The cable news networks have found a new advertiser – namely, the AFL-CIO. Specifically, the Postal Workers’ Union, which is now running this ad aimed at lobbying Republican Rep. Darrell Issa (R-CA) and the House Government Oversight Committee against following the law.
Sounds complicated? Well, first, here’s the ad:
The ad is plenty of nothing, with the exception of the claim that your tax dollars don’t support the Post Office.
Why would they bother putting this ad out? Well, the release accompanying the launch of the campaign says the following…
“We believe it is important to inform the public about the work APWU members perform,” Guffey said. “We also must dispel the persistent myth that our work is funded by taxpayers.
“With the Postal Service facing a financial disaster, some politicians and pundits have erroneously suggested that the USPS and postal unions are seeking a ‘bailout,’” Guffey said. “Nothing could be further from the truth.”
The ad is intended to support two crucial APWU campaigns, Guffey said: A drive to sign up new union members, which will begin with a National Organizing Week set for July 18-22, and a campaign to win support for legislation that would address the Postal Service’s financial crisis. “The federal government is holding billions of dollars of USPS money,” the union president said. According to studies by two independent actuaries, the USPS has overfunded its pension plans by $50 billion to $75 billion.
A 2006 law, the Postal Accountability and Enhancement Act, requires the Post Office to “pre-fund” (the union alleges) the employees’ pension plans.
Issa’s position is a different one. In a Washington Times editorial last September, he said this…
As labor contract renegotiations between USPS and its employee unions commence this fall, Congress should reject requests to delay again billions of dollars in future retiree health insurance obligations that USPSis required to meet annually. The problems need to be addressed now. Postponing billions in unmet obligations won’t help.
The predicament in which USPS finds itself is not uncommon. Because of the ever-increasing reach of the Internet and digital media, bookstores, record stores and DVD rental chains have all seen their customer base and profits decline dramatically. Unlike these other affected businesses,USPS cannot simply go out of business or declare bankruptcy. The need to downsize the labor force and reduce costs to reflect declining demand and new market conditions needs to be the first priority of both workers and management.
Labor costs account for 80 percent of USPS operating expenses. Yet because of union contracts that contain “no-layoff” clauses, thousands have less than a full day’s work, and some are even paid to sit in empty rooms.
Last year, USPS revenues declined 9.1 percent, and without permission from Congress to delay requirements to pre-fund some worker benefit plans, the Postal Service would have lost $5.2 billion. A $7 billion loss is anticipated this year.
It turned out that the Post Office actually lost $8.5 billion last year.
- Operating revenue of $67.1 billion in 2010 declined $1 billion from 2009, primarily due to lower volume;
- Operating expenses for 2010 of approximately $70 billion (excluding a $5.5 billion expense for pre-funding Retiree Health Benefits), down from approximately $70.4 billion in 2009 (excluding a $1.4 billion expense for RHB);
- Net loss of $8.5 billion in 2010, $4.7 billion above the 2009 level, mostly as a result of the revenue decline, additional expenses in 2010 associated with RHB pre-funding and workers’ compensation – but offset by cost savings associated with the work hour reduction; and
- Total mail volume of 170.6 billion pieces, compared to 176.7 billion pieces in 2009, a decline of 3.5 percent.
It seems there’s a legitimate disagreement about whether this retirement-benefit money constitutes pre-funding. To the extent it is, though, it makes sense. After all, regular mail is becoming obsolete thanks to e-mail. Even the Post Office understands that. And because of that fact, the Post Office REALLY can’t afford to have an unfunded pension liability hanging out there when the entire mission of the Post Office probably won’t even exist in 10 years.
And yet the Postal Workers’ Union wants Congress to cook the books and leave the pension liability unfunded. One wonders how they expect their claim about how the Post Office doesn’t run on tax dollars in light of this – if not for the taxpayer kicking in, who covers the USPS’ loss from last year? Who will cover it this year? And with the USPS’ top brass warning that if they’re not allowed to kick their pension obligation down the road this year they won’t have the money to continue operations by Christmas, how does the union expect the public to believe our tax dollars won’t be paying the bill either now, by bailing out the loss, or in the future by having to shore up the pension fund of a union working for an entity in permanent economic decline? And if the Post Office gets to delay the pension fund payment this year, does anyone believe things will get any better next year? Or the year after?
But don’t you worry about a thing. Because the Post Office doesn’t cost you any money at all. The union says so.