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Rep. Issa: No stopping Postal Service default

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SAN DIEGO | Not that there was much doubt on this score, but Rep. Darrell Issa, R-Calif., this morning confirmed  that Congress won’t act to head off a U.S. Postal Service default on a $5.5 billion payment into a retiree health care fund that is legally due Wednesday.

The default “will occur,” said Issa, who chairs the House Oversight and Government Reform Committee and is the lead sponsor of a USPS overhaul bill. The payment was originally due last September, but Congress pushed back the deadline until Aug. 1. Issa’s comments came in an interview after he spoke at an Association of Government Accountants conference here.

Leaders of the financially struggling Postal Service have said they lack the cash to cover both this Wednesday’s payment and a similar installment due Sept. 30.

Asked why lawmakers didn’t grant another delay on the payment due Wednesday, Issa replied: “You can only be in denial so long.”

After a year with “essentially no real reforms” and too little action to shrink the Postal Service’s workforce, he added, the result is that lawmakers are unwilling “to kick the can down the road, at least at this time.”

By the way, just because the Postal Service misses the August and September payments (cumulatively worth $11.1 billion) doesn’t mean those obligations disappear. Unless Congress decides otherwise, the agency will remain legally on the hook for them regardless of its practical inability to pay.

In a statement released today, USPS spokesman Dave Partenheimer reiterated that the mail carrier will continue to deliver mail and pay its employees and contractors. Health benefits to current retirees will not be affected.   

“However, comprehensive postal legislation is needed to return the Postal Service to long-term financial stability,” Partenheimer said. ”We remain hopeful that such legislation can be enacted during the current Congress.”

The Postal Service has at least one other financial management headache on the horizon: A workers comp payment in the neighborhood of $1.3 billion that’s due to the Labor Department in mid-October. In a new report, the Postal Service’s inspector general says that a $100 million cash shortfall is expected  around that time. Earlier this year, Joe Corbett, the agency’s then-chief financial officer, indicated that such a shortfall could be finessed. But it’s one more chore that he and other USPS executives would presumably prefer not to have on their plates.

[This post has been updated.]

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Comments

  1. Shulara Says:
    July 30th, 2012 at 2:50 pm

    Why don’t the public ask there congressmen/women or senator to start paying for there health care and postage in a new reform bill?? They get free medical care for life and postage. They need to balance our nation’s budget like every americian does??

  2. x Says:
    July 30th, 2012 at 3:08 pm

    Someone needs to kick Issa’s can down the road.

  3. wakeupamerica Says:
    July 30th, 2012 at 3:21 pm

    it seems to me that ‘kicking the can down the road’ is exactly what ISSA intended to do and is doing by not bringing up any
    postal legislation for a vote. who is Issaa trying to fool? in knucklehead Issa’s defense though, there really was little time to vote on any legislation except repealing the univeral health care act. i believe the republican led house will vote again on a bill to repeal the health care law at 5pm today and then another bill to repeal the univeral health care law again at
    9pm today and then another bill to repeal the health care law again a midnight and then again…………welll, you get the
    picture

  4. hugh foley Says:
    July 30th, 2012 at 3:49 pm

    we have a choice, dump Issa vote for Jerry Tetalman. we need your support please get involved.

  5. Joe Says:
    July 30th, 2012 at 4:56 pm

    “After a year with “essentially no real reforms” and too little action to shrink the Postal Service’s workforce, he added, the result is that lawmakers are unwilling “to kick the can down the road, at least at this time.”

    He must be talking about the reform that congress won’t let the Postal Service do. Congress has stopped every effort by the Postal Service to save money. Hopefully the voters in his district get smart and vote Issa out of office. Congressman Issa ownly agenda is helping himself and not the country.

  6. John Bonnie Says:
    July 30th, 2012 at 5:15 pm

    http://apwulocal170.org/ ARNIE COWELL

    See how this large local union president said it all, those who have a future in the USPS, is all the APWU is fighting for.
    PMG can go ahead with VER !

    7/19/2012 – Early Outs:
    Let me try to explain to you members who keep asking about the early-outs. I have written before that President Guffey will not negotiate any early outs until the Postal Service gives us the jobs back that were negotiated in the contract. Management still continues to violate the collective bargaining agreement at will. The Union has no obligation to negotiate an early out. He, President Guffey, is trying to save jobs. Isn’t that what a union is supposed to do? Incentives are not the top priority. The members who still have a future with the Postal Service are the main concern. Incentives are not a right or are they earned or owed. They are to eliminate jobs that we can’t afford to lose. So until management gives us our work back don’t be looking for any incentive anytime soon.

