The Postal Crisis: Manufactured Myth

IndyInfo Article: October/December Issue under the title “The Postal Crisis: The Issues”
see also previous post/article here: “The Postal Crisis: The Issues

Is It the Recession?

Whenever the Postmaster addresses Congress, makes a video or gives an interview it is sometimes hard to tell if he’s trying to save the post office or sell it off. Blame it on the recession, low volume or the internet one minute then blame it on labor cost, manpower the next.

  • The problem is that the economy and mail volume are cyclical which means that they will recover. Maybe not to past levels but the idea that we dismantle and gut the postal service makes little since.
  • The internet may have an impact but it is greatly exaggerated. Pointing out that 50% of households have internet access ignores the fact that the access is usually in the hands of the junior members of the households who are playing games, downloading music and socializing with people they were never going to mail a letter to anyway. Most online banking is online in the sense of your connection to the bank, but when it comes to the bank making the payment much of the time their still cutting a check and mailing it. In addition where 1st class letter volume is down package volume has increased because of the internet and as the economy improves online purchases and advertising mail will increase rapidly. The question if we dismantle our infrastructure now will we be able to handle the increase in the future?
  • In spite of increased productivity over the last decade postal workers have not engaged in any job action since 1970. We’ve done our job and followed the contract even as management has violated it to the tune of millions of dollars. Contracts have been negotiated or resolved in arbitration. We never flinched during the anthrax attacks. Our pay increases have been modest and we contribute to our health insurance and retirement. Our retirement funds have big surpluses. In spite of a reduction in force through VERAs and attrition we have increased our productivity in the face of excessing and other stressful conditions. So to blame labor for the current crisis is disingenuous.

It is interesting that everything the Postal Service is asking Congress for and everything that the Congressional right-wing is advocating for has been on their agenda over the last 10-30 years! Apparently the recession driven drop in volume is a convenient catalyst to their public argument that the post office is poor performing, bloated and wasteful in spite of the fact that it is the only successful self-sustaining government entity in this countries history.

As problematic as some of the items mentioned above are they do not require the dismantling of the Postal Service, nor do they warrant the attacks on postal workers and their collective bargaining rights. The post office can weather those storms and continue on.

It Is Not The Recession.

To understand how we got here, where things have gotten so bad so quickly, you need to strain your memory and remember all the bad decisions and choices upper management has made since you have been at the Post Office. You then have to look at all of the political attacks that have occurred through the Presidents Commission on Postal Reform, Senate Bill 1507, etc. and most importantly the Postal Accountability and Enhancement Act of 2006 (PAEA).


Now compare how things have changed:

  • We’ve cut manpower to the bone and run the station and branches with skeleton crews as the lines in the lobby get longer and longer.
  • We’ve seen commercials that discourage customers from going to their post office, actually portraying a visit to the post office as a nightmarish journey.
  • As we’ve increased productivity and automation we continually lower our service standards. We use to emphasis getting the mail from one point to the next as quickly as possible. In the process we would take observational counts to measure our productivity. Remember counting and weighing mail? But now we put the emphasis on counting the mail to make productivity and when we’re done counting it then we move it along.
  • It is routine for mail to sit, the machines to sit idle, and the employees who run the machines to stay busy working the mail by hand until the mail backs up enough to get a good ‘production’ count on the machines.
  • We use to keep classes of mail separate, but more and more we are intentionally, whether proper or not, mixing the mail.

Now add the observations above, your knowledge of the inaccuracy and misleading statements from politicians and consider this:

How Privatization Works:

  1. First the privatizers float the idea of privatizing a government service.
  2. If the public is supportive of the idea its full speed ahead.
  3. If the public opposes the idea then the privatizers back-off publicly.
  4. But behind the scenes they orchestrate the demise of the service by attacking it, underfunding it, under manning it, restricting it, and legislating it until the service becomes so bad that the public starts to accept the idea of privatizing it.

Sound familiar?

What The PAEA Did:

From 2003 to 2006 the postal Service was performing in the black, profiting. From 2003 to 2006 there were no stamp increases.

In 2006, the Republican Congress passed and the Republican President signed into law PAEA. This required the Postal Service to pre-fund its retirees health benefits (RHB) far into the future. The formula for computing the payments was so excessive that if it had been in effect the previous three years it would have wiped out those profits which occurred during record levels of volume and no recession.

In 2007, the first year under the draconian PAEA the postal service went from a 900 million profit to a 5.1 billion deficit. This was pre-recession. Additionally any drop in volume for that year would not have led to any losses because if you remove the RHB payment from that year the Postal Service would have realized its second most profitable year of the decade.

There is little doubt that the recession and the drop in volume would eventually have an impact but the biggest figure on the board is RHB payments. Without them the Postal Service would not be approaching its debt limit which is what triggers the ‘bail out’ propaganda.


Is It About Privatizing?

