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Postal Service seeks financial assistance

June 27, 2011

GREENSBORO — The U.S. Postal Service asked members of Congress — including Rep. Patrick McHenry, a member of the Postal Service’s oversight committee, and Rep. David Price, a member of the House appropriations committee — to enact legislation to return the organization to financial stability.

In a letter signed jointly by Board of Governors Chairman Louis Giuliano and Postmaster General Patrick Donahoe, USPS urged McHenry and Price to support action to:
— Eliminate current mandates requiring $5.5 billion annual retiree health benefit pre-payments;
— Allow the Postal Service to access Civil Service Retirement System and Federal Employee Retiree System (FERS) surpluses; and
— Give the Postal Service the authority to determine the frequency of mail delivery.

USPS is in “a dire financial predicament” according to Giuliano and Donahoe, despite ongoing aggressive cost-reduction initiatives. During the last four fiscal years, the Postal Service reduced its size by 110,000 career positions and saved $12 billion in costs.

Absent legislation this fiscal year, Giuliano and Donahoe said making the mandated $5.5 billion pre-payment due Sept. 30 will not be possible.

“This pre-payment for future retiree health benefits is no longer tenable given present-day financial challenges,” officials said.

Federal retirement law also has resulted in a $6.9 billion surplus for Postal Service contributions into the Federal Employees Retirement System (FERS). The letter calls for these funds to be restored to the Postal Service to help avoid insolvency. The Postal Service informed the Office of Personnel Management that it is suspending employer contributions for the defined benefit portion of FERS annuities effective June 24.

The Postal Service will continue to transmit employees’ FERS contributions to OPM, as well as employer automatic and matching contributions and employee contributions to the Thrift Savings Plan, and employees will continue to receive service credit. The annuity payment suspension is an emergency cash conservation measure expected to free about $800 million in the current fiscal year.

The letter states a cash shortfall is projected to occur as early as October: “The Postal Service is facing the real prospect that it will not be able to meet payroll next (fiscal) year, thus disrupting mail delivery.”

The Postal Service is communicating regularly with McHenry and Price and others in Congress and the Administration about its serious financial position, expressing support for provisions of two separate pieces of legislation introduced by Sen. Tom Carper and by Sen. Susan Collins, respectively. 

“The need for legislative change is immediate,” Giuliano and Donahoe said. “We urge your support of this vital postal legislation and ask that you work for immediate enactment this fiscal year to avoid the possibility of mail and package delivery disruptions.”

The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.

Comments

It is a sorry state of affairs....

June 28, 2011 by Backbone (not verified), 3 years 25 weeks ago
Comment: 505

.. to allow the (once) worlds greatest postal system go down the tubes. But the sad truth is it is not the internet or FEDEX or UPS, it is the lower caliber of employees that are hired and now work at the Post Office across the U.S.

Once there awas a time when you could drop a letter in the mail(with a 10 cent stamp) at Point Barrow Alaska and it would be recieved, statistically without error in key West Florida in less than 5 STINKIN workdays, Now think about that. That was when the postal employees were invariable all veterans hired due to veteran preference in the post World War 2 years. They wore uniforms and performed their jobs with pride in a timely and eficient manner. Nowadays you got a bunch of affirmative action hires who converse among themselves and dont project an image of confidence in the system. THAT IS THE PROBLEM. IT IS ANOTHER EXAMPLE OF INEFFICIENCY IN THE FEDERAL GOVERNMENT, well ALL GOVERNMENT!

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