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Time’s Up: USPS Proposes Monster Cuts

September 2011

WASHINGTON, DC—The showdown between the U.S. Postal Service (USPS) and Congress has reached zero hour and, as of press time, the government has not countered with any viable measures to sustain the nation's mail delivery service beyond the end of this month, when the USPS will default on its $5.5 billion payment to cover future health care costs.

The USPS laid down the gauntlet in August, proposing to close as many as 3,700 retail outlets and reducing its staff by as much as 220,000 full-time workers by the year 2015. The closures represent more than 10 percent of USPS' 32,000 retail offices, while the staff reduction would account for approximately 38 percent of its 580,000 career employees.

The 38 percent reduction in staff is unlikely to occur, as Congress would need to set aside the USPS' collective bargaining agreements with its unions (negotiations have begun with unions representing less than half of the workforce). Its current pact contains layoff restrictions that would be exceeded by the proposed amount.

The Postal Service also wants to pull its current employees and pensioners out of the retirement and health benefits plans covering federal workers in order to set up its own benefits system. Having already maxed out its borrowing limit and enduring another year of $8 billion in losses, USPS has already indicated it will not be able to make the health care benefits prepayment, due Sept. 30.

The USPS is the only federal agency required to make such a prepayment; however, due to governmental accounting, eliminating the payments would make the federal budget deficit appear $5.5 billion larger.

According to the Dead Tree Edition blog, Donohue told the Mailers Technical Advisory Committee that the USPS will not seek an exigent rate increase this year.


 

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