    This is Guffey’s stupidity and those dimwits that back him in his stupidity, who votes for these morons?
    And here we see a real Union, who realizes that a downsizing ( putting it Mildly) is upon us, and want to save jobs for those who still have a future and/or do not want to go.

    The agreement with the Postal Service is intended to provide a financial cushion, and added peace of mind, for Mail Handlers who might be prepared to move on to the next chapter of their lives by leaving the Postal Service – a decision that could be particularly trying during these difficult economic times. In addition, with many closings and consolidations expected to be implemented at mail processing facilities in August 2012 and February 2013, the MOU also will benefit remaining Mail Handlers to the extent that some Mail Handlers choose to retire because of this incentive. More specifically, remaining Mail Handlers will experience less excessing and will benefit from more landing spots if excessed, more bidding opportunities, and other results of reduced staffing.

    communications@apwu.org

     http://www.apwu.org/about/directory-officers.htm
    https://twitter.com/APWUnational  

  7. John Bonnie Says:
    July 30th, 2012 at 5:20 pm

    Then Issa should tell PMG to give the VER!

  8. Richard Says:
    July 30th, 2012 at 5:34 pm

    Before passage of the Postal Accountability and Enhancement Act of 2006 (“PAEA”), here are the financials numbers – 06′ net income $969M, 05′ net income $1.445B, 04′ net income $3.065B, 03′ net income $3.868B, 02′ net income loss ($676M), 01′ net loss ($1.680B), 00′ net loss ($199M), 99′ net income $363M.

    The statutory obligation to pre-fund retiree health obligations — which no other business or government agency bears — added $12.4 billion in costs to the Postal Service’s balance sheet from FY2007 to FY2009. During those same three years, the Postal Service had a cumulative net operating loss of approximately $11.8 billion. Thus, without the unique burden imposed by the PAEA’s pre-funding requirement, everything else equal, the Postal Service would have enjoyed a cumulative profit of $611M during those years.

    Once this artificially generated financial noose is removed from the postal service’s neck we can get on with helping it navigate the shoals of an uncertain future. To do this the postal service must build on its two most important assets: its ubiquitous physical infrastructure and the high esteem in which Americans hold it. In combination, these assets offer the post office an enviable platform upon which to build many new revenue-producing services.

  9. Blockpusher Says:
    July 30th, 2012 at 6:10 pm

    Great quote: CONGRESS SET THE POST OFFICE ON FIRE AND THEN TOLD THEM TO “PUT YOURSELF OUT!!!”

  10. rrhammer Says:
    July 30th, 2012 at 6:19 pm

    I’m trying to get a grasp on what number would be “satisfactory” for Issa concerning the “too little action to shrink the Postal Service’s workforce” part. How many employees does he consider to be enough to deliver mail across America everyday? 100? 500? 100,000? I’m not sure but didn’t we just get done shedding an army of employees while still trying get the same work done? Not to mention the fact he’d prefer the rest of us (except management) to get reduced to minimum wage (altho being a Republican, he probably isn’t happy w/ minimum wage either).

  11. PostalET Says:
    July 30th, 2012 at 8:24 pm

    The money that was supposed to go to “Future retirees for the next 75 years” actual went in the general fund. Congress has already spent that money the same way they tapped into Social Security, money that did not belong to Congress. Mr. Issa thinks it’s just a big game, trying to force long time employees out, then sell what is left of the post office to private companies. I say let the post office close for just one week. Idiots like Issa really have no clue what impact this would have on the economy. The public will be asking for congress’s heads on a platter!

  12. Marty Says:
    July 30th, 2012 at 9:03 pm

    Congressman Issa is a joke and a jerk!!! Truth be told I’d wager he or some of his behind the scene cronies would love to privatize the USPS because it would line their pockets! Just follow the money trail and you’ll find the truth. What other government entity pays it’s own way with no taxpayer monies? What other government entity is required to pay such a ridiculous payment for employees not even born yet or what private business for that matter? That would be a BIG FAT ZERO, just like Congressman Issa, a BIG FAT ZERO!!! Issa and evidently the majority of Congress sees the USPS as a cash cow and will not be happy until she is milked dry. Smart man, that Issa, NOT!!!! Talk about denial, YOU are the queen of denial and talk about kicking a can down the road, what an ironic statement, there is a can that needs kicking down the the road and it’s YOU Congressman Issa, it’s YOU!!!!!!!!

