GOP Hostility Kills Prefunding Legislation

Legislative Update from the NALC:
Casie | September 30, 2010 at 11:32 am | Categories: National News | URL:
*From the National Association of Letter Carriers’ website:

GOP hostility kills prefunding legislation, aided and abetted by misguided USPS priorities
September 29, 2010 — On Tuesday, Senate Republicans unanimously blocked a proposal from Senate Majority Leader Harry Reid to provide a $4 billion reduction in the $5.5 billion retiree health payment due September 30 under the grossly unfair prefunding provision mandated by Congress in 2006. Reid’s proposal would have deferred the $4 billion payment to allow Congress time to reform the flawed prefunding provisions of the law and stabilized the Postal Service’s recession-battered finances. A similar deferral was adopted in 2009.

The USPS now projects a $7 billion loss in 2010—nearly 80 percent of which is caused by a massive prefunding payment for future retiree health benefits that no other company or agency in America is required to make. USPS will needlessly waste its limited borrowing authority to make a prefunding payment that is unnecessary—the USPS already has already set aside more than $35 billion in its future retiree health fund, enough to fund retiree benefits for decades.

“Sadly, postal management must share the blame for this financial fiasco,” NALC President Fredric V. Rolando said. “The Postmaster General and his top executives wasted the entire year seeking unpopular measures to eliminate Saturday delivery and stack the deck against employees in collective bargaining rather than focusing on the prefunding reform backed by mailers and the entire postal community.” Indeed, the Postal Service waited until mid-September to prepare a request for a deferral. Senate staffers told the NALC that postal management informed Senate leaders that the USPS could make the prefunding payment if relief was not provided. But making the full payment will leave the USPS with a dangerously low cash position.

The $4 billion deferral was stripped out of a continuing resolution (CR) that funds the government through early December, which Congress was expected to adopt today. Not a single Republican senator would agree to a vote on the CR unless a group of provisions, including the prefunding deferral, was dropped from consideration. Under Senate rules, it takes 60 votes to bring a spending bill to the floor for debate. The GOP’s leadership in the House of Representatives took a similar position—adding the postal prefunding issue to a list of items they opposed in any CR passed by the Senate.

The Postal Service has maintained all year that making the full $5.5 billion prefunding payment for retiree health would jeopardize its financial position. But its efforts to eliminate Saturday delivery and tilt the interest arbitration process in management’s favor were given priority over financial reforms.

“Letter carriers should know that we are in the fight of our lives—fixing the Postal Service must begin with the passage of the Lynch bill (H.R. 5746) and a fair allocation of pension costs,” Rolando said. “The next Congress should allow the USPS to use its massive $50-$75 billion pension surplus to prefund future retiree health benefits and then let postal employees and postal management do the hard work of creating a 21st century Postal Service.”

“Few workers have more riding on the mid-term elections than we do,” he said.


One Response to “GOP Hostility Kills Prefunding Legislation”

  1. Michael Kurz Says:

    Thank you for starting this Blog! I believe most of my thoughts that I have can be better served here than in the Carriers Forum in the regular NC Letter Carriers website. As the former friend of someone, I cannot understand the Republican mentality that took away the prefunding clause in the resolution! A man who was my best friend in my senior year of high school was laid off from his job a year ago. He was in management, and had worked for his company for over 30 years. With all this in mind, he evidently had some money saved up as he has been playing and riding his Honda Gold Wing around the East Coast. He is also taking advantage of the extended jobless benefits that President Obama approved. Yet….. he has blamed Obama for his hardship, when his company had planned to outsource to Mexico even before Obama was elected! Sounds to me like Republicans are pulling at straws to do anything they can to put blame on the President. I am not saying that President Obama is perfect, because he is not. I don’t believe any President could do a great job given the circumstances of the economy right now. My former friend though needs to at least try to look for a new job instead of sitting on his ass and suckling the Government. Trust me, if I was in that situation, I would! I have never been one for being idle and even after I do eventually retire from the US Postal Service, I will not be totally retired. NALC 1127 President and Steward

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