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September 21, 2023

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Saving the Postal Service
Updated On: Sep 22, 2011

          Yet another newspaper article, citing the potential problems that would arise for small communities should the Postal Service close their Post Office, appeared in the paper Monday. And, as usual, it recited the stock assertion that the dismal economy and the advance of email have caused the Postal Service’s present financial crisis. And this article failed, as so many do, to look critically at what is actually happening in the Postal Service today.
          The financial problems for the Postal Service have certainly been exacerbated by today’s economy – just as this economy has sorely tried so many industries. But that is not the root cause of the crisis in the Postal Service. Nor – contrary to easily repeated cliches – is the use of email and other electronic communications the cause of today’s Postal Service impending disaster. Certainly mail volume has been affected by electronic media. However, long after these other forms of communications had become widespread, in the middle of this past decade – 2005, 2006, 2007 – the Postal Service was handling the highest mail volume of its entire history.
          The Postal Service’s financial demise has been, instead, the direct result of Congressional action and its own acquiescence to the mailing industry. The Postal Service established a mailing rate discount for large volume pre-sorted mail that has actually cost the Postal Service for its handling of this mail. It has been the Postal Service that has driven the development of high speed mail processing equipment – from relatively simple canceling machines, to mail sorting machines that employ the most sophisticated bar code and optical character recognition technology. And that machinery is also utilized by the large mailing industry presort houses. While mail volumes that made it difficult at times for the Postal Service to meet its own service standards may have implied that having mailers perform pre-sortation work was a good idea, the postage discounts given to those mailers did not. Instead of simply reflecting cost avoidance, these discounts caused the Postal Service to actually lose money on the handling of this mail. If the Postal Service eliminated the excessive discounts for this pre-sort mail, it could perform the sortation and further processing of the mail at cost benefit to its own operations. Yet even with this loss of revenue, the Postal Service flourished – at least until Congress took action. And even with this loss of revenue, the Postal Service would have operated in the black for the past five years were it not for an act of Congress.
          In 2006 Congress passed and President Bush signed the Postal Accountability and Enhancement Act (PAEA). Apart from placing further impediments on the Postal Service’s ability to regulate its own fees for services (i.e., postage rates), this act placed on the Postal Service an onerous financial obligation truly unique. No other governmental agency has ever been so required, nor is any private sector business obligated in the manner Congress demanded of the Postal Service. Congress had already obligated the Postal Service to make higher than necessary contributions into the funding of federal pensions for postal employees. Now, in the PAEA, Congress decided that the Postal Service would be required to fund the future 75 years of retiree health benefits by annual payments to be completed in just 10 years – at a rate of about 5.5 billion dollars annually. Although the overfunding of federal pension accounts over the years (the earlier Congressional mandate) cost the Postal Service about 75 billion dollars – now held by the federal government – in excess of its actual liability, it has been the additional, unique retiree health benefit funding at 5.5 billion dollars annually that is the immediate cause of the Postal Service’s impending demise.
          This is most certainly a manufactured crisis. And its existence is now being manipulated to frighten the American public into thinking that anything – anything – that will salvage some semblance of their revered U.S. Mail would be worthwhile. Even if it means handing the whole business of transporting and processing the mail over to private enterprise, if it will save their own Post Office, it would be worth it. The existence of this manufactured crisis also has given the radical right a new platform from which to attack unions, claiming that the cost of having workers protected by collective bargaining is too much for the Postal Service to have to bear. Never mind that the Postal Service was surviving quite well for nearly forty years in a collective bargaining relationship with the unions who represent postal employees, through several recessions and even in spite of milder Congressional interference.
          The disaster Congress created, it must resolve. And Congress cannot be allowed to resolve it by destroying the Postal Service itself. Originally the Post Office Department, later converted into the wholly owned federal agency Postal Service, this institution is established in the Constitution of the United States and has always served the primary function of ensuring universal communication service to and by the American public. It is owned by the American people and has been fully self-supporting (i.e., no tax money) since becoming the U.S. Postal Service forty years ago. It is one of the largest single-entity employers in the country, providing its workers decent middle class earnings that reach into and support the economies of every city, town and hamlet in the United States.
          Unfortunately, this Congressionally created crisis is bringing together anti-union, anti-government, and pro-privatization ideologues in Washington; and they are marshaling their forces behind the Darrell Issa proposed legislation, H.R. 2309. This bill, if enacted, would spell the end of the Postal Service as the public service it has always been. On the other hand Steven Lynch’s proposed legislation, H.R. 1351, would simply allow the Postal Service to resolve its future retiree health benefit obligation by recouping funds from the 75 billion dollars of overpayments into the pension funds – that is, solve the cash flow problem without costing the Postal Service, the federal government or the American people one penny – and it would not mandate changes to the Postal Service’s institutional structure.
          Only time will tell. But, believing the American people would really prefer to keep their “Post Office” as it is, we cannot allow radicalism and greed to steal the Postal Service from the public to whom it belongs.

Donald L. Foley
Maintenance Craft NBA, retired

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