Federal Employees News Digest

Postal unions react against Treasury report on USPS

The United States Postal Service and its hundreds of thousands of employees have been frequently reprimanded over this past decade—coming under fire, especially, for negative financials—all the while also suffering the pressures of reductions and restructurings.

Yet, defenders consistently point out that most red ink at USPS actually has been generated by billions of dollars of congressionally-mandated—and arguably excessive—required payments toward prefunding future retiree health care costs.   

The Trump administration has thrown its weight around here, behind the sprawling organization’s critics—pushing employees and their unions to be more vocal in their own defense.

And lately, the bashing from the administration continues. In April of this year, the White House created a “Task Force on the United States Postal System.” Now, as 2018 ends, that panel has released its recommendations—overall, more of the same. While they aren’t as radical as the Oval Office’s earlier call for outright privatization of the almost 250-year-old public trust, if implemented, they would lead to massive changes, including a wave of new workforce cutbacks.

The report is entitled “United States Postal Service: A Sustainable Path Forward.” To the relief of postal workers, it prominently highlights the prefunding problem—and an impossibly steep billions of dollars still owed by USPS to cover that obligation.

To date, the Task Force concluded that the retiree health benefits obligation, including approximately $43 billion in mostly overdue pre-funding payments, “must be restructured with the payments re-amortized with a new actuarial calculation based on the population of employees at or near retirement age.” Here, the panel is recognizing that the existing pre-funding targets were unrealistic—and, just as the unions claim, led to an appearance of far higher deficits than actual postal operations indicated.

The report’s other major recommendations include:

-Facilitating more USPS closures and cuts at sites deemed unneeded.

-Increasing rates for some package delivery, potentially, and meanwhile redefining “essential services” that would retain “government protection” in the form of cheaper rates—effectively reducing current service.   

-Increasing revenue streams beyond traditional mail, as recommended in many previous whitepapers. For example, leasing disused properties, and charging rent from other delivery services for access to customer post boxes. The report strongly discourages offering banking services, despite evidence that has helped buoy sinking postal services in many other countries.

-Decreasing the number of post offices—and “reconsider[ing] the level of services provided.”

“It’s hard to understand the rationale for when they chose to drop this report—the timing,” Prof. Phil F. Rubio, an historian at North Carolina A&T University, told FEND. “But now that it’s dropped, it is time to take a good look at this report, and to scrutinize it.”

“That first report from this administration, calling for privatization—that really laid an egg, was unpopular, when it was released last spring,” Rubio said.  “I expect there to be a firestorm over this one.”

Unions react

Indeed, postal worker unions have been forcefully critical in their early reactions.

“If the White House Task Force on the Postal Service’s report was assigned a ZIP Code it would be 00000,” Mark Dimondstein, President of the American Postal Workers Union, said in a statement. “This poorly conceived report makes many of its recommendations based on myth and misinformation that instead of improving mail services, would deliver higher prices and less service for the public.”

“This report calls for slashing universal service,” Dimondstein said. “Recommendations would slow down service, reduce delivery days and privatize large portions of the public Postal Service. Most of the report’s recommendations, if implemented, would hurt business and individuals alike.”

“No institution is better suited for the ecommerce revolution than the USPS,” Dimondstein continued. “This is why some on Wall Street and their enablers on this task force want to position the Postal Service for sale to private interests.”

“The recommendations of the task force are not in the public interest,” the union leader concluded. “Our union will continue to strongly advocate for a robust public Postal Service and the rights of the hundreds of thousands of dedicated public servants who move the mail every day.”

Another major postal union, the National Association of Letter Carriers, also expressed initial disappointment with the long-awaited report.

“Although NALC is still studying the report and will report on its details in greater detail, NALC President Fredric Rolando called the report ‘a huge missed opportunity filled with legislative recommendations that are likely to be dead on arrival in Congress,’” the union said in a Dec. 4 press release.

“NALC totally rejects this attack on hard-working American workers and we are confident that bipartisan majorities in both houses of Congress will too,” Rolando added.

The NALC release says that the report fails to address “the artificial financial crisis caused by the 2006 retiree health pre-funding mandate enacted by Congress in 2006,” and that it “launches an all-out attack on the collective bargaining rights of postal employees – calling for the revocation of the right to negotiate wages by America’s postal unions.”

Having broadly slammed the report, Rolando and his union called it in part, a “victory”—after all, the document steps back from calling for a privatized USPS. 

“This is a victory for the public and the NALC,” President Rolando said. “Our efforts to mobilize the public and a majority of Congress to oppose privatization and to support H. Res. 933 and S. Res. 633 have paid off.”

Other major postal employee organizations pushed back.

The National Postal Mail Handlers Union applauded the panel’s acknowledgment that current pre-funding requirements were excessive, and a reduction needs to be implemented. But it lambasted the rest.

“Unfortunately, the Task Force also issued some very detrimental recommendations which, if implemented, would cut services to the American public, raise postal rates to major mailers, and reduce the wages, benefits and collective bargaining rights of all postal employees,” NPMHU said in a statement.

The National Association of Postal Supervisors merely noted the report’s release, stating that “NAPS is currently reviewing the Task Force Report.”

In general, postal unions continue to emphasize the role of the postal service—and of Postal Service employees—as being part of an historic public service organization, still needed and still providing good value for the whole country.

“The facts are: The public Postal Service serves each and every person,” Dimondstein continued. “According to recent surveys by Gallup and the Pew Research Center, it enjoys the highest level of satisfaction and trust of any government service or agency.”

“The United States has the lowest postage rates in the industrialized world,” he added. “USPS doesn’t take a penny in tax dollars and under the universal service mandate delivers to 157 million addresses six days a week at affordable prices.”

Lawmakers also spoke up. One, a longtime champion of postal and federal employees on Capitol Hill, roundly criticized the report—and reminded allies and opponents alike of legislation he backs that takes a different approach.

“The Postal Task Force’s report, “United States Postal System: A Sustainable Path Forward” provides just the opposite – a path towards higher prices, less service, and fewer customers,” Rep. Gerry Connolly (D-Va.) said in a statement. “Instead of engaging in meaningful consultations with Congress, the Task Force produced a report to support and continue the Trump Administration’s unpopular push towards privatizing the Postal Service.”

“A better way forward for the Postal Service is legislation pending in Congress, which has broad bipartisan support and the support of all postal stakeholders,” he continued. “The Postal Reform Act would provide the Postal Service with the legislative relief that it needs to stabilize its finances, modernize its business model, and return to solvency in order to continue to provide dependable service to millions of Americans across this country who rely on it.”

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Edward A. Zurndorfer Certified Financial Planner
Mike Causey Columnist
Tom Fox VP for Leadership and Innovation, Partnership for Public Service
Mathew B. Tully Legal Analyst

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