“We cannot use cost-cutting measures alone to restore our financial health,” Letter Carriers President William Young told the House Postal Service subcommittee on March 25. “Given the scale of the crisis before us, we need Congress to act as well.”

Postmaster General John Potter testified the agency lost $2.8 billion last year, due to declines in mail volume unseen since the Great Depression, as the economy crashed. He said volume from several key customers plunged. One was the financial sector, as banks and securities houses merged, collapsed or were taken over.

But Young and Postal Workers President William Burrus both said the real culprit for the agency’s financial crisis was not just the decline in volume or competition from the Internet -- which Young said his union has worked on for years with USPS -- but the health care pre-financing requirement. That’s virtually unknown in any other agency or private company. But the heavy burden threatens USPS’ existence, he warned.

“At this moment, the survival of the Postal Service – a venerable institution that is literally older than our country – hangs in the balance,” Young said. “The Great Recession we face today threatens to destroy the most trusted and universal connection most Americans have with their national government.”

“In the short-term,” Young urged lawmakers to “take the common-sense step of passing a bipartisan bill that…will save the USPS billions of dollars over several years by letting it pay current retiree health benefits out of its now-restricted retiree health fund.” Long-term, lawmakers must make other changes in financing USPS health care.

Right now, USPS has to fund those benefits out of current revenues. The legislation would let the agency stretch out the funding over a longer time, and carry forward some of the obligations after the year 2016.

“NALC strongly supports the policy of pre-funding future retiree health benefits. Those benefits are our benefits. They are benefits Letter Carriers and other postal employees are relying on to be there in the future – they are benefits that we have all worked very hard to earn. But we are seeking to adopt a more reasonable and affordable schedule of pre-funding,” Young added.

“Indeed, even with HR 22 (the bipartisan bill), the Postal Service will still be pre-funding at a far greater rate – some $2 billion per year – than virtually any other company. In fact, no other company is required by law or corporate accounting standards to pre-fund retiree health benefits – and not surprisingly, very few do.”

Young emphasized that unlike the banks, USPS and its workers are “not looking for a bailout. No taxpayer funds will be required by the bill. The USPS is seeking to use its own money to survive a cash crunch resulting from the economic crisis” that the bank collapse caused for the entire country.

Burrus agreed. Like Young, he cited past decisions by the GOP Bush government and the USPS board -- named by Bush -- that put the Postal Service in the red. And Burrus specifically said, again, that USPS board and management is too cozy with the big mailers, who practically wrote postal rates in the last round of revisions.

“No business can exist for long with a strategy based on cost reduction alone. Eventually it will become impossible to maintain an acceptable level of service, and there will be nothing left to cut,” Burrus said.

“However, there are steps postal management can initiate to address the issue of financial stability. They could begin with a fundamental shift in the relationship between the Postal Service and commercial mailers. I quote an observation by Joy Leong, a contributor to the newsletter Mailing Systems Technology: “Mailers are customers of the Postal Service, not shareholders. Printers, mail fulfillment services and other vendors are contractors of the Postal Service, not shareholders,” Burrus said.

“In recent years these lines have been blurred, and major mailers have assumed the role of shareholders. They have formed organizations that have been granted unfettered access to the inter-working of the Postal Service and to the decision-making process. One umbrella organization has even been afforded office space in postal headquarters. This cozy relationship between postal executives and major business mailers is unhealthy and counterproductive.

“One of the byproducts of this relationship is the preservation of discounts that benefit the mailers at the expense of Postal Service stability…The law specifically requires universal service at uniform rates, yet the standard has been nullified with the growth of discounts that were intended to be temporary. Over time, discounts have morphed into a disgraceful policy that rewards large mailers with rate reductions so extreme as to be absurd,” Burrus added.

Lawmakers back HR 22 and dislike Potter’s proposed service cuts and layoffs. Plans to cut staff and “offer voluntary early retirement opportunities to nearly 150,000 employees” plus “the Postal Service’s dire financial condition are of concern to me and the American public,” said subcommittee chairman Stephen Lynch, D-Mass.

This article was written by Press Associates, Inc., news service. Used by permission.