APWU President William Burrus denounced Postal Service plans to eliminate Saturday mail delivery March 18, and urged Congress instead to correct two major causes of USPS financial difficulties: A provision of the 2006 Postal Accountability and Enhancement Act (PAEA) that requires the agency to pre-fund retiree healthcare costs, and a flawed method for computing USPS obligations to the Civil Service Retirement Fund.

“The PAEA has forced the Postal Service virtually into insolvency,” Burrus said. It imposed a $75 billion obligation that is not borne by any other federal agency – including Congress, he noted.

“This requirement, more than any other single factor, has created a USPS deficit of alarming size. A 2008 GAO report found the USPS’s $5.3 billion shortfall in FY 2007 was caused primarily by this provision of the PAEA,” Burrus said.

“If the USPS were to release financial records showing liabilities minus this obligation, such documents would clearly demonstrate the disastrous effect the legislation has had. Absent this pre-funding burden, the Postal Service would have experienced a cumulative surplus of $3.7 billion over the last three fiscal years, despite declining mail volume, an economy in chaos, and electronic diversion.”

In testimony submitted to the Senate Subcommittee on Financial Services, Burrus said five-day mail delivery “would be the beginning of the demise of the Postal Service.”

The union president also urged Congress to give serious consideration to a report by the USPS Office of Inspector General that concluded that the methodology for determining the Postal Service’s contribution to the Civil Service Retirement and Disability Trust Fund is flawed — to the tune of $75 billion.

“A more equitable allocation of pension liabilities would offer the USPS stability,” Burrus said, “which could delay any reduction in the number of mail delivery days and other policies that would undermine its ability to provide universal service at uniform rates to American citizens.”

Burrus also challenged USPS projections that it would experience a $238 billion deficit over the next 10 years. “Frankly, these predictions are outlandish and unsupported. The USPS has offered no justification for these wild claims, and, unfortunately, the media has failed to challenge them.”