Postal Service Default: A Congressionally-Manufactured Crisis

 (This article first appeared in the September/October 2012 issue of The American Postal Worker magazine)?

The Postal Service’s default on a $5.5 billion payment to the U.S. Treasury on Aug. 1 — and an expected default on Sept. 30 — is the result of a congressionally-manufactured crisis that could have been avoided, the APWU charged over the summer.

Although the August default hasn’t had immediate consequences for mail delivery or on employees’ pay, the Postal Service’s precarious financial situation is forcing the agency to scale back overnight mail delivery, close half of the nation’s mail processing centers, and slash hours at post offices, APWU President Cliff Guffey pointed out. And businesses, communities and individual customers are bracing for more severe cuts in the months ahead.

When the USPS misses a $5.6 billion payment on Sept. 30, it will draw more negative attention to the Postal Service — and many of the pronouncements will be misleading or downright inaccurate, he warned. “Already there have been editorials calling for drastic cutbacks and privatization,” he noted. “Most of these misguided editorials fail to recognize the cause of the Postal Service’s financial difficulties, so they can’t possibly advocate a reasonable solution.”

“It doesn’t have to be this way,” Guffey said. “Despite what some would have us believe, the Internet is not killing the Postal Service — and neither are costs associated with postal operations. In fact, the USPS continues to be an engine that drives our economy.”

The primary source of USPS financial difficulties is a 2006 law — the Postal Accountability and Enhancement Act – that requires the Postal Service to pre-fund retiree health benefits 75 years into the future, and to do so in a 10-year period. No other government agency or private company bears this crushing burden. Since it was implemented in 2007, it has drained the Postal Service of more than $20 billion.

“These payments — not the Internet and not losses from postal operations — are responsible for 82 percent of USPS red ink since the law was implemented,” Guffey said.

“The postal debacle is a manufactured crisis, and it is being exploited by those who want to privatize the Postal Service,” he said. “The House Republican leadership’s bill to ‘fix’ the Postal Service couldn’t be clearer.”

H.R. 2309, which was introduced by Rep. Darrell Issa (R-CA), would require the USPS to close hundreds of plants, shut tens of thousands of rural post offices, end Saturday delivery, and empower a financial control board to tear up union contracts. “It would destroy the Postal Service as we know it,” Guffey said.

“The bill is so bad — as APWU members and others have shown — that House Republican leaders are reluctant to bring it up for a vote before the election,” Guffey added.

“Rep. Issa’s bill will not save the Postal Service; it would ensure its demise. Yet, with typical twisted logic, Rep. Issa portrays attempts to correct the pre-funding fiasco as a ‘bailout,’” Guffey said.

“Clearly, the Postal Service must innovate to adapt to the digital age,” he added. “But the Postal Service cannot modernize while it is struggling to survive this crisis.”

“House GOP leaders are abandoning you — and their responsibility to address the USPS crisis,” Guffey said. “Their failure demonstrates once again how crucial it is to change the political dynamic in our country. APWU members must help wrest control of the House from extremists who seek to destroy the USPS. Union members must vote in November, and they must be actively involved in the run-up to the election encouraging their families, friends and neighbors to do the same.”