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Washington, D.C.—President Colleen M. Kelley of the National Treasury Employees Union (NTEU) has taken sharp issue with a plan by the Treasury Department’s Bureau of the Public Debt (PBD) that would significantly curtail the proven, successful method of marketing savings bonds—a savings instrument held by more than 55 million Americans.

BPD told NTEU at a meeting today it is planning to substantially reduce the approximately 115 employees in its Savings Bond Marketing Office (SBMO) so that it can force customers to use the Internet to purchase savings bonds. Under the plan, the bargaining unit would be reduced to some 40 employees, and the number of staffed offices would be reduced to four.

SBMO employees are located in small one- and two-person offices around the country, working with schools and community-based organizations, and acting as liaisons with corporations and other employers in setting up and operating payroll savings bond programs.

“For sixty years, the savings bond program has been the first step in savings for a great many Americans,” President Kelley said, “and has been their introduction and gateway to other forms of savings and investments. This is a penny-wise and very foolish idea, and it should be dropped immediately.”

Ending SBMO’s participation in various community partnership and cooperative programs, Kelley added, “would significantly hurt efforts to improve the financial knowledge and exposure to savings of

young and disadvantaged Americans.”

BPD is a key part of the nation’s financial management system, both raising money for governmental functions and keeping strict track of the debt. It raises funds by selling hundreds of millions of dollars worth of debt instruments to the major securities dealers and financial institutions that are regular customers at Treasury auctions—and by selling savings bonds to individuals.

The savings bond program as it has been constituted for many years, President Kelley said, has served Treasury well in pursuit of its primary objective of meeting the financial needs of the government at the lowest costs over time.

Treasury’s own calculations, she said, show that for every $1 billion borrowed through Series EE and Series I savings bonds, $17 million is saved in comparison to costs associated with marketable securities.

“We have an excellent community- and school-based program that has worked very well for a long time, staffed by dedicated and experienced people,” the NTEU leader said. “It is beyond me why we would want to move away from that, with inevitable adverse impacts on a wide range of people, including parents and grandparents who frequently have chosen savings bonds as a way to introduce young people to the important habit of savings.”

NTEU is the nation’s largest independent federal union, representing some 150,000 employees in 26 agencies and departments, including about 1,250 in BPD and SBMO combined.