Postal unions seek White House help on pay, benefits

Letter alleges USPS may not be able to make payroll in October.

Four unions representing the nation's postal workers are pleading for a meeting with the White House to address possible funding shortfalls for workers' payroll and retiree health benefits, according to a letter obtained by CongressDaily.

The presidents of the American Postal Workers Union, National Rural Letter Carriers' Association, National Association of Letter Carriers and National Postal Mailhandlers Union co-signed the Tuesday letter to White House Deputy Chief of Staff Jim Messina, warning that the U.S. Postal Service is at risk of defaulting on a $5.4 billion payment to prefund retiree health benefits at the end of September.

The letter alleges that USPS "may not be able to make payroll in October and will be forced to issue IOUs instead."

Yvonne Yoerger, a spokeswoman for USPS, confirmed that the unions wrote the letter but disputed the claim that payroll deadlines will be missed.

"That's not something that's been discussed at all," she said. "We are committed to making payroll."

Yoerger said USPS will continue to work with OMB and the Office of Personnel Management to determine if and how the Postal Service can meet the Sept. 30 deadline to pay forward $5.4 billion in future health liability costs.

The Postal Service is required by law to set aside funds for future retiree health care costs, rather than paying recipients as costs are incurred as other government agencies do. As a result of a $3 billion loss to date this year, the unions wrote, no money is available for those future payments, and regular payroll deadlines may not be met unless other funds are tapped.

"Such a [financial] collapse can be averted without resort to a taxpayer bailout by reforming the retiree health prefunding provisions of the law and [by] giving the Postal Service access to its own resources in the Postal Service Retiree Health Benefits Fund, which now has a balance of $32 billion," the unions wrote.

But that transfer of funds would require congressional approval, and the unions fear that pressure from the White House will be needed to prompt quick action. "We believe that the Obama administration must intervene now to avoid both a political and economic train wreck," they wrote.

Reps. John McHugh, R-N.Y., and Danny Davis, D-Ill., introduced legislation this year that would amend the law to allow USPS to reach deeper into the flush Retiree Health Benefits Fund, but the unions argue the measure would not do enough to fix the financial problems.