February 01, 2012

Today, the House of Representatives is expected to vote on H.R. 3835, a bill introduced by Rep. Sean Duffy (R-WI) to extend for another year the freeze on federal employees’ pay. This legislation would freeze federal pay for federal employees and members of Congress for a third consecutive year. President Obama’s fiscal year 2013 budget includes a small increase for federal employees, a modest 0.5 percent.

The legislation takes advantage of members of Congress who support federal employees. Member of Congress who vote to increase the pay of federal workers will be forced to vote simultaneously for a pay increase for themselves.

On Tuesday, a “Dear Colleague” letter was circulated by Democrats in the House. It calls out the political pandering of the GOP, as H.R. 3835 “inappropriately groups Members of Congress who earn $174,000 per year with the men and women of our federal service. While we are not opposed to a freeze on Members’ pay for fiscal year 2013, we will not support a pay freeze for federal employees for a third consecutive year.” And in its closing, the letter suggests what the GOP should do to reduce the deficit, raise taxes on the wealthiest Americans and not freeze the wages of middle-class workers.

Source: NALC Activist Alert

As the House of Representatives prepares for a final vote on the payroll tax holiday extension later today, the Republican majority has once again turned to federal employees to foot the bill for it. NALC has weighed in over and over with Congress on the inappropriateness of treating federal workers as the cash cow or “pay-for” for programs that most Americans are able to enjoy. NALC fully supports the extension of the payroll tax holiday while the economy continues to struggle, but certainly not on the backs of the federal workforce.

H.R. 3630, the “Middle Class Tax Relief and Job Creation Act of 2011,” extends the current 2 percent payroll tax cut for one year. The bill offsets the costs of these extensions in part by freezing federal employee pay for an additional year through 2013, and it would increase federal and postal employee pension contributions by 1.5 percent over three years, starting in 2013. It would kill the retirement supplement that is paid to federal workers in lieu of Social Security for those in FERS who retire before age 62. This would affect those FERS employees retiring in 2013 or after. New employees hired in 2013 with less than five years of previous federal employment would be hit even harder, paying 4 percent of salary toward retirement benefits instead of the current 0.8 percent while slashing benefit levels by up to 44 percent. (This is achieved by reducing the “years of service” credit from 1 percent to 0.7 percent per year and by basing your annuity on your highest five years of salary instead of the currently used highest three years of salary.)

This bill is irresponsible and unfair to federal workers. Please call your member of Congress as soon as possible — click here for a contact information list — and urge him or her to vote NO on H.R. 3630. Also, click here to read a Federal-Postal Coalition letter that was sent to Congress on this last week that provides more information.

The payroll tax holiday should not be paid for by federal employees!

In Solidarity,

Fredric V. Rolando, President
National Association of Letter Carriers

NALC contract talks extended
New deadline set for Dec. 16, 2011

Dec. 7, 2011 — NALC President Fred Rolando and USPS Postmaster General Pat Donahoe announced on Wednesday, Dec. 7, that the parties’ 2006-2011 National Agreement has been extended a second time—to midnight Dec. 16, 2011—to give the parties additional time to negotiate the provisions of a new contract. The 2006 agreement had been set to expire at midnight Sunday, Nov. 20.

“We have been working in good faith to hammer out a new contract and we hope that this extension will lead to an agreement that our members can enthusiastically ratify,” President Rolando said.

The entire NALC Executive Council and the USPS negotiating team were sequestered at a hotel in Washington for the seven days leading up to the initial Nov. 20 deadline to work around the clock on the terms of a new National Agreement. As teams continue to work on the terms of a new contract, council committees chaired by the union’s resident national officers have engaged management counterparts in intensive discussions on the full range of contract issues affecting working conditions and workplace rights during daily negotiations that often stretched late into the night.

President Rolando has coordinated the work of all the committees and has taken the lead on the key economic provisions of the contract, including pay, health benefits and other matters such as the structure of the city carrier workforce. As the expiration date approached, the focus shifted to finding innovative ways to reduce the cost of employee health care while preserving and protecting the benefits of NALC’s members.