  13. Patrick Says:
    July 30th, 2012 at 9:30 pm

    Hey Issa, sure it will happen and November elections will too. See you on the unemployment line you scumbag Republican TRASH

  14. Leroy Berman Says:
    July 31st, 2012 at 12:53 am

    At present there are two bills before Congress that offer sharply contrasting approaches to fixing the problem. H.R. 1351 (the USPS Pension Obligation and Recalculation Act) would credit USPS for its overpayments and allow the agency to spend more of its own money to pay down its deficits, while still paying nearly $7 billion toward pensions and other costs. Although this bill has 230 House co-sponsors—a majority of the 435 House members—it is being blocked by Rep. Darrell Issa (R-California), who is chair of the House Oversight and Government Reform Committee, which has jurisdiction over USPS related matters.

    Issa prefers his own legislation, H.R. 2309, which would require the closing of hundreds of post offices, renegotiation of union contracts, and reduced delivery days. Issa, whose bill has only one co-sponsor, has accepted more than $35,000 in contributions from PACs and individuals associated with USPS competitor United Parcel Service.
    Wow and you wonder how this can happen!

  15. Molly Kelly Says:
    July 31st, 2012 at 1:28 am

    I live in Issa’s district and will be voting for Jerry Tetalman instead. Jerry is fiscally conservative, stands for energy innovation, mental health care for veterans, women’s rights, student loan forgiveness, and the closing of San Onofre. JerryforCongress2012.com

  16. gmant Says:
    July 31st, 2012 at 3:56 am

    Darrell Issa and his brother were cars theives. Then he claimed to have invented Lojack, probably stole idea from someone else, Then took out insurance on warehouse full of electronics, then it burns to the ground in 2 days after policy was taken out. Fire Cheif says it was arson. Darrell Issa is riches member in Congress. All behind illegal activity. Now he wants middle class workers to lose everything they have so he can get wealthier. You’ll never be a Warren Buffet, you IDIOT.

  17. Al D Says:
    July 31st, 2012 at 9:56 am

    After a year with “essentially no real reforms” and too little action to shrink the Postal Service’s workforce, he added, the result is that lawmakers are unwilling “to kick the can down the road, at least at this time.”

    Where’s the Clerk Craft’s early out. Too many clerks unassigned ( no jobs ). Why play musical chairs with moving us all over the country needlessly. Let us get out. Give us a buyout like the Postmasters and the Mail Handlers got. What’s the tie-up????

  18. mj Says:
    July 31st, 2012 at 11:21 am

    Can in road has been picked up for scrap.New cans are way too expensive and less demand mean fewer cans made. Can makers join unemployment lines. I luv Issa I luv Issa I luv Issa repeat 100 times then go smash your face on bathroom sink. Now you feel better ay. FYI do you really think the incentive payouts will be made in Dec 2012 and Dec. 2013 if P.O. is bankrupt?

  19. Lew Pons Says:
    July 31st, 2012 at 12:30 pm

    Don’t live in Issa’s district but have relatives who do. Jerry Tetalman seems like a great candidate and they are supporting him. However, when it comes to the smug EVIL Issa, I’d vote for a left shoe or an axe murderer before that p@#!%.

  20. Nina Malsch Says:
    July 31st, 2012 at 1:06 pm

    The requirement to pre-fund 75 years of benefits is only part of the problem. We are processing and delivering bulk business mail at a loss most of the time. The USPS has been advised of this more than once by auditors. UPS drops a truckload of packages at our office everyday, and we deliver the parcels for them. UPS is making money and we are going broke because we do the labor intensive work . They just rake in the money. Look at the ratio of “management” to workers. No business could exist with 4-5 managers for every worker. I believe this whole thing is a Republican bid to privatize mail service. I have been a carrier for 40 years and have never felt so raped. Thanks Issa! Thanks Republicans. I hope you get just a part of what you are dishing out.

  21. Anttila Says:
    July 31st, 2012 at 3:05 pm

    I find it odd that duly elected government officials such as Rep. Issa, would rather provide money to defense projects, and get behind candidates who know that the last military involvement wasn’t about keeping people safe, it was about creating a war, and employing San Diegans.

    The issue however, is the lone gunman who shot 24 Colorado Moviegoers last week was from Issa’s district. It seems that defaulting the Postal Service is first, and probably the schools next, because if Issa properly invested in education, people wouldn’t go postal at the movie theater.

    Take it for what it’s worth, but merely accepting a Government Service such as Postal Service as perhaps “old” and “outdated” makes me wonder what Darryl Issa would do next, when we find that Military Involvement for fake wars, is a legacy that needs to retire, like himself.

