USPS warns of shutdown

Tuesday, September 06, 2011

USPS warns of shutdown

By:  Tim Mak, Politico

U.S. Postmaster General Patrick Donahoe on Tuesday will ask Congress to take drastic measures to prevent the Postal Service from becoming insolvent and going out of business as early as this year.

Never before has the Postal Service been in such dire straits: the agency is so low on cash that it may not be able to make a $5.5 billion payment due this month for retirees and could have to shut down entirely this winter unless Congress takes emergency action, reports the New York Times.

In a hearing before the Senate Homeland Security and Governmental Affairs Committee on Tuesday, Donahue will likely request that Congress allow the agency to override the anti-layoff provisions in its union contracts, Donahue will also likely ask permission to withdraw his 563,000 employees from the health and retirement plans that cover federal employees so that the the agency can offer less generous programs.

In order to deal with losses and the increased digitization of mail, the Postal Service claims that it needs to trim 220,000 positions from its workforce by 2015 - 100,000 should be accounted for by attrition, but the remaining 120,000 would need to be eliminated by layoffs.

The U.S. Postal Service will handle 167 billion pieces of mail this year, down 22 percent from five years ago. The agency also plans to stop delivering mail on Saturdays.

"It is imperative that we have the ability to reduce our workforce rapidly… . It is not likely that the Postal Service will be able to eliminate these layoff protections through collective bargaining," reads a USPS white paper.

American Postal Workers Union President Cliff Guffey has plans to call Donahoe's plans "outrageous, illegal and despicable," in his prepared testimony, according to the Washington Post.

Donahue, himself a former Postal Union Member, plans to tell Congress that unless rapid action is taken, the Postal Service could be technically insolvent by the end of the month, even as it can continue technically continue delivering the mail until next August.

 

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