A tentative agreement between the U.S. Postal Service and one of its largest labor unions should save the post office about $3.8 billion in the next four years — but that’s not enough for House Republicans who are hoping to learn more about the deal on Tuesday.
At issue is a tentative deal between USPS and the American Postal Workers Union, which represents more than 220,000 postal clerks, mechanics, truck drivers and administrative personnel. Union members have until May 10 to ratify a deal that freezes salaries for two years and will require them to pay a higher percentage of their health-care costs by 2016, when the deal would expire.
Rep. Darrell Issa (R-Calif.), who chairs the House Oversight and Government Reform Committee (which has primary jurisdiction over postal affairs), has called the agreement “a missed opportunity” and is trying to determine whether USPS could have fought for greater savings.
Leaders of other postal unions will nervously watch from the sidelines, eager to see whether the new political focus, coupled with sustained economic uncertainty, could spoil their chances of successful negotiations with the mail agency in forthcoming talks.
The deal “is in the best interest of our workers, the Postal Service, the mailing industry and most importantly our customers,” Postmaster General Patrick R. Donahoe said Monday in a meeting with reporters to preview his testimony.
“This agreement continues to allow us to take costs out while still providing quality service to the American public,” Donahoe said, noting the post office has already cut the equivalent of 135,000 full-time jobs in the last three years.
Donahoe also said USPS earned significant concessions from APWU: Besides lower health-care costs, the mail agency also will be able to set more flexible work schedules and hire more part-time workers.
APWU President Cliff Guffey will tell lawmakers Tuesday that the deal will help USPS address its longer-term financial problems, according to his prepared testimony. Though his members would pay more for health-care, the union earned a key concession in the deal when USPS agreed to curtail its use of excessing — or relocating workers to faraway locations in order to keep their job.
Even if the agreement is ratified, about 80 percent of the Postal Service’s costs would still be tied to labor — for wages and benefits primarily. But Donahoe said the Postal Service would pay less actual money as it downsizes and reduces costs.
Still, Issa wonders if more could be saved: “For the past several years, USPS has been on the brink of insolvency,” he said Monday. “Immediate structural reforms and cost-cutting measures are imperative.”
Issa said the committee hopes to keep working with USPS to ensure its viability “without the need for taxpayer bailouts or the use of budget gimmicks to hide the real crisis.”
Union leaders aren’t buying it, with some privately griping that Issa is attempting to score political points by rattling labor unions — or, to do Washington's version of what GOP governors are doing to state worker unions in Wisconsin, Ohio and elsewhere.
Fredric V. Rolando, president of the National Association of Letter Carriers, said Monday that Congress “should avoid interfering with contract negotiations that demonstrably aren’t the problem in the first place.” Rolando, whose union is scheduled to start negotiating a new deal with USPS in August, believes lawmakers should instead focus on repealing a 2006 law requiring the Postal Service to prepay future retiree health benefits. The charge totals about $5 billion annually and, if eliminated, would allow the Postal Service to earn a profit, Rolando said.
“Assuming Congress does its part to resolve the immediate problem, the postal unions and the Postal Service can and will do what is necessary to secure the long-term viability of the Postal Service by providing new services and finding new and better ways to deliver existing services,” Rolando said. His union would prefer that USPS transfer money it’s paid to the federal civil service retirement accounts to cover those future retiree costs.
Donahoe may also get questions Tuesday about his plans to accelerate the process of closing post offices and his continued push to end Saturday mail deliveries. The Saturday mail cuts can happen quickly — likely within six months — “If Congress give us the OK,” he said.
But Issa and his colleagues won’t commit to any reforms until they're satisfied they’ve learned everything they need to know. Whether Tuesday’s hearing gives them enough comfort could be critical — remember that the longer Congress waits, the closer USPS is to running out of money.
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