Thursday, September 08, 2011

Two Postmaster Generals in one!

How does this make any sense? The Postmaster General is reporting what everyone knows. The Postal Service is deeply in debt because of his contractual obligations to current and retired workers. So Postmaster General Patrick Donahoe wants to have Congress to approve the Postal Service getting around the union contracts that keep it from firing workers and to delay payment on pension benefits.
Facing a $10 billion loss in revenue this year, the Postal Service could be forced to shut down by August 2012 if drastic steps are not immediately taken to save it, USPS officials said.

"We will be out of cash to pay employees and pay contractors," Postmaster General Patrick Donahoe warned lawmakers at the hearing conducted by the Senate committee that oversees homeland security and government operations.

Donahoe devised a radical plan to turn around the beleaguered agency that includes cutting more than 100,000 jobs, closing hundreds of post offices and eliminating Saturday delivery. Those steps would save billions of dollars, but would take several years to implement, he said.

In order to stay solvent beyond next year, Donahoe asked lawmakers for permission to delay by three months a $5.5 billion payment the service must pay to its employees' pension fund.
So how is a delay in paying into the pension fund going to help the Postal Office? Are they going to have the money later? Their only hope is getting a bailout - they're asking for $55 billion from the federal government because they've supposedly overpaid into the pension fund. That's not going to happen. We need a lot more than a delay of a few months paying into the pension fund.

While the Postmaster General sounds like he's facing up to some hard facts and trying to make tough choices, why did he renegotiate a cushy deal for the Postal Workers Union just a few months ago?
Despite the agency's economic woes, the 250,000-member American Postal Workers Union negotiated a cushy labor deal with the USPS in March.

Despite the agency's economic woes, the 250,000-member American Postal Workers Union negotiated a cushy labor deal with the USPS in March.

The four-and-a-half-year agreement extends the no-layoff provision and provides a 3.5% raise over the period of the contract, as well as seven uncapped cost-of-living increases. A USPS spokeswoman told Businessweek in May that the agency agreed to the terms because it feared an arbitrator might be even more deferential to the union.

The agency is now asking Congress to allow it to break the agreement.
If an arbitrator would, in this economic climate with high unemployment and record deficits, decide that postal workers need more than a 3.5% raise with seven uncapped cost-of-living increases then there is something seriously wrong with the labor arbitration system. No wonder labor unions love the whole arbitration deal.