National Association of Letter Carriers Statement on U.S. Postal Service Borrowing Limit
WASHINGTON, Oct. 18, 2012 /PRNewswire-USNewswire/ -- The National Association of Letter Carriers (NALC) today issued a statement from its president, Fredric Rolando, on the U.S. Postal Service reaching its $15 billion borrowing limit:
"We encourage the media to pause and fully consider the situation before jumping to the conclusion that the U.S. Post Service, having reached its $15 billion borrowing limit for the first time, is facing a fiscal cliff.
"The Postal Service announced this week that it has reached its borrowing limit — yet, it was also announced this week that there is a $25 billion surplus in its pension funds, as acknowledged by the Postal Service's Office of the Inspector General.
"The Postal Service has said that normal operations will continue and neither the public nor employees will be affected. But the borrowing authority issue drives home the point that Congress must undo the damage its own actions have inflicted on USPS finances.
"As we have long acknowledged, the Postal Service does face a serious — but quite manageable — business problem as a result of the public's increasing use of the Internet for email and other transactions. But the Internet also has spurred increased use of the Postal Service's shipping services from e-commerce. There are challenges, but there are also opportunities for growth.
"Unfortunately, at the direction of Congress, the Postal Service has been forced to set aside more than $45 billion to pre-fund the health care costs of its future retirees and is required to unnecessarily set aside billions more — although no other business or government agency in this country is required to pre-fund these benefits, and although the amount already accumulated will provide for retirees for decades to come.
"By mandating these payments and refusing to allow the Postal Service to access its own pension fund surplus, Congress has turned a manageable business challenge into a nightmare of artificial deadlines and unnecessary financial burdens.
"No organization could be more concerned about protecting Postal Service employees' pensions and retirees' health care needs than the NALC, which represents 174,297 city letter carriers, as well as 89,202 retirees.
"But the 2006 congressional mandate that the Postal Service do something no other agency or company has to do — pre-fund future retiree health benefits 75 years into the future — accounts for 80 percent of all the red ink and 100 percent of the use of its borrowing authority. Congress should remedy what it has done.
"It's also worth noting again that the Postal Service's inspector general issued a report Tuesday showing that the combined surpluses in the Postal Service's two pension plans now exceed $25 billion. If the Postal Service were allowed to operate like any other company, it would not have exhausted its borrowing authority.
"In short, this is a crisis created by Congress, and it will require a Congressional act to fix it. It's not necessary to impose drastic cuts in service — such as the loss of six-day or to-the-door delivery — to stop the flow of red ink. Such measures would, in fact, be counterproductive, by driving customers — and thus revenue — away from the Postal Service. Congress can end this crisis by relieving the Postal Service of these unnecessary financial obligations so it can focus its energy and resources on adapting to the changing needs of the American people."
SOURCE National Association of Letter Carriers