The 2011 round of bargaining kicked off in August at a time of extreme challenges for the Postal Service, as the congressional mandate to pre-fund future retiree health benefits has crippled the agency’s finances. Over time, the talks have gathered momentum. In the end, the parties agreed that more time could help the talks succeed.

“We remain committed to negotiating a fair contract that will advance the best interests of the nation’s city letter carriers,” Rolando said.

NALC President Fredric Rolando responded to the Postal Service’s announcement that it plans to reduce delivery standards with the following statement.

“We are very concerned about the proposal to reduce delivery standards. High-quality service is essential to preserving the value of our networks and to any future growth strategy. Degrading standards not only hurts the public and the businesses we serve, it’s also counter-productive for the Postal Service because it will drive more people away from using the mail. Changes in service need to be part of a coherent business plan that takes advantage of new opportunities, such as delivering the items people increasingly order online. We urge the Postal Regulatory Commission to review the proposal carefully and act to protect the long-term viability of America’s Postal Service.”

The 2006-2011 National Agreement between the NALC and the USPS expires at midnight Sunday, Nov. 20. The entire 28-member NALC Executive Council is in Washington, DC, conducting round-the-clock contract negotiations as the parties consider a whole range of issues that take into account the economy, wages, cost-of-living adjustments and health benefits.

Visit NALC

NALC President Rolando statement on losses

Nov. 15, 2011 — For the first time since the recession began in 2007, this year’s Postal Service loss was largely driven by the continued impact of the worst recession in 80 years and the effect of Internet technology—above and beyond the crushing and unique burden of the congressional mandate to pre-fund future retiree health benefits.

This mandate accounted for 100 percent of the losses over the previous four years.

That does not change what has to be done.

Congress must alleviate the pre-funding burden and the Postal Service and its stakeholders must work relentlessly to reinvent the Post Office for the 21st century.

Today we are working with the Postal Service at the bargaining table on doing just that.

The Chamber of Commerce, the NFIB and the mailing industry are missing in action

A couple of weeks ago, the House Oversight and Government Reform (OGR) Committee adopted the most anti-business bill imaginable, targeting a $1.3 trillion industry that employs 7 million to 8 million American workers with a destructively counter-productive bill called the Postal Reform Act of 2011. Although H.R. 2309 is squarely aimed at the half million mostly working-class Americans who work for the U. S. Postal Service, the bill would devastate tens of thousands of businesses – financial service providers, paper manufacturers, advertisers, printers, publishers, online merchants and pharmacy benefit managers – that rely on the Postal Service to make a profit. Put simply, it would destroy the USPS. The reaction: Silence. Jaw-dropping silence.

On Oct. 13, the Committee passed a bill that creates two new unelected and unaccountable government boards made up of people with no knowledge of our industry to dictate a top-down dismantling of an invaluable part of the nation’s economic and financial infrastructure. Not a peep is heard. A group of largely junior legislators who have no expertise in our industry follow the lead of some auditors on loan from the Government Accountability Office to radically restructure an enormous American industry from the clueless comfort of Washington, DC, and the business community goes mute. Astounding. A chaotic mark-up results in the adoption of one irrational amendment after another and the mailing industry yawns. Mind boggling.

Now, for the average small business owner, the reaction is understandable. In today’s horrible economy, who has time to follow the workings of an increasingly out-of-touch Congress with an approval rating in the low teens? But what about organized business; what about the major mailers? Where is the Chamber of Commerce? Where is the National Federation of Independent Business? Where are the DMA, L.L. Bean, Netflix, Amazon and eBay?

Compare the reactions of the Chamber of Commerce to the Boeing-National Labor Relations Board and postal reform issues. After the NLRB sought to punish Boeing’s executives for being careless enough, in clear violation of the law, to brag that they were building a manufacturing plant in South Carolina to punish Boeing’s worker for exercising their right to strike, the Chamber went thermonuclear. A few thousand jobs were at stake. But when the OGR Committee passed its “postal destruction act,” threatening the jobs of 7.5 million private-sector employees and putting an entire private sector industry at risk, it’s been the sound of silence from the Chamber.

