Congressmen call for job-cutting priority at USPS

Democrats and Republicans in the US House of Representatives said today that they did not believe changes to the US Postal Service pension funding arrangements would be enough to give it financial stability. The warning came as members of the House subcommittee on the federal workforce, US Postal Service and labor policy held a hearing today on the financial crisis at the USPS.

The hearing was held as Congress seeks to work with USPS management to address multi-billion dollar losses at the Postal Service as it continues to face up to declining mail volumes.

But while unions and USPS customers have said that the big issue in tackling USPS losses at the moment are “overpayments” in federal pension and retirement health benefit systems, the Congressional subcommittee said more substantial reforms were needed.

For Republicans on the subcommittee in particular, this meant significant reductions in the USPS workforce.

Congressman Dennis Ross, the chairman of the subcommittee, said in his opening remarks to the hearing that modifying pre-funding requirements for USPS retiree pension and benefit funds “do not address the long-term systemic problems and solvency issues” the Postal Service faced.

He said work force reductions had to be the “primary focus” of the Postal Service, its unions and Congress to improve financial stability.

And, noting that negotiations between the Postal Service and its unions were currently underway, he added that in his opinion it was not enough to cut staff numbers by attrition and early retirements.

“These efforts simply have not resulted in the changes necessary to maintain a self-funding Postal Service,” the Congressman from Florida said. “Realigning the work force by re-examining labor agreements must be part of the strategy to improve the Postal Service fiscal foundations.”

Darrell Issa, the chairman of the subcommittee’s parent committee, the Committee on Oversight and Government Reform, said he was keeping a close eye on the situation with the Postal Service since it had such an important role in American commerce.

He said there were at least two postal offices that needed to be closed in every Congressional district in the US.

But Issa said his priority was to see that the 15,000 USPS workers over the age of 65 who he said were on disability and therefore unable to work should no longer be claiming salaries.

“If you can no longer do the job and are over 65 there is a reasonable expectation that your status will change and you will not be counted among the active members of the Postal system,” said the Congressman from California.

“More palatable”

The leading Democrat on the subcommittee, ranking member Stephen Lynch, spoke of the need to reform the Postal Service’s retirement pre-funding overpayments, and revealed that he would be re-introducing legislation into Congress in the “coming days” to address the problem.

However, Lynch accepted there would be further “difficult decisions” ahead.

Nevertheless, he said: “Before we tackle issues such as changing delivery frequency and cutting services, laying off hard-working Americans, there are certainly some more palatable actions that we should consider first.”

The Congressman from Massachusetts said the Postal Service needed to use its “existing authorities” to lower expenditures, raise revenues and “put forth fresh innovation in both competitive and market dominant products”.

He said Congress would then provide further powers for the Postal Service to go further in raising its revenues.

Lynch’s Democrat colleague Congresswoman Eleanor Holmes Norton, of Washington DC, said changes to pension pre-funding arrangements couldn’t be anything other than a “stop gap”.

She said during her experience, the Postal Service had always appeared to be in a “crisis” and said that there needed to be more of a fundamental rethink on what the USPS was expected to be.

This would include discussions on issues like whether the American public needed a six-day delivery week, she suggested.

In his testimony before the subcommittee, the USPS chief executive, postmaster general Pat Donahoe, stressed the importance of adjusting the USPS pre-funding arrangements in saving the organization from insolvency this year.

But, even with substantial job cuts in the last few years, he revealed that in the long-term, he was expecting a considerably smaller work force than today.

“We have reduced head count, in 2006 we had 757,000 employees, today we have about 570,000 and moving forward we think we will eventually break into the 400,000 range,” he said.