Billions needed in Post Office bailout of union excesses

December 4, 2010 14:22

American taxpayers will have to pick up the tab, a loss of $8.5 billion this year and  the $5.5 million retirement package for outgoing Postmaster General John Potter.

The Americano

Understanding the deficit and its debt in the trillions of dollars is not an easy issue to grasp or understand. Everyone knows that you cannot spend more money than you make, or you go broke. But when we try to apply the same principles to the government, something gets lost in the translation.

That is why this story in the Daily Caller makes so much sense.

It is the story of the precarious financial difficulties the United States Postal Service (USPS) is facing; the real possibility that American taxpayers will have to pick up the tab, a loss of $8.5 billion this year. And to top that somebody will have to pay the $5.5 million retirement package for outgoing Postmaster General John Potter.

Mull over the three points and one can see why Congressman Jason Chaffetz (R-Utah) had a fit when he found out about the situation .

“That was ridiculous,” Chaffetz said in a phone interview with The Daily Caller. “It doesn’t seem fair to anybody.”

According to the Daily Caller, Chaffetz, the ranking Republican member on the Subcommittee on Federal Workforce, Postal Service and District of Colombia, and Rep. Darrel Issa (R-Calif.), the ranking Republican member of the Oversight Committee have been working on “introducing a comprehensive postal reform bill.”

The problems the USPS faces are many. Chaffetz mentioned two:  the manner in which USPS accounts for retirement funds and the ways in which it does workers’ compensation.  Kurt Bardella, spokesperson for Issa mentioned a third. He said operating costs, which amount to 80 percent of expenditures, need to be reduced. And that leads directly to the existing contracts with the unions.

The situation is simple. The financial situation of the USPS is precarious. Reality is that the government will not allow the USPS to shut down. This means “there’s no alternative other than a taxpayer bailout, and that’s what we’re trying to avoid,” Bardella explained.

It will not be an easy problem to solve, for USPS labor contracts do not permit layoffs, and stalemates are resolved by a third party arbitrator who is not required to take the financial situation of the organization into account.

“Unions have balked at the idea of changing contacts, and refused the necessary layoffs that need to be made,” Bardella said. “Even when we could retrain workers and put them in other areas of government, they’ve rejected that.”

So a quick reminder of the situation at hand. The USPS lost $8.5 this year. That entitles the retiring postmaster general to a $5.5 million severance package. And the possibility of the problem being resolved without the taxpayer pitching in to plug the hole is slim to none.

Even Chaffetz recognizes this.

“There probably are going to be need some taxpayer funds needed,” Chaffets said. “Perhaps an early retirement program to get rid of some of the dead wood that is in the personnel.”

Though such a proposal would cost taxpayers money in the short term, he said, it would ultimately cut costs and save money.

One question comes to mind. Why can’t the government do with USPS workers the same things Ronald Reagan did with the air traffic controllers. To fix the problem unions must make concessions. If they don’t let them go on strike and hire new workers to replace them. With the unemployment at 9.6 percent it is not difficult to imagine finding enough qualified people to do the job at a rate that taxpayers can afford.

Oh, and of course; make sure that a stop check order goes out on the severance package owed to the retiring Postmaster General. The losses this year alone show he does not deserve the package he will get.

The Americano / Agencies

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