Don’t expect the U.S. Postal Service (USPS) to turn a profit any time soon. Thanks to a multi-billion dollar contract that the financially challenged (to put it mildly) agency negotiated with its biggest labor union, the USPS is poised to keep on delivering losses as routinely as it delivers mail.
House Oversight Committee Chairman Darrell Issa (R-CA) thinks the agency’s contract with the American Postal Workers Union, originally intended to save USPS $3.8 billion over 4 ½ years, will do exactly the opposite. From Bloomberg:
“This contract falls short,” Issa said at a hearing about the Postal Service’s labor costs. “We have deep concerns that some of the provisions of the contract may in fact be the wrong direction, to less flexibility, less ability to trim the workforce and less ability to in the future make the kinds of investments we need to make.”
In other words, the agency won’t be in the black for the foreseeable future.
Adding to USPS’ financial woes, Bloomberg reports that the agency indicates it will “run out of cash unless Congress permits it to delay a $5.5 billion payment, due Sept. 30, for health benefits for future retirees.” And here’s the kicker: “The labor costs include payments for those benefits.”
Despite this grim financial forecast for USPS, Postmaster General Patrick Donohue told the oversight committee that his budget-busting negotiations with the postal workers union represent, in his mind at least, “a responsible agreement.”