APWU Blasts Deficit Commission Proposals

APWU President Cliff Guffey is urging the National Commission on Fiscal Responsibility and Reform, also known as the Deficit Commission, to reject recommendations in its Dec. 1 report regarding the Postal Service, which he said were based on inaccuracies.

“The most troubling example of these inaccuracies is the use of the word ‘bailout’ to describe legislative actions taken in 2009,” the union president wrote in a Dec. 2 letter to the commission's executive director.

“The Postal Service did not receive a bailout: No funds of the federal government were transferred, loaned, or given to the USPS, and taxpayers suffered no adverse consequences. Congress simply permitted the USPS to reschedule a portion of prefunding payments for future retiree health care benefits, which are mandated by an ill-conceived law that was enacted just three years earlier,” Guffey said.

“The Postal Service’s financial problems are the direct result of the onerous prefunding requirements of the Postal Accountability and Enhancement Act (PAEA) of 2006. In fact, without the prefunding mandate, the USPS would have experienced a surplus of $3.7 billion in Fiscal Years 2007-2009, despite the worst recession in 80 years,” he said.

Guffey also objected to commission proposals to allow the Postal Service to close small offices that are unable to sustain a positive cash flow and to permit the agency to shift to five-day mail delivery.

“No business can survive and prosper by cutting service to its customers,” he wrote. “Closing post offices that are often the center of small communities would be devastating to the citizens we serve and to the Postal Service,” the union president added.

If the Commission wants to put the Postal Service on a path toward long-term solvency, Guffey said, “it should encourage Congress to adopt legislation that would allow the USPS to recoup excess funds paid into the Civil Service Retirement Fund due to an inequitable methodology for computing USPS liabilities.” Studies performed by two independent actuarial firms have concluded that use of a more equitable methodology would result in a refund to the Postal Service in the range of $55-75 billion, he noted.

In a separate letter, the union also opposed recommendations to cut federal civilian retirement and health benefits, which would affect postal retirees. The APWU is a member of the National Federal-Postal Coalition, a group of federal and postal organizations, which penned a Nov. 30 letter to the commission.

The coalition wrote that there is “no public policy basis to accept the proposed reductions to federal civilian retirement since the Civil Service Retirement and Disability Fund (CSRDF) is funded and financially sound,” and plans to require federal workers to “contribute a higher percentage of their salaries toward their defined benefit annuities would have the effect of a significant pay cut.”

In its letter to the commission, the coalition also addressed the discrepancies between federal employees’ pension requirements and those of employees in the private sector. While postal employees currently make payroll contributions to the CSRDF, “most medium and large private-sector employers have not required their workers to make any contributions toward their defined benefit pensions,” the coalition wrote.

“In light of the growing number of critical challenges being tasked to federal workers, the government cannot afford to make substantial reductions to the earned compensation of individuals who have dedicated their careers to public service,” the coalition wrote.

The Commission is scheduled to vote on its plan on Dec. 3, and it requires the support of 14 of the 18 members for approval. If approved by the commission, the report would then be voted on by Congress.