WASHINGTON —The nation’s two big postal unions, the Letter Carriers (NALC) and the Postal Workers (APWU) reacted in different ways to Postal Service’s suspension of its financial contributions to their pension plans, which began April 10.
Workers will continue to contribute to the two plans, the Federal Employees Retirement System, and the Thrift Savings Plan, a 401(k)-style arrangement, USPS said. But it won’t match those amounts, at least through Sept. 30.
NALC blamed congressional inaction for the lack of a fix to that multibillion-dollar yearly drain. APWU planned an April 14 Zoom forum at 7 p.m. Eastern Time for its members, and anyone else interested in the Postal Service’s future. It’ll unveil its own ideas at the hour-long session, then throw the lines open for questions and suggestions.
The two unions were confronted on April 9 with the Postal Service’s announcement. Its pension pre-payments are $2.5 billion yearly, the USPS said.
“There will not be any immediate detrimental impact to our current or future retirees if normal FERS (Federal Employees Retirement System) cost payments are temporarily withheld” through the end of fiscal 2026 on Sept. 30, Postal Service Chief Financial Officer Luke Grossmann said. But the cash crunch is coming fast, he added.
Grossmann also raised the possibility of USPS asking the Postal Rate Commission, which sets stamp prices, for another, immediate hike in the price of the first ounce of a first-class letter, which now costs 78 cents. One report said USPS seeks a hike to 95 cents.
Before this, new Donald Trump-named Postmaster General David Steiner, who came over to the USPS from the private sector and admitted he didn’t know about the depth of its financial ills, warned Congress it could literally run out of available cash by February.
The USPS contributes to two retirement systems for its workers and the yearly cost runs into the $2.5 billions or more, adding to its red ink. Overall, USPS employs 600,000+ workers, 80%+ unionized and a majority of them workers of color, women, veterans, or combinations of those characteristics.
For people of color, the Postal Service, like the rest of federal, state, and local government, has long been recognized as a route to safe and stable middle-income employment.
NALC President Brian Renfroe moved to assure his members, the city letter carriers. Then he said Congress is responsible for its inaction on the issue.
The pension payment “pause has no immediate impact on any current or future retired Letter Carriers,” he said.
“This move is necessitated by the Postal Service’s current financial situation and is a direct result of continued inaction by Congress to fix the legislative constraints that inhibit the Postal Service’s ability to invest in its infrastructure and modernize to meet the needs of its employees and the people.
“If Congress were to allow for a new investment strategy for USPS retiree health and pension funds, a fair recalculation of the agency’s Civil Service Retirement System pension obligations, and an increase in the agency’s borrowing authority, this pause in FERS contributions would not be necessary.”
In his statement, Grossmann advocated both those moves. Currently, the law governing the Postal Service mandates investment of its funds only in federal securities, rather than a higher-paying mix of private and public bonds. And its borrowing authority—credit limit—is $15 billion, which hasn’t increased in more than 30 years. USPS wants to double it.
“It is time for Congress to act on these commonsense policy changes to protect our jobs, retirements, and the essential and reliable service we provide to every American,” said Renfroe.
The unions, along with their chief congressional champion, Sen. Bernie Sanders, Ind-Vt., also advocated letting the Postal Service loose to provide more revenue-raising services other than just selling stamps and shipping goods, especially “the last mile” for private delivery firms such as FedEx, UPS and especially Amazon.
Those services would include reviving postal banking, which ended in 1967, and would not only bring in revenue but allow people who now have no bank branches to turn to the USPS banking, rather than expensive private payday lenders and moneychangers.
The Postal Workers will discuss the union’s plan for fixing the Postal Service’s budget hole at a livestream session at 7 p.m. on April 14, new APWU President Jonathan Smith said. A signup form is on the union website, and it’s open to all.
The forum is entitled “Are we broke or is there hope?”
“Yes, the USPS is facing financial challenges, but APWU has been warning about this for decades,” the union said. Smith will share “the real fixes” that are available and the union proposes “to fix this in a way that works for Postal Workers and America” in the first half of the hour-long session, then throw it open for discussion, Smith said.
The Postal Service has lost $118 billion, cumulatively, since 2007, the agency said. It blames an enormous slump in its chief money-maker, first-class mail, as people shifted to the Internet, along with prior congressionally imposed pre-funding requirements for both present and future pensioners, which cost billions of dollars. That pre-funding was in a decade-old GOP-passed “reorganization.”
Another “cost” it claims is from the congressional mandate for six-day delivery to every address in the country. That sixth day, Saturday, costs $400 million yearly. The USPS has already cut back pickups from post offices on what it says are “money-losing” routes, most of them rural, and it chafes at being allowed to raise postage rates only once a year. It also wants to close many of those post offices.
And the red ink was worsened by global tariff wars, USPS said. Though it didn’t say so, GOP President Donald Trump set off those wars with his yo-yo tariff hikes and retreats. Gasoline price spikes for USPS fleets—the largest in the U.S.—hurt, too, as did inflation. And the private package carriers, again principally Amazon, are now hiring part-time and “at will” low-paid drivers and delivery services to go those “last miles” they had entrusted to the USPS.
We hope you appreciated this article. At People’s World, we believe news and information should be free and accessible to all, but we need your help. Our journalism is free of corporate influence and paywalls because we are totally reader-supported. Only you, our readers and supporters, make this possible. If you enjoy reading People’s World and the stories we bring you, please support our work by donating or becoming a monthly sustainer today. Thank you!
CONTRIBUTOR