Imagine the reaction of the NFIB if the Congress imposed a burden on a single private company or a single private sector industry to pre-fund almost 75 years of future retiree health benefits – for workers not hired or even born yet — in just 10 years’ time. Imagine if that $5 billion-per-year burden – that no other employer faces – were pushing that industry to the brink of bankruptcy. What would NFIB do? I doubt it would passively stand by and blame the private industry or company. I doubt it would be speechless as it is now with the Postal Service. There would be a massive advertising campaign and cries of bureaucratic over-reach and anti-business bias.

If the USPS were a private company, do you think the Chamber or the NFIB would ignore the results of two private-sector audits that found massive overfunding of pensions and side with the government auditors who insist on outdated actuarial standards from the 1970s? Do you think they would accept a recycled seven-year-old analysis from the GAO that applies an actuarial double standard in order to shift $50 billion in costs to a private USPS? I doubt it.

Perhaps we can forgive the Chamber and the NFIB for their ideological blinders. But how can we forgive the mailing industry for accepting its possible destruction like sheep? NALC is fighting on Capitol Hill for a fair resolution to the pension and retiree health obligations and is working at the bargaining table to adjust to the new realities of the postal market. What are the mailers’ associations doing?

Letter Carriers Bring in Top Financial and Policy Experts to Advise upon Postal Reforms
Aim is to Continue High Quality Universal Postal Service and Middle-Class Jobs

WASHINGTON, Oct. 16, 2011 /PRNewswire-USNewswire/ — The National Association of Letter Carriers (NALC) today announced the retention of investment bank Lazard Group, LLC and former assistant to President Barack Obama for Manufacturing Policy, Ron Bloom, as financial advisors in connection with issues relating to the United States Postal Service (USPS).

Fredric V. Rolando, President of the NALC, announced the retention of its advisors to 1,500 regional and local NALC leaders gathered in a national conference to consider the current USPS financial crisis and the long-term strategic, structural and business challenges facing the USPS.

President Rolando issued the following statement:

“The nation’s letter carriers are committed to preserving six-day-a-week universal postal services to every address in every village, town and city of the nation. NALC and our financial advisors are prepared to work cooperatively with the USPS, the Congress, the White House and all other postal stakeholders and constituencies to resolve current cash flow and financial issues and develop a viable long-term, pro-growth business plan for the Postal Service.

Our efforts will be fact-based, non-political, non-ideological, and focused on the continued provision of universal service to the public and the preservation of hundreds of thousands of good middle-class jobs. We are confident that Lazard and Mr. Bloom-both of whom have extensive experience helping to revitalize numerous large and complex business enterprises around the world-can provide valuable assistance to all stakeholders who share our commitment to maintaining and growing this vital national resource.”

The Postal Service is the hub of a $1.2 trillion mailing industry that employs eight million American workers centered on its unique ‘last-mile delivery network.’ NALC is currently engaged in collective bargaining with the USPS. The current five-year collective bargaining agreement expires on November 20, 2011.

October 13, 2011 — The GAO is simply wrong in denying the overpayment, and in doing so it differs with the USPS, the Office of Inspector General (of the Postal Service), the Postal Regulatory Commission, two independent actuaries, and legislators from both parties and both chambers of Congress who’ve addressed the issue in current legislation.

It’s absurd to claim that the money owed the Postal Service would not solve its financial problems by asserting that they result from changes in consumer mail use and a business model weakness — given that over the past four fiscal years, despite the recession, mail delivery netted a $611 million operational profit. The crushing burden of pre-funding retiree health benefits that caused 100 percent of the USPS’s reported losses between 2007 and 2010 could be relieved by a fair allocation of CSRS benefits.

And saying that transferring the money would result in an increased liability is like a restaurant telling a consumer who was overcharged that refunding the overcharge would require taking the money from someone else’s account. An overpayment needs to be refunded, period.

Moreover, it’s ironic that the GAO and OPM are focused on soaking the USPS when the non-postal federal government, which includes the Congress and the GAO has funded less than 50 percent of its CSRS pensions compared to more than 95 percent for the USPS despite the OPM’s use of grossly unfair allocation methods.

