WASHINGTON (Reuters) – A fund that compensates federal employees for work-related injuries will run out of cash in the last quarter of 2012 if the U.S. Postal Service defaults on an upcoming $1.2 billion payment, according to the Labor Department.
The mail carrier, which has been losing billions of dollars each year, has more than 560,000 full-time employees and is the largest employer of workers covered by the Federal Employees’ Compensation Act.
The Postal Service still plans to make the payment, due in October, to the fund, USPS spokesman David Partenheimer told Reuters. But in its third quarter financial statement this month, the agency said that without relief from Congress it could not guarantee it would have enough cash.
The Labor Department said in a letter to Congress dated August 1 that without the Postal Service’s usual hefty contribution, the fund would be unable to pay any benefits in the last four months of fiscal year 2012.
“Over 2 million other federal employees are covered by FECA and … would be directly affected, along with USPS employees,” if the Postal Service fails to make its $1.2 billion payment, the Labor Department wrote to Darrell Issa, chairman of the House of Representatives Committee on Oversight and Government Reform, in a letter viewed by Reuters.
The assessment from the Labor Department could apply more pressure on Congress to provide financial relief to the Postal Service. Issa, a Republican, has been pushing legislation that would end Saturday mail delivery and set up groups to guide post office closings and overhaul the agency if it defaults on payments to the federal government.
The Postal Service is scrambling to find ways to save money. For example, in June it suspended payments to a federal retirement fund to free up cash for its operations.
Partenheimer said that is expected to save about $900 million, which could go toward the workers compensation payment. He also said the agency could consider paying less than the full $1.2 billion but enough to allow the Labor Department to meet its benefit obligations.
“At this time we do expect to make this payment in full but there is still uncertainty around it,” he said in an email to Reuters. “As we get closer to the end of the fiscal year we’ll have a better idea.”
The Postal Service’s claims represent 40 percent of the benefits paid each year by FECA for medical care and cash compensation for work-related disabilities.
The agency — which receives no taxpayer funds for its operations — has struggled to cope with plummeting mail volumes and skyrocketing employee costs.
The Postal Service has asked Congress for a substantial overhaul of its business and relief from several of its upcoming payments. But Congress is on recess until September 6, and partisan bickering and an upcoming deficit fight make achieving those reforms challenging.
The Labor Department said in its letter that there is no penalty facing the Postal Service if it skips the workers compensation payment.
what skyrocketing employee costs are they talking about??????? We have less employees now than 10 years ago.
Okay, its starting to make sense. After reading all about the USPS these past years, I couldnt understand WHY we couldnt be refunded or credited with our over payments to the retirement system. I didnt know why Congress was dragging their feet on the USPS remedy. Nor did I understand WHY Bush under the postal reorganization act had imposed such horrific payments of that magnitude. (Later came to read APWU pushed that one into fruitation) It does appear USPS funds many programs for the FEDS and it just isnt there! As a non-profit we are a Federal cash cow. So Im wondering if all the proposals USPS is making to Congress now, ie. Withdrawing from OPM, withdrawing from FEHB, etc is a scare tactic for Congress to “STEP IT UP” and just award them all they were asking for these past several years, “Reduce our debt payment and give us 5 days a week delivery.” Oh yes, eliminate all the circus activities when they want to close an office. Its all smoke and mirrors. Oh yes, scare all the employees into getting out if they can, no payment incentive coming your way….just leave, we’re sinking fast. Most folks are catching on.
I have been reluctant to comment until NOW! When will the politicians and government bureaucrats just tell it like it really is? Only the G.A.O report to Congress recently touched on it but didn’t go far enough. We subsidize Federal Health Care, Federal Retirement System, F.E.C.A ( above article) and even our competitors. How big would the financial deficits be to the FHBP if the Postal Service indeed pulled out of Federal Benefits System? I’m not an accountant but would guess a larger amount than what they would like to squeeze out of the Postal Service for future pension contributions. All revenue generated to contribute to these programs taken though payroll deductions comes from Postal Service Customers not Taxes. That is something that does not get mentioned in the Media. This seems to have less to do with Declining mail volumes, Management or Unions. It’s the way the Government does it’s Accounting and the lack of leadership in Congress. Please just someone tell it like it is!
bottom line is the postal service has to much management
what about the scafolding that they have up arround the postal service
in manhattan for about 2years and no work has been done they are paying for that
what about the park they built on top of the building in manhattan
management is a waste and has to be dealt with
Cutting management and ‘support’ jobs would require honesty. Don’t hold your breath.
THEY WANNA SAVE MONEY???? CUT THE MANAGEMENT STAFF IN HALF.
Mojo…..I was thinking the same thing…why is the Postal Service REQUIRED to pay for OTHER Feds compensation? Shouldn’t the TAXPAYERS be funding that?? That’s what those that are against US like to spout….TAXPAYERS,TAXPAYERS…if they do/did not work directly for the Postal Service the Postal Service should NOT be paying for them….yeah, they set us up to fail…in the public’s eye. Actually we have not failed, mgt. be damned!
Mojo…..I was thinking the same thing…why is the Postal Service REQUIRED to pay for OTHER Feds compensation? Shouldn’t the TAXPAYERS be funding that?? That’s what those that are against US like to spout….TAXPAYERS,TAXPAYERS…if they do/did not work directly for the Postal Service the Postal Service should NOT be paying for them….yeah, they set us up to fail…in the public’s eye. Actually we have not failed, mgt. be damned!
And WHY THE F… is the Postal Service payment, or lack thereof, going to affect 2 million other Federsal employees? Are we subsidizing them ,too? Was everything Congress did regarding USPS under GW Bush, set up to contribute to our failure? Funny, how the Fascists and Nazis first major move, before actions producing WW2, was to destroy the union movements of their nations.
Take it out of management’s salary and PFP ‘bonuses’. They force overtime on carriers and clerks to ‘earn’ those ‘bonuses’, they avoid ergonomic work studies (unless forced by OSHA, in a few cases), and it is their personal decisions to do so that produce workplace injuries. Once again they preach accountability and personal responsibility all the time to clerks and carriers. Are they going to show some personal responsibility regarding this issue? 1000:1 odds they will not.