Going Postal in Washington, D. C.: The USPS, the Postal Accountability and Enhancement Act of 2006, Union Busting, and Paving the Road to Privatization

Submitted by Elaine Magliaro, Guest Blogger

Here are some questions for you:

– Do you know how the United States Postal Service (USPS) is funded?

– Do you know why the USPS is having such serious financial problems?

– Would the closing of more than 200 postal processing centers and more than 3,000 post offices across this country, eliminating Saturday mail delivery, and cutting more than 100,000 postal jobs be the best way to save the USPS?

– Would slowing down mail delivery help the USPS to take in more revenue?

– What would happen to rural communities if their post offices were closed?

– What do you know about the Postal Accountability and Enhancement Act of 2006?

– Have you heard about H.R. 1351?

Yes, the USPS is experiencing serious financial problems. I’ve heard on the news and read in the papers that drastic measures must be undertaken in order to save this great American institution. I think that it’s important to understand the causes of those problems and to know what could happen to the US Postal Service unless Congress solves them without severely impacting the institution and the services it provides to Americans.

Josh Eidelson’s Salon article Congress’s war on the post office: The Postal Service faces a threat greater than email or economics: Politics (March 14, 2012) helps provide some information on the issue:

The U.S. Postal Service is at risk of defaulting on healthcare obligations or exceeding its debt limit by the end of the year. Last month, USPS management unveiled a “Path to Profitability” that would eliminate over a hundred thousand jobs, end Saturday service and loosen overnight delivery guarantees. The Postal Service also proposes to shutter thousands of post offices.  “Under the existing laws, the overall financial situation for the Postal Service is poor,” says CFO Joe Corbett.  Republicans have been more dire, and none more so than Oversight Committee Chairman Darrell Issa, who warned of a “crisis that is bringing USPS to the brink of collapse.”

Listening to Issa, you’d never know that the post office’s immediate crisis is largely of Congress’s own making.  Conservatives aren’t wrong to say that the shift toward electronic mail – what USPS calls “e-diversion” – poses a challenge for the Postal Service’s business model.  (The recent drop-off in mail is also a consequence of the recession-induced drop in advertising.)

But even so, in the first quarter of this fiscal year, the post office would have made an operational profit, if not for a 75-year healthcare “pre-funding” mandate that applies to no other public or private institution in the United States.

Warren Gunnels, aide to Sen. Bernie Sanders, calls that mandate “the poison pill that has hammered the Postal Service … over 80 percent of the Postal Service deficit since that was enacted was entirely due to the pre-funding requirement.”

This death hug was part of the Postal Accountability and Enhancement Act, which was passed on a voice vote by a lame duck Republican Congress in 2006… 

As reported by CNN, the USPS has claimed that a number of its difficulties were caused BY the federal government “ through a law governing how the agency funds workers’ retirement health benefits.” It has also been reported that prior to 2007—when the mandated prefunding of healthcare benefits began—the Postal Service actually generated a small profit.

The act/law referred to above required that the USPS prefund retiree healthcare benefits for workers for the next 75 years…in just ten years (2007-2016). That means the USPS has to continue to cough up $5.5 billion annually to meet the funding mandate for another five years. No other government entity or agency has been required to do the same by Congress. Why has the Postal Service—an institution that provides valuable services to businesses and to millions of Americans—been singled out?

Allison Kilkenny thinks that the people who are working to destroy the USPS as we know it are motivated by a desire to bust the strongest union in the country and to help pave the road to privatization. She wrote the following in a Truth-out article titled Postal Workers: The Last Union:

The recent attacks against the United States Postal Service (USPS) are more than signs of desperate times – a natural sunset moment for a service rendered archaic by FedEx and UPS. Rather, the Postal Service has been under constant, vicious assault for years from the right, who views this as an epic battle with the goal of finally taking down the strongest union in the country, the second largest employer in the United States (second only to Wal-Mart,) and a means to roll the country ever closer toward the abyss of privatization. The Postal Service, which is older than the Constitution itself, stands at a precipice. If this great institution, which provides one of the oldest, most reliable services in the country, is permitted to fall and Congress kills its great union, then truly no collective bargaining rights, no worker contract, no union will be safe within the United States.

