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The Pre-funding Mandate. Bringing Down The American Postal Workers Union.

"Mechanicsburg IL - United States Post Office Zip Code 62545"

"Mechanicsburg IL - United States Post Office Zip Code 62545" by myoldpostcards on flickr

As headlines across the corporate media world of the U.S. reported on August 11th, the U.S. Postal Service is proposing to cut its workforce by 120,000 jobs and withdrawing from the federal health and retirement plans. Initial reports were that during the last four years, the service lost $20 billion, including $8.5 billion in fiscal year 2010. Therefore, the U.S. Postal Service drafted two documents in “Workforce Optimization” paper and a paper on health and retirement benefits requesting breaking its labor contracts and reigning in its health benefit and pension costs. It would seem almost reasonable until one drills deeper down into the facts. If you do that, then you can see this is a case where the corporate state is union busting again (and attacking the middle class) through a deceptive creation of crisis to seek further privatization (classic shock doctrine).

At the heart of the matter is a 2006 Congressional mandate put on the US Postal Service contained in the “Postal Accountability and Enhancement Act of 2006” to pre-fund healthcare benefits of future retirees, a 75 year liability over a 10 year period. No other agency or corporation is required to do this. This provision costs the Postal Service $5.5 billion a year. When you add in an adjustment that was made in how workers’ compensation costs were calculated based on interest rate assumptions and long term predictions concerning health care and compensation of $2.5 billion (a non cash accounting adjustment), you come up with $8 billion in cost. Actual loss was $500 million and when added, comes to the $8.5 billion reported for 2010. While $500 million is a lot, it doesn’t compare with $8.5 billion and is down from the previous year loss of $1 billion. If you took out the onerous pre-funding mandate, the Postal Service actually shows a $700 million profit over the last four years instead of the $20 billion loss. The Postal Union has been trying to get Congress to authorize the transfer of the Postal Service’s money estimated to be between $50 billion and $75 billion overpaid in the Civil Service Retirement System transferred into the PSRHBF.

The National Association of Letter Carriers is pushing passage of Rep. Stephen Lynch’s bill, H.R. 5746 which calls for this transfer strategy. The American Postal Workers Union is pushing H.R. 1351 also introduced by Rep. Stephen Lynch (D-MA) which would address the crisis without cutting pay and benefits, without eliminating collective bargaining rights, or slashing service. The corporatists, on the other hand also have a bill, H.R. 2309, introduced by Rep. Darrell Issa (R-CA) and Rep. Dennis Ross (R-FL) which would not address the USPS overpayments to its pension accounts, will not address the onerous pre-funding mandate, force postal workers to make up the difference, create a commission that would order post office closures and a board to cut wages, abolish benefits, and end layoff protections, and increase postal workers’ health care costs. We can only hope this attack on American workers fails. Is there anyone taking any bets in this dark and disgusting period of American history?

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Michael Monk

Michael Monk