The U.S. Postal Service is neither broken nor bankrupt. Rather, a number of important actions need to be taken to enable this invaluable American institution to be saved as well as revitalized.
First, President Obama and Congress need to adopt immediate corrective legislation to ensure that the postal service is adequately funded by addressing the real reason for the USPS’s financial problems. Based on past law, since 2006, this has involved the USPS being required to prefund future retiree health benefits at a rate of $5.5 billion annually over a 10-year period.
The American Postal Workers Union describes the devastating impact this requirement has imposed on the postal service: “This mandate is the primary cause of the agency’s financial crisis. No other agency or private company bears this burden.”
The budget shortfalls and crisis created by this prefunding requirement have led to calls for draconian cuts involving proposals to lay off thousands of postal workers, close a number of major mail processing centers nationwide, including the one in Hampden, increase the amount of time needed to deliver mail, while simultaneously cutting mail delivery from six to five days per week. In addition, thousands of local post offices in rural and inner-city areas throughout the U.S. would be eliminated.
In this ever-changing, high-tech world where customer service is of paramount importance, these proposed cuts make absolutely no sense. This is particularly true when one considers how vital efficient and prompt mail delivery is to individuals, families, educational institutions, businesses, governments, organizations and all other groups and entities comprising U.S. society.
Plus, these proposed cuts only will make the financial problems of the USPS worse, not better. With further cuts in services and resources, the USPS will lose even more customers, creating a continued downward spiral of lost revenue and financial shortfalls.
A constructive alternative proposal has been advanced by David C. Williams, inspector general of the USPS, in a letter to U.S. Sen. Bernie Sanders of Vermont. Highlights of this proposal call for the following:
“Eliminate the requirement for the postal service to make annual $5.5 billion payments into its retiree health benefit fund; allow the $44 billion currently in the fund to grow with interest. No payments would be made from this fund until it is deemed to be fully funded; the postal service would continue to directly pay the health care premiums for retirees. Allow current overpayments of $13.1 billion in the Postal Service pension funds to be refunded to the Postal Service.”
In his letter to Sen. Sanders, Mr. Williams states that “this solution is one option to provide needed short-term flexibility for the postal service to address its current financial crisis.” However, he also maintains that “additional actions would be necessary to address remaining financial gaps between projected revenues and expenses during the next four-year period.”
It is in this area where the management of the USPS should work closely with all their employees and unions on a good-faith basis. The experience and knowledge of these workers and their unions comprise an invaluable resource for helping the postal service deal with its present and future challenges. After all, who better than letter carriers, postal workers and processors know all the details for best implementing their jobs fairly, safely, effectively and efficiently.
William Murphy is the director of the Bureau of Labor Education at the University of Maine.