  22. Frank B Says:
    July 31st, 2012 at 5:40 pm

    So, now we see what the majority party controlling one chamber of the legislative branch can do to an American institution, the USPS. And this same party is in the process of trying to buy the other chamber (Senate) and the Executive Branch. Anyone care to guess what a disaster that will be for our country. Their motives, and their plans, are all to obvious. They are driven by ideology and could care less about what’s important to our citizens. Think long and hard before you vote this November. It could be your special interest(s) on the block next.

  23. Joey Watts Says:
    August 1st, 2012 at 4:02 am

    http://apwulocal170.org/ ARNIE COWELL

    See how this large local union president said it all, those who have a future in the USPS, is all the APWU is fighting for.
    PMG can go ahead with VER !

    7/19/2012 – Early Outs:
    Let me try to explain to you members who keep asking about the early-outs. I have written before that President Guffey will not negotiate any early outs until the Postal Service gives us the jobs back that were negotiated in the contract. Management still continues to violate the collective bargaining agreement at will. The Union has no obligation to negotiate an early out. He, President Guffey, is trying to save jobs. Isn’t that what a union is supposed to do? Incentives are not the top priority. The members who still have a future with the Postal Service are the main concern. Incentives are not a right or are they earned or owed. They are to eliminate jobs that we can’t afford to lose. So until management gives us our work back don’t be looking for any incentive anytime soon.

    And below we see a real Union, who realizes that a downsizing ( putting it Mildly) is upon us, and want to save jobs for those who still have a future and/or do not want to go.

    The agreement with the Postal Service is intended to provide a financial cushion, and added peace of mind, for Mail Handlers who might be prepared to move on to the next chapter of their lives by leaving the Postal Service – a decision that could be particularly trying during these difficult economic times. In addition, with many closings and consolidations expected to be implemented at mail processing facilities in August 2012 and February 2013, the MOU also will benefit remaining Mail Handlers to the extent that some Mail Handlers choose to retire because of this incentive. More specifically, remaining Mail Handlers will experience less excessing and will benefit from more landing spots if excessed, more bidding opportunities, and other results of reduced staffing.

    communications@apwu.org

     http://www.apwu.org/about/directory-officers.htm
    https://twitter.com/APWUnational  

  24. Magnet Mailer Says:
    August 1st, 2012 at 9:16 am

    Looking around, it seems most media is reporting the USPS default as ‘the Post Office not being able to pay its obligations to its employees’ (because of decreasing demand for mail yaddy yadda…) How come the real story — that these billion dollar payments were conjured up by Congress and far outweigh the USPS retirement obligation — is being missed so much?

  25. Skye Shepard Says:
    August 1st, 2012 at 10:46 pm

    I would call Issa’s public statement about the USPS a ‘self-fulfilling prophecy,’ wouldn’t you? Come on! It’s SO OBVIOUS what these people are doing behind the scenes, under the table, or however you want to refer to it.

    Since the lawmakers failed to do their jobs is why this is happening, it really has nothing to do with the failure of the USPS to reduce it’s employees more. These people who we call our ‘lawmakers’ are really just politicians who have sold their souls and our whole country. How can Issa be so ‘positive’ of all he spews? Because he and his cronies are the culprits of the runination of the USPS, that and the Potter/Donahoe era. It’s getting more and more obvious that the politicians have absolutely NO INTENTION of addressing problems that they have known about for years.

    Thanks Issa and the rest of you people who rake in huge somes of money while you toy with hundreds of thousands of peoples’ lives. For your messing with the employees of the USPS is also messing with the American public. Your days are numbered.

  26. Mark Says:
    August 2nd, 2012 at 2:32 pm

    In the real world, I believe its called misappropriation of funds, and is a criminal offense, using the retirement funds for the national debt. Everyone who was in office at the time, should be arrested , and those who knew of the way the money was being spent and said nothing should be charged as co conspirators.

    Mr. Issa needs to remember, not everyone has a computer and internet service. Think with your brain, not your wallet.

  27. RICHARD LEMAY Says:
    August 2nd, 2012 at 3:46 pm

    WHY BLAME ISSA LOOK AROUND THERE ARE TWO AT FAULT. A POSTAL SERVICE THAT PAYS MILLION IN GREVIENCES LIKE WATER,2 CONGRESS THAT WILL NOT WORK TOGETHER BOTH DEM AND REP ARE TO B;AME NOT JUST ONE

  28. Tom Says:
    August 2nd, 2012 at 8:34 pm

    Love #2

  29. Randy F Says:
    August 5th, 2012 at 10:06 pm

    Boehner admits Postal “crisis” is phony.

    http://postalnews.com/postalnewsblog/2012/08/05/boehner-admits-postal-crisis-is-phony/

    Somebody ought to tell that Issa-Hole about his party leadership finally admitting the truth.