the Postal Service from an imminent collapse. This plan does not address some serious issues that continue to drain the Postal Service’s finances every day, including its costly retiree health care payments and past overpayments to the Federal Employee Retirement System – which total nearly $11 billion. Moreover, this solution doesn’t go far enough to encourage a responsible reduction in its workforce.
“The Postal Service needs a comprehensive solution, not more tinkering around the edges. The Senate passed a comprehensive bill that would modernize the Postal Service, allowing it to right-size and become competitive in the 21st century. Now, it’s up to the House to pass a bill. We can’t wait any longer.”
PMG Announces POStPlan at Media Briefing
As you are aware, this morning, Postmaster General Pat Donahoe and Chief Operating Officer Megan Brennan held a press conference regarding the Postal Service’s plan to keep rural post offices open while addressing the declining mail volumes and declining revenue. This new program is called the POStPlan which stands for Post Office Structure Plan.
This plan will impact over 13,000 offices. Currently, 9,500 of these offices are served by an incumbent Postmaster. Congress is considering over 25 bills to protect rural post offices but, unfortunately none protect Postmasters. Read more