Since President Ronald Reagan floated the ideal of Postal Privatization it has been out there, it has not gone away it has just gone unnoticed. It has been the great conspiracy to unionist and the mythical 'boogie-man' to skeptical postal workers, but the threat is real.

Most postal workers see little logic in the ideal that any private company would want to take over any of the non-revenue producing postal operations. It doesn't make since to privatize when the majority of operations would have to go back on the tax roles as the few revenue producing operations were sold off. But it doesn't have to make since it just has to make money for the special interest. An uninformed public would be none-the-wiser.

While some privatization of some government services does make since most of it is a smoke screen for creating profit opportunities at the expense of government services. The privatization of the postal service would not necessarily be a case of revenue generating operations being sold off to profiteers and the postal workers who survived the lay-offs being moved to non-revenue operation as government paid postal employees.

The ideal that corporate America could not find a way to make money off of the non-revenue generating operations such as transportation and plant operations is short sighted. Evidence of how it could be done is already in existence, it’s called sub-contracting.

The privatization of the postal service could create an industry that would rival the military industrial complex of the cold-war era. Postal employees who are gambling on surviving the take-down of the post office are going to be in for the same shock that tax payers will realize when the dust settles.

I have gone through privatization before (as a city employee), but I don't have a crystal ball, so I can't say exactly what will happen. I can only speculate what might happen and tell you that while the above is a worst case scenario I can guarantee you that privatization is never fair, seldom predictable and always politically motivated. The threat is real and all you have to do to see it is look at the logic and implementation of the PAEA, its devastating effect on our revenue and the never ending right-wing assault on unions, public employees and the Postal Service.

While I am willing to go deeper into the motives behind privatization and other ways it could play out those are arguments for another article at another time.


The Attacks Continue: H.R.2309

On September 21, 2011 the House Postal Subcommittee passed H.R.2309 out of the subcommittee. The vote was 8-5 with all 8 Republicans voting for the bill (including Rep. Dan Burton (R-IN)) and 5 Democrats voting against. The bill was co-Sponsored by the House Committee on Oversight and Government Reform Chairman Darrell Issa (R-CA) and the sub-committee chair Rep. Dennis Ross (R-FL) both Republicans.

Passage of the original bill would have had a devastating effect on the Postal Service as we know it and would do little to fix the main source of the Postal Services woes, the PAEA of 2006. But to make matters worse prior to the vote Rep. Issa amended the bill to include even more controversial provisions than the original bill.

That amended provision grants authority to a newly-established control board to carry out layoffs, overriding the no-layoff protection contained in postal union contracts.

“In addition, it says that employees who are eligible for retirement must be laid off before employees who are ineligible, and dictates that retirement-eligible employees with the longest service must be separated first. The new language also forbids the payment of severance pay to retirement-eligible employees.”

APWU News Bulletin 22-2011, Sept. 21, 2011

The bill also creates two unelected entities that would have the authority to carry out lay-offs, cut pay and reduce benefits. These entities would circumvent Congressional oversight and our collective bargaining rights, i.e., the contract.

see also:

Page 5: Commentary
HR 1351

H.R. 1351 Fact Sheet:

H.R. 1351 takes the necessary first steps toward ensuring a financially sound future for the United States Postal Service. The bill was drafted with three major components:

  1. It calls on the OPM to recalculate the USPS surplus in the Civil Service Retirement System within six months of enactment, using a methodology that fairly allocates the cost of pensions between the Post Office Department and the U.S. Postal Service.
  2. Then, once the accurate “postal surplus” is determined by the OPM, the agency would have 15 days to transfer the surplus to the PSRHBF.
  3. Direct the OPM to permit the USPS to use most of its $6.9 billion surplus in the FERS system to satisfy two obligations in FY 2011: a $5.5 billion payment due to the PSRHBF, and a $1.2 billion estimated payment to the Department of Labor for Federal Employees Compensation Act (workers comp.) expenses.

Any remaining funds would be used to reduce the Postal Service’s normal cost-percentage for FERS in future years.

H.R. 1351 does not address the legally mandated pre-funding payments into the PSRHBF beyond the FY2011 payment, which costs the USPS $5.5 billion annually. Rather, it simply fixes the massive over-funding to the postal CSRS and FERS accounts. Additional legislation would be necessary to repeal the future scheduled pre-funding payments to the PSRHBF.

Additionally, the date of the transfer for the overcharge is less important than the acknowledgment by Congress and the OPM that the USPS has sufficient assets to cover all its retirement obligations — for both pensions and health benefits. Since the PSRHBF already has more than $42 billion in it, and since the surplus transfer from the CSRS pension fund would likely leave the PSRHBP fully funded, passage of H.R. 1351 makes an irrefutable case for the repeal of the pre-funding payments called for by current law.

The Lynch bill would transfer surplus CSRS and FERS assets paid for by ratepayer and employee contributions — not taxpayer funds — to the Postal Service’s retirement health fund, and it would have absolutely no effect on any current or future federal retiree’s annuity.

From the NALC website

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