As we wrote in a letter to Congressional leaders last week, the GAO’s views are nothing new. The key issue for Congress should be fairness for the Postal Service, its employees and the $1.3 trillion mailing industry. NALC will not give up fighting for pension fairness.

Fredric V. Rolando
NALC President

Also: A letter from the Inspector General of the Postal Service to the GAO (PDF) explaining his findings on the CSRS overfunding.

NALC vows to continue the fight to maintain six-day delivery and “Save America’s Postal Service”

Overview

On Sept. 19, President Obama sent a $3 trillion deficit reduction package to the special joint committee of Congress established by the debt limit law to find ways to reduce the federal budget deficit. The package included a number of reforms to address the financial crisis at USPS.

Although we are somewhat encouraged by the proposed short-term cash relief provided to the Postal Service in the president’s package, NALC is bitterly disappointed that that the Obama administration has given in to postal management’s relentless two-year campaign in favor of five-day delivery. The administration has proposed giving the USPS the authority to eliminate Saturday mail delivery service, although it called for a delay in its implementation until January 2013. In doing so, the administration has embraced the downsizing strategy demanded by the majority on the USPS Board of Governors who were appointed by President George W. Bush. We will fight this proposal in Congress and renew our demands that the administration fill the two vacancies on the Board with people who believe in the mission of the Postal Service and who will seek to balance a sensible cost-cutting agenda with a revenue-growth strategy.

NALC President Fred Rolando applauded the administration’s new approach to the economic crisis—attacking the jobs crisis with near-term tax relief and infrastructure investments that will put the unemployed back to work and revive the economy (and therefore boost postal demand) while outlining a plan to close the country’s long-term budget deficit with a balanced combination of spending cuts and progressive tax reform. But Rolando noted that the “administration has missed the boat on many of its postal proposals.” The five-day proposal and the failure to permanently resolve the pre-funding burden are the most notable.

Of course, the administration’s proposals are just a starting point—they cannot become law unless Congress approves them. The special joint committee on deficit reduction has until Thanksgiving to develop legislation to reduce the deficit by $1.5 trillion. If the committee cannot reach agreement, defense and domestic discretionary spending (but not our health and pension benefits) will be cut by $1.2 trillion.

This report will provide a review of President Obama’s proposals affecting the Postal Service and federal employees. It then will outline the NALC’s reform agenda and how we plan to pursue it in the legislative process.

Postal reforms

The administration’s plan features five postal proposals:

• Obama Postal Proposal 1: Restructure the Retiree Health Benefits pre-funding schedule to reduce near-term USPS payments: The $5.5 billion payments due in 2011 and 2012 would be temporarily waived and a new formula for pre-funding would be implemented in 2013. The new formula would require the Postal Service to contribute the “normal cost” of future retiree health benefits associated with each year’s service by the Postal Service’s employees (each and every year) to the Postal Service Retiree Health Benefit Fund (PSRHBF). On top of that payment, the USPS would be required to amortize (pay down like a mortgage) the unfunded liability of the PSRHBF over 40 years. (This unfunded liability would be increased by the unpaid pre-funding payments from 2011 and 2012.) The administration has indicated that the combination of the two payments would leave the Postal Service pre-funding about the same amount in 2014 as it is paying today—about $5.5 billion per year.

  NALC reaction to Postal Proposal 1: Although it offers necessary short-term cash relief, this proposal still unfairly requires the USPS to be the only enterprise in America that must pre-fund its future retiree health benefits. It saves money over the next two years, but it will burden the Postal Service with the same unaffordable payments three years from now. If the Postal Service were a private company and participating in a multi-employer plan like FEHBP, it would be allowed to expense its retiree health benefits on a pay-as-you-go basis. There is no justification for treating the Postal Service differently from other federal agencies or large private companies. Neither Congress and its agencies (GAO and CBO) nor the White House and its agencies (OMB and OPM) are forced to pre-fund their future retiree health benefits.

