Updated August 29, 2011    
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Mandate is killing US Postal Service

Aug. 29, 2011 -- Rachel Freehauf, president of the North Dakota State Association of Letter Carriers, explained the truth about the Postal Service's financial plight in a letter to the editor of The Forum of Fargo-Moorhead published Aug. 27.

Mandate is killing US Postal Service

Although mail volumes are falling, it is not the Internet or even a bad economy that is killing the Postal Service.

By: Rachel Freehauf, West Fargo

The United States Postal Service has been making headlines lately and graced the Opinion and Metro pages of The Forum. The latest article stated that the agency can’t afford retirement and health benefits for its staff. Not so. The truth is that the USPS has fully funded pensions. In fact, the Office of the Inspector General and the Postal Regulatory Commission have studied and reported that the USPS has overfunded one of its pensions by $50 billion to $75 billion.

Although mail volumes are falling, it is not the Internet or even a bad economy that is killing the Postal Service. A huge congressional mandate is killing the Postal Service. The USPS is in trouble because of a 2006 congressional mandate that requires the USPS to massively prefund the cost of retiree health benefits over the next 75 years in just 10 years’ time. This cost covers not only current employees but employees who have yet to be hired – and it is on top of the cost for health benefits for current retirees.

No other company or agency in America is required by law to pre-fund future retiree health benefits. In the absence of this mandate, the Postal Service would have been profitable in the past four years, despite the worst recession in 80 years.

No rational company would choose to make pre-funding future retiree health benefits the highest corporate priority in today’s economy, and no company would use all its borrowing capacity to do so. But that is precisely what the Postal Service has been forced to do. As a result, it will soon exhaust its $15 billion borrowing authority – a line of credit established in 1970 to permit the USPS to invest in its retail and mail processing networks and to keep its huge vehicle fleet up to date.

The Postal Service and its employees don’t want a taxpayer bailout – they have not received any taxpayer funds in nearly 30 years. They want to use their own surplus pension funds to pay for pre-funding. This can only happen if Congress changes the current law.

Congress will be pivotal in the decisions about the future of the USPS. Proposed legislation exists in the House to fix this pre-funding mess and to get the USPS back on solid ground. Call your representatives and ask them to co-sponsor HR 1351.

Freehauf is North Dakota president of the National Association of Letter Carriers.

Mel Kallal, a retired rural letter carrier from Louisiana, laid out the case as well in a letter to the editor of The News Star of Monroe that also was published Aug. 27.

USPS once profitable, now on end

"Even though USPS has reduced employees more than 30 percent, most local mail (98 percent) is delivered in one day. Counter sales, letter and parcel processing and delivery are done with 200,000 fewer employees than in 2001. Increased automation will further reduce employees. Delivering the mail is not easy. Both rural and city mail carriers must deliver to 400 to 800 mailboxes, rain or shine, dodging dog bites and drivers on cellphones." Click here to read the full letter.

And larger news outlets could learn a thing or two from Rhode Island's Tom Segouros, whose column in Aug. 29's GoLocalProv asks all the right questions and displays a refreshingly keen understanding of the Postal Service's situation.

Tom Sgouros: Going Postal

"The fact is that the people who run the Postal Service are not only very familiar with email but they also understand arithmetic well enough to figure out how to support their operations. Between 2007 and the current fiscal year, the net revenue for mail operations was $611 million, and they were able to do that without using a dime of tax revenue. That is, despite the recession, despite their labor costs, despite email, and despite all the tiny post offices, USPS makes money. So why are they going broke?" Click here to read the entire column.


© National Association of Letter Carriers, AFL-CIO