Hovering on the brink of insolvency, the U.S. Postal Service wants to break its union contracts to cut 20% of its workforce and withdraw its employees from federal worker healthcare and pension plans, according to a Washington Post report published this afternoon.Without a major financial restructuring, the USPS will be broke by next month, the Post reports. The agency is now seeking Congressional approval to break its labour contracts, which prevent layoffs, and create it’s own benefit plan for postal workers.
The USPS has lost $5.7 billion this year and is on track to exceed its projected $8.3 billion deficit. The agency has already stopped making its congressionally-mandated contribution to the federal worker benefit system.
USPS has taken drastic steps to slow its financial hemorrhaging, cutting more than 100,000 positions over the past four years. Last month, the agency announced plans to close more than 3,000 post offices across the country. The Post Master General has also called for halting Saturday delivery. But declining mail volume and rising pension costs have bled USPS dry.
The agency’s financial proposals will doubtlessly face intense opposition from federal worker unions. If Congress does approve allow USPS to unilaterally restructure its collective bargaining agreements, the decision could have a widespread ripple effect for federal employees and public-sector workers across the country.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.