Postal Consolidations

APWU Web News Article 009-2011, Jan. 24, 2011

The union is “deeply disappointed” by the Postal Service’s announcement — via the Wall Street Journal — that it plans to close as many as 2,000 post offices beginning in March, APWU President Cliff Guffey said Monday.

The Postal Service did not specify the locations under consideration for closure, but said it is currently looking at offices “operating at a deficit.” The announcement comes after a brief lull in post office closings. The USPS originally announced in July 2009 that it planned to review more than 3,000 stations and branches for possible closure, but by early 2010, that number had dropped to 162 locations.

“Cutting service to the American people is not the solution to the Postal Service’s problems,” Guffey said. “The USPS can only remain relevant and resolve its financial difficulties if it improves and expands service.”

The cause of the Postal Service’s multi-billion dollar losses over the last few years is a little-known provision of the 2006 Postal Accountability and Enhancement Act, which requires the USPS to pre-fund future retiree healthcare liabilities, Guffey said. No other government agency or private business is required to pre-fund these obligations, which cost the USPS more than $5 billion annually.

Had it not been for these payments, the Postal Service would have experienced a $611 million profit over the past four years — despite the recent recession and online competition, he noted.

“Fortunately, there is a solution to this problem,” Guffey said. “The Postal Service should be permitted to use the surplus in its two pension funds to cover the cost of its future retiree health obligations.” Three independent actuarial studies have confirmed the USPS has a surplus of between $50 billion and $75 billion in its Civil Service Retirement System pension account, and $6 billion to $7 billion in its Federal Employees Retirement System account.

“Congress and the president must address this issue so that the U.S. Postal Service can remain viable and continue to serve the American people,” he said.

“This would not be a bailout,” Guffey added. “It would allow the USPS to use its revenue from postage to meet the congressional mandate, and it would not require any taxpayer contributions.”