Government-Created Funding Crisis

Postal workers are contending with a funding crisis created by the government to justify privatizing the postal service. A law passed in 2006 requires that the United States Postal Service (USPS) prefund 75 years of future health care premiums for retired postal employees. As the National Association of Letter Carriers points out, "This prefunding mandate, which no other enterprise in the country faces, costs an average of $5.4 billion annually since 2007, accounting for nearly 90 per cent of the agency's losses. Between 2013 and 2018 it accounted for 100 per cent of the losses. On an operational basis, the Postal Service has been profitable for most of the past decade."

This requirement is part of the anti-social offensive to undermine the functioning of USPS so as to justify privatization and attacks on its workers.

Previous efforts at privatization include a Presidential Task Force chaired by the Treasury Department's Steven Mnuchin that in December 2018 proposed unprecedented service cuts to the Postal Service, cuts in postal worker pay and benefits, and increases in package prices. This followed a June 2018 Office of Management and Budget report that called for postal service privatization, something Mnuchin, a former hedge fund operator, continues to promote. The Treasury Department is involved as the USPS commonly draws on a $15 billion line of yearly credit from the Treasury, authorized by Congress 30 years ago.

Current government attacks also include a refusal to provide emergency funding. First-class and marketing mail, the service's top two funding sources, have slowed down significantly due to the pandemic while provision of needed safety equipment -- still insufficient -- has increased. Without the pandemic and without the 75-year benefit requirement, the USPS is self sustaining.

USPS is also largely independent of direct government interference. The appointment of Louis DeJoy as Postmaster General, along with interference by Mnuchin, are efforts to change that and make it easier to attack the workers and USPS as a public service.

The American Postal Workers Union (APWU) said in May: "Fifty years ago, postal workers waged a heroic nationwide strike to win better pay, benefits and the right to collective bargaining. This strike also recreated the United States Postal Service as an independent agency, designed to be free from the political patronage and cronyism that had plagued the old Post Office Department. The APWU is deeply concerned with the appointment process to make Mr. Louis DeJoy, a multi-million-dollar major donor to President Trump, the next Postmaster General and whether the Administration has returned to the days of political interference and patronage. He can choose to be a Postmaster General who implements the destructive plans of this White House: raising postal rates, cutting services, undermining stable union and family-sustaining jobs and selling the public Postal Service to corporations for their private profit. And if that is his choice, Mr. DeJoy will be met with stiff resistance from postal workers and the people of this country."

The developments have shown that their concerns are legitimate and the broad resistance to privatization and destruction of the public service persists.

Mnuchin has also used the emergency funding required by USPS at this time to further interfere. A $10 billion loan from Treasury was included in the CARES Act passed in March. The CARES Act also included hundreds of billions of dollars, basically with no strings attached, for the giant monopolies. USPS was to get $10 billion, even though its Board of Directors have asked Congress for $75 billion in funding -- $25 billion in emergency appropriations, another $25 billion for "shovel-ready" projects to modernize the agency's aging vehicle fleet and facilities, and an added $25 billion line of credit.

Mnuchin has so far refused even the $10 billion. "We are going to put certain criteria for a postal reform program as part of the loan," Mnuchin said.

The unions point out that currently, the USPS Board of Governors has the exclusive authority to appoint or remove the Postmaster General or "direct and control the expenditures and review the practices and policies of the Postal Service." Mnuchin is trying to gain greater control so that many USPS management decisions, including the terms of major contracts and policies related to privatization and pricing of packages and first class mail would be decided by the U.S. Treasury Department, not the USPS Board of Governors.

The appointment of multimillionaire DeJoy as Postmaster General is itself part of this direction, as his attacks on workers and USPS as a public service indicate. DeJoy is the first Postmaster General in more than 20 years to lead the agency without prior experience working there. The USPS Board of Governors itself now consists of four members who have been on the job for less than two years. More experienced executives have resigned in protest of Mnuchin's interference, or have been removed by DeJoy.

The public has stood firm with postal workers and continues to join with them in demanding that USPS remain a public service for the public good. In actions, petitions and polls, a majority have called for full funding now and guaranteeing the health, safety and jobs of postal workers providing a vital public service.

(Photo: American Postal Workers Union)

This article was published in

Volume 50 Number 34 - September 12, 2020

Article Link:
Government-Created Funding Crisis


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