Well, after doing some digging, I found out that the issue is not prefunding pensions. I know, it's shocking that the OP could possibly be wrong on a subject, but it happened just this one time and probably never again.
The real issue is not pensions, but future retiree's health care benefits. Those mean and nasty Republicans want the Postal Service to fund them on an actuarially sound basis, while the USPS (both management and the union) would prefer a "pay as you go" plan. The
GAO has said:
GAO has reported that Congress needs to modify the U.S. Postal Service's (USPS) retiree health benefit payments in a fiscally responsible manner. GAO also has reported that USPS should prefund any unfunded retiree health benefit liability to the maximum extent that its finances permit. Deferring funding for postal retiree health benefits could increase costs for future ratepayers and increase the risk that USPS may not be able to pay for these costs.
The problem with "pay as you go" is
that mail volume has been declining:
Total mail volume was 158.4 billion pieces compared to 159.8 billion pieces a year ago. Package and Standard Mail volumes grew by 210 million pieces and 1.4 billion pieces, respectively, while the most profitable product, First-Class Mail, fell by 2.8 billion pieces, led by single-piece volume decline.
Revenues were up in the fiscal year ended 9-30-13, but that was the first increase in five years:
Operating revenue, excluding a $1.3 billion non-cash change in an accounting estimate, was $66 billion compared to $65.2 billion in 2012. While this is the first growth in revenue since 2008, declining First-Class Mail revenue continues to negatively impact financial results.
Assuming the longer-term trend continues and the Post Office revenues decline, then you have a double-whammy: declining income and increased medical benefit expenses, especially as the Baby Boom postal employees retire.
While it is easy to understand why management wants to kick the can down the road, why is the union going along? This gives a hint:
Savings from plant consolidations, restructuring hours at Post Offices, reductions in delivery units, and workforce optimization resulted in approximately $1 billion of savings in 2013.
And I'm sure the union's backup plan is that the federal government bails out the plan. Which may explain why the evil Republicans aren't going along.
Here's a
Huffington Post report on the subject, which is very sympathetic to the USPS pay as you go proposal. But get this detail:
Since 2006, Congress has forced the Postal Service to make enormous annual contributions into a fund for future retiree health benefits, including the $5.5 billion and $5.6 billion mentioned above. In fact, since they began, these payments have accounted for more than 80 percent of the Postal Service's losses.
But 20% of their losses are due to other factors; the Post Office hasn't turned a profit since 2004.