“These work hour reductions reflect our efforts to improve productivity and to respond to the decline in mail volume. Since 2000, we have reduced work hours by a cumulative total of 504 million work hours, equivalent to 286,000 employees, or $21 billion in expense savings each year.”
It is only appropriate that Congress act to solve a postal financial crisis that legislators had a big hand in creating. More than $11 billion of the $15.9 billion loss, by far the biggest chunk, comes from required payments to pre-fund retiree health benefits. These payments are unique to the Postal Service, and they have nothing to do with mail delivery. USPS has defaulted twice on those payments since August. Without those payments, the net loss would have been $2.5 billion, not good, but more manageable.
Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. Davidson previously was an assistant city editor at The Washington Post and a Washington and foreign correspondent with The Wall Street Journal, where he covered federal agencies and political campaigns.
“The 2006 congressional mandate that the Postal Service – alone among all agencies and companies in the country — pre-fund future retiree health benefits accounts for 80 percent of all Postal Service red ink, including $11.1 billion in 2012,” said Fredric Rolando, president of the National Association of Letter Carriers.
“The mandate has depleted Postal Service funds, forcing the USPS to give up any quarterly or annual profits, empty its bank accounts and exhaust its borrowing authority — not to modernize its vehicle fleet but rather to satisfy an unfair political mandate,” he added. “Without pre-funding, the Postal Service would have tens of billions of dollars in the bank, a full line of credit, and would be able to focus on the transitions required by an evolving society.”
It’s not only members of Rolando’s union and other postal workers who would suffer if USPS finances are not set right soon, according to an organization that represents business mailing associations and companies.
“If Congress fails to act,” said Art Sackler, co-coordinator of the Coalition for a 21st Century Postal Service, “there could be postal slowdowns or shutdowns that would have catastrophic consequences for the 8 million private-sector workers whose jobs depend on the mail.”
Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.