APWU Denounces Five-Day Mail Delivery, Urges Congress to Correct Pre-Funding Requirement

In testimony submitted to a Senate subcommittee March 18, APWU President William Burrus denounced Postal Service plans to eliminate Saturday mail delivery, and urged Congress instead to correct two major causes of USPS financial difficulties: A provision of the 2006 Postal Accountability and Enhancement Act (PAEA) that requires the agency to pre-fund retiree healthcare costs, and a flawed method for computing USPS obligations to the Civil Service Retirement Fund.

“The PAEA has forced the Postal Service virtually into insolvency,” Burrus said. It imposed a $75 billion obligation that is not borne by any other federal agency — including Congress, he noted.

“This requirement, more than any other single factor, has created a USPS deficit of alarming size. A 2008 GAO report found the USPS’s $5.3 billion shortfall in FY 2007 was caused primarily by this provision of the PAEA,” Burrus said.

When Congress approved PAEA legislation in 2006, supporters said the law would provide the USPS with “tools and mechanisms to help ensure efficiency, flexibility, and financial strength, the union president observed. “However, the law has had the opposite effect.”

Burrus urged lawmakers to rescind the pre-funding provision of the PAEA. Doing so, he said, would make the elimination of Saturday mail delivery unnecessary.

“Absent this pre-funding burden, the Postal Service would have experienced a cumulative surplus of $3.7 billion over the last three fiscal years, despite declining mail volume, an economy in chaos, and electronic diversion.”

Burrus also urged Congress to give serious consideration to the USPS Office of Inspector General’s recent findings that the methodology for determining the Postal Service’s contribution to the Civil Service Retirement and Disability Trust Fund is flawed. The improper allocation of liabilities resulted in an overpayment of $75 billion, the OIG found.

“A more equitable allocation of pension liabilities would offer the USPS stability,” Burrus said, “which could delay any reduction in the number of mail delivery days and other policies that would undermine its ability to provide universal service at uniform rates to American citizens.”

The union president also challenged USPS projections that it would experience a $238 billion deficit over the next 10 years. “Frankly, these predictions are outlandish and unsupported. The USPS has offered no justification for these wild claims, and, unfortunately, the media has failed to challenge them.”

“The rush to five-day mail delivery is an ill-conceived reaction to declining mail volume during an economic slowdown,” he concluded. “While volume may never return to 2006 levels, even a modest return, coupled with repeal of the requirement to pre-fund retiree health benefits, would go a long way toward sustaining the Postal Service for many years into the future.”