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USPS: Is Congress trying to destroy it? Or just its union?

Yesterday NPR's Tell Me More had a segment on the postal service, the planned closings, and the planned layoffs.

The following comments from the transcript (at link above) provide in a nutshell what has caused the current financial problems, how they could be remedied, and, alas, show perhaps a hidden agenda on the part of Congress in imposing this pension burden on the US Post Office. Union breaking, anyone? Oh, and the Post Office has been running a profit? Right through the current Great Recession and Jobs Depression.

MAINOR (executive vice president for a local branch of the National Association of Letter Carriers, a union that represents postal workers in North Carolina): OK. First of all, Tony, in 2006, Congress mandated the postal service to prefund future health care retirees' benefits for 75 years and to do so within 10 years. And if you look at the bottom line, the post office actually had a net operating revenue without this onerous burden, which amounts to seven to ten percent of our budget each year.

And additionally, the postal service has overpaid both retirement accounts for FERS and civil service retirements anywhere from 50 to 70 billion dollars. And we're just asking Congress - we're not asking to pay the money back to us. Just give us credit for that money and if you go back to 2006, this has only been a problem since 2006, since the Postal Act that created this burden on us to pay $5.5 billion per year off the top to fund future retirees' benefit plan.

COX (guest host): Philip, let me bring the last question to you because our time is run out. Where do you see the future of the post office, briefly, five years from today?

RUBIO (assistant professor of history at North Carolina A&T University and a former postal worker): Well, the post office has got to get through these scare tactics that unnecessarily are laying people off or proposing laying people off, essentially, breaking the union by getting rid of the no layoff clause and eliminating health care benefits and switching to cheaper plans.

Closing post offices - I know people are upset about that all over the country. I think it's going to take a lot of people waking up and getting the facts.

Just to piggyback on what Jimmy said, a lot of people don't know - some don't want to know - that the post office has actually turned a profit in the last four years, even through the recession, so it's only those prefund mandates that Jimmy talked about that cause the post office to be so far in the hole, because otherwise, they've turned a profit of $837 million in the last four years, $226 million in the last quarter.

Now, that's not a hefty sum, you could say, but the post office's mission is universal service and to be self-supporting. It could do that if legislation went through Congress right now.

Stephen Lynch, the Democrat from Massachusetts, has proposed that HR1351 that would allow the post office to use surplus from its pension plans to prefund those benefits and not have to take it out of operating expenses because the post office actually still is a going concern. It's a myth that it's a dinosaur and that it should inevitably fall apart. (My emphasis)

For all its faults, NPR still covers important information which is hard to find elsewhere on the MCM (Mainstream Corporate Media).

I would appreciate input from anyone who knows more about the FERS contributions Mainor mentions. Is this another example of directed payment perhaps being used to permit those big tax cuts to the Top One Percenters, which go mainly to the Zero Dot One Percenters?

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Andre's picture
Submitted by Andre on

And I think it's a bit of a reach for any local official of the NALC to say that the USPS turned a profit in any particular recent quarter or year. You can read what the National President of the NALC said here:

FERS was started in 1987 to bring federal pensions under Social Security to a point. If you were hired after a certain date, you were mandated to go into FERS. I'm in CSRS (Civil Service Retirement System) which is heavily overfunded. What I find interesting about this is that 6 % of the national debt is held by the CSRS Trust Fund, while 18 % is held by the Social Security Trust Fund, so that's a three to one ratio, which seems grossly out of line. I can't imagine that there are only three times as many people paying into Social Security as paid into CSRS.

Also, I don't think this just started in 2006, 2007, I think it started with Clinton in 1996, and maybe just off the top of my head, it's one of the ways he used to develop that often talked about surplus: he required the CSRS to hand over much more money than was anywhere necessary.

Submitted by jawbone on

maybe not a profit per se? But the point seems to be that without having to pay so much into its pension fund, the USPS is managing its job of serving all the nation without the huge losses often cites.

The bit about Bill Clinton Oh, no, Mr. Bill! kind of thing.... Accounting tricks?

Thanks for the info.

Andre's picture
Submitted by Andre on

jawbone, but I think the USPS is in some serious financial problems now, and from what they say is caused by the internet and other things, is primarily from the internet (unfortunate because the USPS does a lot of things far better than can be done online). The other things they've always had and have done quite well handling those things, even with their figurative hands tied behind their backs by the Feds.

As for plots to destroy the USPS, I don't think their quite hidden. UPS, Fedex and the other carriers have had it in for the USPS forever. They always have imput into any legislation covering the USPS, one of the problem causing 'other things'. They pretty much have the second corporate goal ("handicapping the competition") covered in reference to the USPS. Of course if they succeed, the cost of mailing things will be at their discretion.

As for the destruction of the Postal Unions (which are quite large), there are a lot of pols who would like to hang one of those heads over the mantle, but the Postal Union people are workplace warriors and know how to fight. Unfortunately the people who would like to destroy them are cowards (the reason they're so opposed to collective bargaining) and will probably attempt it behind the scenes with lots of little cuts.

As for Clinton, I was one of many asked to implement that mandate in 1996, prefunding of future retirements, something I think the USPS had never been asked to do in its 200 years. We took on the mandate, unaware that the amount might just be a bit too much. At the time we called it a stamp tax. And I think at this point it was.

I think the goal of Obama and whoever else you want to mention, to partially solve the deficit problem is to not pay back the monies it borrowed from the CSRS, SS, and Military Retirement. The easiest would be the CSRS. I don't think this is something that is going to happen, I think it was already started in 1996 when that huge prefunding mandate was put into law. And slick Willie was president then! And these defaults would thus become taxes on the working people who have paid into those trust funds.