USPS Floats Big Cuts to Employee Pay, Leave and Benefits

Postal Service Floats Big Cuts to Employee Pay, Leave and Benefits
New postal workers would no longer earn a pension under preliminary business plan.
July 2, 2019
U.S. Postal Service
Retirement Benefits
Eric Katz
Senior Correspondent
The U.S. Postal Service, facing pressure from Congress to propose initiatives to ensure the agency’s long-term viability, is floating a business plan that would include significant cuts to employees’ take-home pay and benefits.

USPS included a hike to the employee contribution level for pensions in a first draft of a 10-year business plan presented to lawmakers and stakeholders, according to multiple people who were briefed on it, as well as phasing out pensions altogether for new hires in favor of a defined-contribution system only. The Postal Service is looking to cut the amount of paid time off employees receive by merging annual and sick leave and pitched a popular proposal with demonstrated bipartisan backing to require all postal retirees to enroll in Medicare as their primary insurance provider.

The mailing agency suggested it resume closures of mail processing plants, according to those briefed by management, a controversial practice it has used to reduce its vast physical footprint and shed workers. USPS stopped closing the facilities amid congressional pushback and intensifying talks for a legislative overhaul to the agency. Last year, the Postal Service inspector general found the agency realized just 5% of its projected savings from the consolidation plan.

USPS told those briefed on its plan that it was still subject to change. At a hearing in April, lawmakers grilled Postmaster General Megan Brennan on why the agency had failed to produce a 10-year business plan and indicated they would not move forward on legislative reforms USPS has said it desperately needs without first viewing the document. The details of the business plan were first reported by HuffPost.

Rep. Elijah Cummings, D-Md., who chairs the House Oversight and Reform Committee and helped usher an overhaul bill through the panel in the last Congress, said he planned to set a July deadline for the business plan and Brennan promised to meet it.

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‘People Are Crying When They Come Into Work:’ Unions Protest OPM-GSA Merger

Lawmakers said they will try to amend an appropriations bill to block the acting OPM director from following through on her threat to lay off 150 agency employees.
June 25, 2019
Erich Wagner
Union officials, Office of Personnel Management employees and Democratic lawmakers held a rally Tuesday across the street from the agency’s headquarters to protest the Trump administration’s plan to merge the federal HR agency with the General Services Administration.

Roughly 50 people vowed to fight the effort to effectively dismantle OPM and send its regulatory authority to an unconfirmed presidential appointment within the Office of Management and Budget, chanting phrases like, “Hell no, we won’t go,” and “Save OPM.”

Officials at the American Federation of Government Employees and the National Federation of Federal Employees, both of which represent OPM workers, organized the rally following the news last week that acting OPM Director Margaret Weichert has threatened to furlough, and eventually lay off, around 150 agency employees if Congress does not commit to greenlighting the OPM-GSA merger by the end of June.

Rep. Gerry Connolly, D-Va., said at the rally that he would introduce an amendment Tuesday to the fiscal 2020 Financial Services and General Government appropriations bill to block the administration from executing furloughs or reductions in force at OPM. The bill already contains provisions blocking funds from being used to implement the merger.

“They have no plan, and they’ve communicated with nobody,” Connolly said. “Here’s what we assert: They don’t have the statutory authority to do this, and we’ll challenge them in court if necessary.”

Del. Eleanor Holmes Norton, D-D.C., said the furlough threat is an effort to strong-arm lawmakers, or failing that, to push forward with the plan before Congress can act to block it.

“This layoff threat is based on the theory that if they proceed quickly enough, we will not be able to stop them,” Norton said. “But even [Sen. James Lankford, R-Okla.] has said that the business case has not been made [to merge the agencies].”

John Cherry, president of AFGE Local 32, which represents OPM employees, said that since the announcement of the plan to merge OPM and GSA, morale has been in free fall.

“The atmosphere at OPM is very low,” he said. “People are crying when they come into work, they don’t want to come to work. They feel depreciated by the new management of OPM.”

Cherry said Weichert told employees after her testimony in Congress that everyone “needs to get on board” with the merger. And Marlo Bryant, chief steward of the AFGE local, said Weichert has been evasive in conversations with workers about what the merger would mean for employees.

“She has frequently said that everyone will continue to work if they want to, that there would be no RIFs and no layoffs,” Bryant said. “But when asked questions from employees directly, like why GSA and what the merger would mean, she wouldn’t answer.”

Bryant also took issue with a common comment by Weichert, that whenever she discusses her plans for OPM, nobody offers a valid counter proposal to fix the agency.

“Why haven’t employees been able to see the data?” she asked. “She sits in meetings and says, if anybody has any better ideas, let me know. How the hell can we let you know, if you’re not giving us any of the information?”

The House is expected to vote later this week on the Financial Services and General Government appropriations bill.

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Bipartisan legislation introduced to repeal USPS pre-funding mandate

Close-up of the Capitol’s dome with the US flag
On April 28, Reps. Peter DeFazio (D-OR), Tom Reed (R-NY), Xochitl Torres Small (D-NM), and Brian Fitzpatrick (R-PA) introduced the USPS Fairness Act (H.R. 2382) which would repeal the mandate that USPS “pre-fund” decades’ worth of health benefits for its future retirees, enacted through the Postal Accountability and Enhancement Act (PAEA) of 2006.As letter carriers know, the pre-funding mandate has cost an average of $5.4 billion annually since 2007 and is responsible for 92 percent of USPS losses over the last twelve years, and 100 percent of losses over the past six years. Were this burden not imposed, USPS would have recorded surpluses of nearly $4.0 billion since 2013.

Instead, the mandate has prevented the Postal Service from properly investing in its networks and infrastructure since it was enacted and even worse, the resulting financial losses are still used to both threaten core services that Americans rely on — such as door-to-door service, six-day delivery, and convenient post office hours – and to advance proposals to privatize the Postal Service and attack the jobs and rights of America’s postal employees.

As the heart of a $1.4 trillion mailing industry that employs 7.5 million Americans, the Postal Service links more than 159 million American households and businesses to each other seven days a week. It is essential to our nation’s voting systems and to multiple industries, communities and populations, including e-commerce; prescription drugs; the nation’s paper, publishing, and advertising businesses; and to millions of small businesses and tens of millions of citizens in rural, suburban, and urban communities across the country.

“NALC applauds Reps. DeFazio, Reed, Torres Small, and Fitzpatrick for introducing this bipartisan legislation as a crucial first step toward bringing financial stability to the most trusted and highest-rated agency in the federal government,” said NALC President Fredric Rolando. “The USPS is a national treasure and an essential part of the nation’s economic infrastructure. Congress caused this crisis when it passed the PAEA in 2006 and Congress can begin to fix it by passing the USPS Fairness Act.”

Should this legislation progress through the House and Senate, and then be signed into law, it will significantly improve the financial situation at the Postal Service. NALC is committed to working with Congress on any and all options that can bring financial stability to this agency so that it can then focus on much needed improvements to its networks and infrastructure (i.e. fleet replacement), as well as developing new and existing products and services.

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