  NALC supports continued retiree health pre-funding only if the Office of Personnel Management were required to fairly allocate the cost of CSRS pensions for postal employees as proposed by either of the two external audits released in 2010: the USPS Inspector General (Hay Group) report or the Postal Regulatory Commission (Segal Company) report. H.R. 1351 would require this—and would dramatically reduce or eliminate the unfunded liability of the PSRHBF. In the absence of a reform provided by H.R. 1351, we should halt the destructive USPS pre-funding policy until the nation’s economy recovers and the Postal Service’s finances are stabilized. No rational private company would bankrupt itself in the middle of a prolonged economic slump and sacrifice all other priorities to pre-fund retiree health benefits for workers not even hired yet.

• Obama Postal Proposal 2: Provide the USPS a refund over two years of the $6.9 billion surplus it has contributed to the Federal Employees Retirement System (FERS).

  NALC reaction to Postal Proposal 2: NALC strongly supports this proposal to allow the USPS to use its own surplus pension funds as it sees fit.

• Obama Postal Proposal 3: Give the Postal Service the authority to reduce mail delivery from six days to five days. The proposal would let the USPS implement its plan to eliminate Saturday delivery in January 2013.

  NALC reaction to Postal Proposal 3: NALC strongly opposes this provision. Reducing the scope and quality of service is no way to save the Postal Service. Eliminating Saturday delivery, which the Postal Regulatory Commission says would save little money while disproportionately hurting rural communities, the elderly and small businesses, would be counter-productive. It will simply drive the millions of mailers who value six-day delivery from the system and open the door to competitors who will step in to provide Saturday service—and demand access to Americans’ mailboxes. As we have been since the 2006 contract negotiations, NALC is prepared to find ways to make Saturday delivery more cost-effective through the collective-bargaining process.

• Obama Postal Proposal 4: Allow the USPS to offer non-postal products and increase collaboration with state and local governments. The proposal would allow the USPS to exploit its extensive retail and last-mile delivery networks to offer new services that will generate revenue and help underwrite affordable universal mail delivery.

  NALC reaction to Postal Proposal 4: NALC strongly supports finding new uses of the Postal Service to meet the public’s needs. The expansion of vote-by-mail and other state and local services makes great sense. Explicit authority to enter into commercial joint ventures of the kind common among foreign postal operators would also be welcome.

• Obama Postal Proposal 5: Give the Postal Service the ability to better align the costs of postage with the costs of mail delivery. An exigent postage rate increase would be authorized by law and the CPI-based price index applied to market-dominant products (mostly First Class and Standard Mail) would be liberalized. Rather than limit postage increases to the increase in the CPI for each and every class of mail, the USPS would be given the right to vary the increases for different types of mail so long as the its overall prices did not exceed inflation.

  NALC reaction to Postal Proposal 5: This reform appears to be reasonable—as the volume of mail has declined, the fixed cost of universal service must be spread across fewer pieces of mail. So far, the burden of adjustment has been borne by employees only. This modest proposal would have mailers share in this burden. NALC has always contended that the average CPI is but a statistical artifact with no real meaning. In 2006, we advocated the use of the CPI for Delivery Services instead of the overall CPI since it better captured cost trends in the delivery industry.

Overall, the administration has indicated that its postal proposals will provide the USPS $20 billion in near-term cash savings and would reduce the federal budget deficit on the unified budget by some $18 billion by improving the Postal Service’s finances. NALC is both encouraged and disappointed by this package of reforms. We are encouraged that President Obama is attempting to creatively address the USPS cash crisis through the deficit reduction process, and we welcome his proposal to return the $6.9 billion postal pension surplus in FERS to the Postal Service as proposed in Rep. Stephen Lynch’s H.R. 1351. But we are outraged that the president reversed his previous support for six-day delivery. And we are disappointed that the administration opted for a deferral of the next two pre-funding payments ($5.5 billion each) instead of embracing a permanent reform based on the Lynch bill’s recovery of the even larger CSRS surplus.

Federal workforce proposals: Shared sacrifice

The administration’s plan features three proposals that affect the federal workforce, including letter carriers and other postal employees:

• Obama Federal Workforce Proposal 1: Raise payroll contributions by federal and postal employees for FERS and CSRS pensions by 1.2 percent over three years, beginning in 2013. The 0.4 percent per year increase in contributions in 2013, 2014 and 2015 apply to postal employees, even though the postal pension account in FERS is overfunded. This would effectively reduce the Postal Service’s contribution by a total of 1.2 percent by 2015.

