USPS to cut workforce, benefits

The U.S. Postal Service is looking to cut its workforce and change employee benefits in an attempt to cap a financial crisis, officials say.

However, to meet its goal, the USPS would have to circumvent union contracts that prohibit layoffs by petitioning Congress, The Washington Post reported Thursday.

In a letter to employees, the postal service said "we will be insolvent next month due to significant declines in mail volume and retiree health benefit prefunding costs imposed by Congress."

USPS needs to let go of 120,000 employees, 20 percent of its workforce, by 2015, in addition to 100,000 expected leave through regular attrition in coming years. The agency is also looking to drop from the federal health and retirement plans that cover federal employees and create its own benefit program for postal workers.

In a draft of the proposal to be sent to Congress, the postal service says "asking Congress to eliminate the layoff protections in our collective bargaining agreements is an extraordinary request by the Postal Service, and we do not make this request lightly. However, exceptional circumstances require exceptional remedies.

"The Postal Service is facing dire economic challenges that threaten its very existence. . . . If the Postal Service was a private sector business, it would have filed for bankruptcy and utilized the reorganization process to restructure its labor agreements to reflect the new financial reality."

American Postal Workers Union President Cliff Guffey said, "The APWU will vehemently oppose any attempt to destroy the collective bargaining rights of postal employees or tamper with our recently-negotiated contract -- whether by postal management or members of Congress."

Fredric V. Rolando, president of the National Association of Letter Carriers said: "The issues of layoff protection and health benefits are specifically covered by our contract. ... The Congress of the United States does not engage in contract negotiations with unions and we do not believe they are about to do so."

Banks prepare for federal cash crunch

U.S. banks are preparing for the possibility that millions of federal checks will be delayed if Congress fails to raise the debt ceiling, officials say.

"Every bank is doing things their own way to take care of their customers," Richard Hunt, president of the Consumer Bankers Association, told The Washington Post. "Obviously, they hope this deal is done quickly."

If the government is unable to borrow to cover expenses, it would depend on cash on hand to cover everything from Social Security checks to paychecks for military personnel and federal employees. The Treasury Department has said the cash crunch could come as soon as Wednesday if Congress fails to act by Tuesday.

Navy Federal Credit Union's plans include advancing pay to direct-deposit customers on active military service and Defense Department civilian employees. Officials say the credit union, the biggest in the United States, will speed approval for overdraft protection and higher credit card limits.

The Office of the Comptroller of the Currency plans to issue guidelines for the nationally chartered banks it regulates that would protect customers from high fees for bounced checks or overdrafts.