Congress' Failure Pushes USPS to Brink of Default

APWU News Bulletin 18-2012, July 26, 2012 

American Postal Workers Union

http://www.apwu.org/news/nsb/2012/nsb18-120726-congress-failuretoact.htm

The failure of House Republican leaders to take action
to resolve the congressionally-manufactured USPS
financial crisis has brought the Postal Service to the
brink of default, APWU President Cliff Guffey is
warning union members. A $5.5 billion payment is due to
the U.S. Treasury on Aug. 1, but the Postal Service
cannot make the payment.

The default will have no immediate impact on mail
delivery or employees' pay, Guffey noted.

But the missed payment will focus attention on 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 pointed out. "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."

Although the default won't have immediate consequences
for mail delivery or pay, the Postal Service's
precarious financial situation has forced the USPS to
begin the process of closing half of the nation's mail
processing centers, scaling back overnight mail
delivery, and slashing hours at post offices, the union
president pointed out.

"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." 

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