  NALC reaction to Federal Workforce Proposal 1: NALC would generally oppose this proposal if it were not made in the context of a balanced deficit reduction plan. However, given that the president has proposed to balance spending cuts with reasonable provisions to close tax loopholes and restore some semblance of progressivity to the tax code after a decade of tax cuts tilted toward the wealthiest of Americans, the proposed increase in pension contributions by federal and postal employees can be considered a reasonable contribution by the federal workforce to help balance the federal budget. However, if the special joint committee rejects reasonable tax provisions or adopts unreasonable postal reforms, the NALC will strongly oppose increasing federal employee pension contributions.

• Obama Federal Workforce Proposal 2: Eliminate the FERS supplemental annuity for newly hired federal and postal employees. Under current law, a supplemental annuity is payable to those who qualify to retire under FERS before the age of 62—up to the time they reach age 62, at which time they qualify for Social Security benefits. The supplemental annuity was designed to replicate the Social Security benefit earned by federal and postal annuitants from their federal service and pay it to them until they qualify for Social Security benefits.

  NALC reaction to Federal Workforce Proposal 2: Although it would only apply to new-hires, NALC will oppose this proposal as unfair. It would repeal a measure that is essential to assure pension equity between federal employees covered by CSRS and FERS and ensures that long-serving federal employees are permitted to retire in dignity. And it would create a second class of federal workers who would be forced to work much longer before retiring.

• Obama Federal Workforce Proposal 3: Establish a Commission on Federal Public Service Reform to study and propose reforms to modernize federal personnel policies. It is not clear whether the Postal Service would fall under the jurisdiction of this commission.

  NALC reaction to Federal Workforce Proposal 3: NALC will reserve judgment on this proposal until more is learned about its parameters. However, we will oppose its creation if it is given a mandate to slash federal and postal employee benefit costs outside the normal congressional process. Federal and postal workers should bear the same sacrifices as other citizens in the deficit reduction program—on taxes, public spending, etc.—but they should not be singled out for discriminatory benefit cuts just because they work for the federal government. America’s strength as a country depends on our ability to attract and retain excellent public servants.

NALC’s reform agenda

The president’s proposals will not alter the NALC’s reform agenda. We outlined our priorities to the administration and will do the same with the special joint committee of Congress. We are advocating the following measures:

• Immediate access both to the Postal Service Retiree Health Benefits Fund (PSRHBF) to cover the cost of health insurance premiums for existing retirees as well as to the excessive level of funding in the PSRHBF (compared to private-sector standards of funding) for operational purposes.
• An immediate repeal of the retiree health pre-funding schedule included in the 2006 PAEA law, obviating the need to make a $5.5 billion payment on September 30, 2011.
• An immediate transfer of the undisputed $6.9 billion surplus in the Postal Service’s FERS account to the Postal Service to allow it to reduce the debt it ran up to make $21 billion in pre-funding payments over the past four fiscal years (which accounted for 100 percent of the Postal Service’s losses of $20 billion between 2007-2010).
• If pre-funding is to be preserved, the adoption of Title I of S. 1010, or H.R. 1351 in its entirety—which would secure the postal surplus in the CSRS fund for the purpose of covering the unique and excessive burden of pre-funding retiree health benefits.

NALC wishes to underline the last point. The strength of the policy justification for fairly allocating the CSRS pension costs (for pre- and post-1971 service) is reflected in the broad bipartisan support this solution has on Capitol Hill. More than 200 members of Congress, Democrats and Republicans alike, have co-sponsored H.R. 1351 in the House of Representatives. In the Senate, there is a bipartisan consensus between the key leaders of the Senate Homeland Security and Governmental Affairs Committee. The major reform bills introduced by Senators Tom Carper and Susan Collins (S. 1010 and S. 353, respectively) embrace a fair allocation of CSRS and FERS pension costs as the best way to address the onerous cost of pre-funding retiree health and to stabilize the Postal Service’s finances.

