Federaltimes.com - Lawmaker: USPS must re-examine labor agreements to lower costs

News Article

By:  Dennis Ross
Date: March 3, 2011
Location: Unknown

By Sean Reilly

The U.S. Postal Service needs to consider "all possible solutions" to its financial woes, including a more aggressive approach to reducing labor costs, a key member of Congress said at a Wednesday hearing.

Efforts to reduce the work force through attrition and early retirement incentives "simply have not resulted in the changes necessary to maintain a self-funding Postal Service," said Rep. Dennis Ross, R-Fla., who chairs the House subcommittee that oversees the agency.

"Realigning the postal work force by re-examining labor agreements must be part of the strategy to improve the Postal Service's fiscal foundation," Ross said.

The hearing was Ross' first as the panel's chairman. Although he did not elaborate on specific changes he believes are needed, the session is an early signal of how Republicans could take a tougher line toward the postal unions. Last year, the Postal Service lost a record $8.5 billion; on Wednesday, Postmaster General Patrick Donahoe again warned that the agency will not have the money on hand to be able to make a legally required $5.5 billion pre-payment for retiree health care due in September.

"We need legislation this year to address that fact," he said.

That call for relief is echoed by labor, management and mailing industry organizations who argue that no other federal agency faces a similar requirement. As part of its fiscal 2012 budget request, the Obama administration has proposed pushing back the bulk of this year's pre-payment to 2022 and thereafter. The White House also wants to refund the Postal Service an estimated $6.9 billion in overpayments to the Federal Employees Retirement System. Although that refund would be spread over 30 years, it would net the Postal Service $550 million this year, according to administration figures.

But Ross said such quick fixes would not address the Postal Service's long-term slide. In a report released this week, the Office of Personnel Management's inspector general offered support for the proposed FERS refund, but warned that changes to the retiree health pre-payment schedule could put taxpayers at risk down the road.

Between full- and part-timers, the USPS work force totals about 670,000. While Donahoe said Wednesday that the Postal Service has shed almost 230,000 jobs since 2000, one industry representative countered that the agency still has almost twice the capacity it needs.