Although the Obama administration failed to formally propose the CSRS reforms contained in the Lynch, Carper and Collins bills, it has indicated that it will support these reforms should Congress pass them.

NALC’s reform agenda

The president’s proposals will not alter the NALC’s reform agenda. We outlined our priorities to the administration and will do the same with the special joint committee of Congress. We are advocating the following measures:

• Immediate access both to the Postal Service Retiree Health Benefits Fund (PSRHBF) to cover the cost of health insurance premiums for existing retirees as well as to the excessive level of funding in the PSRHBF (compared to private-sector standards of funding) for operational purposes.

• An immediate repeal of the retiree health pre-funding schedule included in the 2006 PAEA law, obviating the need to make a $5.5 billion payment on September 30, 2011.

• An immediate transfer of the undisputed $6.9 billion surplus in the Postal Service’s FERS account to the Postal Service to allow it to reduce the debt it ran up to make $21 billion in pre-funding payments over the past four fiscal years (which accounted for 100 percent of the Postal Service’s losses of $20 billion between 2007-2010).

• If pre-funding is to be preserved, the adoption of Title I of S. 1010, or H.R. 1351 in its entirety—which would secure the postal surplus in the CSRS fund for the purpose of covering the unique and excessive burden of pre-funding retiree health benefits.

NALC wishes to underline the last point. The strength of the policy justification for fairly allocating the CSRS pension costs (for pre- and post-1971 service) is reflected in the broad bipartisan support this solution has on Capitol Hill. More than 200 members of Congress, Democrats and Republicans alike, have co-sponsored H.R. 1351 in the House of Representatives. In the Senate, there is a bipartisan consensus between the key leaders of the Senate Homeland Security and Governmental Affairs Committee. The major reform bills introduced by Senators Tom Carper and Susan Collins (S. 1010 and S. 353, respectively) embrace a fair allocation of CSRS and FERS pension costs as the best way to address the onerous cost of pre-funding retiree health and to stabilize the Postal Service’s finances.

Although the Obama administration failed to formally propose the CSRS reforms contained in the Lynch, Carper and Collins bills, it has indicated that it will support these reforms should Congress pass them.

Conclusion

NALC will vigorously oppose the elimination of Saturday delivery and will work with the special joint committee (and at the bargaining table) to find intelligent alternatives. We will also urge the joint committee to adopt a bipartisan solution to the postal crisis—the Lynch bill (H.R. 1351) in the House or similar measures within bills proposed by Senators Carper and Collins in the Senate. The USPS should not be held to a different standard for funding retiree health benefits than that applied to private companies and other agencies. But if we must pre-fund, a fair allocation of pension costs in both FERS and CSRS is absolutely essential.

We encourage Republicans to work with Democrats and the administration to protect the long-term viability of the Postal Service without resorting to ideologically driven attacks on postal employees or false claims that what we or the president support is a taxpayer bailout. We don’t need or want a taxpayer bailout; in fact, for 30 years the Postal Service hasn’t used a dime of taxpayer money. The solution to the postal crisis is to let the USPS have access to its own “surplus pension and health funds” so that it can adapt to the changing postal needs of America’s households and businesses.

We urge the news media to check the conventional wisdom at the door when it comes to the Postal Service. Neither the Internet nor the recession has caused the Postal Service’s financial woes. Rather, the congressional mandate of 2006 makes the Postal Service the only agency or business in the country that must pre-fund future retiree health benefits. This mandate has caused 100 percent of the Postal Service’s losses in recent years. The USPS has adapted to the recession and Internet diversion well; the $20 billion in losses over the past four years (2007-2010) were caused by $21 billion in pre-funding payments that no other enterprise is required to make.

Despite our deep concerns about some of the president’s deficit reduction proposals, NALC commends President Obama’s overall approach to deficit reduction—his plan to balance spending cuts with new revenues from the wealthiest Americans who have been spared any sacrifice in recent years—even though nearly all the gains from economic growth over the past decade bypassed the poor and middle class and flowed to the top.