As the USPS spirals toward default, the historically uncontroversial mail service system has suddenly become a hot-button issue. It’s an unlikely organization to inspire such hysteria. The Postal Service isn’t paid for by taxpayer dollars, but rather fully funded by the sale of stamps. It’s easy to forget what a marvel this is – that today, in 2011, one can still mail a letter clear across the country for less than 50 cents. And if the impressiveness of that feat still hasn’t sunk in, attempt this brain exercise: consider what else you can buy for $0.44.

It was only a few years ago that the USPS was considered not only stable, but thriving. The biggest volume in pieces of mail handled by the Postal Service in its 236-year history was in 2006. The second and third busiest years were in 2005 and 2007, respectively. But it was two events: one crafted during the Bush years and another supervised by House Oversight Committee Chairman Darrell Issa that would cripple this once great institution.

Allison Kilkenny Talks with Sam Seder about the USPS on Countdown (9/9/2011)

Cliff Guffey, president of the American Postal Workers Union, believes that the law would do more than “cripple” the USPS. He believes it was designed “by those people who hate government … to destroy the Postal Service.  And that’s what they did.”

In addition to requiring the Postal Service to prefund retiree healthcare benefits, Josh Eidelson said that the law also limits the institution’s capacity to change and grow with the times: “The new law also restricted the Postal Service’s ability to raise postage rates, or to provide ‘nonpostal services’ that, in an e-diversion era, could be key to its future.”

Matt Taibbi wrote on his Rolling Stone blog that barring the USPS from offering “nonpostal services” means that it can’t “open up a bank, or an internet cafe, or come up with any new entrepreneurial ideas to generate new income, as postal services do in other countries.”

Like Kilkenny, Taibbi thinks that the purpose of the law—pushed by lobbyists—“was to break a public sector union and privatize the mail industry.” Taibbi added, “Post offices also have a huge non-financial impact: In a lot of small towns, the post office is the town, and shutting them down will basically remove the only casual meeting place for people in mountain areas and remote farming villages and so on…This is a classic example of private-sector lobbyists using the government to protect its profits and keep prices inflated.”

From a special report on the USPS post office closings published by Reuters earlier this year:

Some of America’s poorest communities – many of them with spotty broadband Internet coverage – stand to suffer most if the struggling agency moves ahead with plans to shutter thousands of post offices later this year, a Reuters analysis found. Nearly 80 percent of the 3,830 post offices under consideration are in sparsely populated rural areas where poverty rates are higher than the national average, demographic data analyzed by Reuters shows…

The Postal Service is not studying the economic impact on communities where post offices are slated to close, spokesman David Partenheimer said. But in the 3,004 rural communities across 48 states where post offices may close, many residents fear the impact will be pronounced.

About 2.9 million people live in the rural communities where the post office that may close is either the only one or one of two post offices serving their zip code area. For many rural residents, that would translate into longer drives to mail packages, pay bills or buy stamps.

According to Postal Reporter News, in February the USPS “informed tens of thousands of employees that it plans to close mail processing facilities. The decisions are not final. No closings will occur before May 15. Postmaster General Patrick Donahue agreed to that timetable under moratorium proposed by Sen. Bernie Sanders to give Congress time to act.” Sanders said the USPS’s plan is “deeply flawed” and that Congress must change it. He said that he expected “comprehensive postal reform legislation to be on the floor of the Senate within the next few weeks.” He added, “At a time when the Postal Service is competing against the instantaneous delivery of information from email and the Internet, slowing down mail delivery service will result in less business and less revenue, and will bring about a death spiral for this institution which is so vitally important for all Americans.”

Sanders continued, “A critical weakness of the current Postal Service plan is that it ignores the onerous financial burden being placed on the Postal Service by $5.5 billion a year in pre-payments for future retiree health benefits. According to the Postal Service inspector general, those payments are no longer necessary because of the $45 billion which that account already has accumulated. The Postal Service needs to be reformed not by massive cuts, but by a new entrepreneurial business model which expands the products and services the post office can sell in the 21st century digital age.”

In the following video, Senator Sanders speaks about ways in which the USPS could be modernized and provide additional services to customers that it doesn’t provide today:

There are other members of Congress like Sanders who are trying to find ways to help save the USPS. One of them is Rep. Stephen Lynch of Massachusetts. On April 4, 2011, he—on behalf of himself and Elijah Cummings of Maryland— introduced H.R.1351: United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011. This bill would “amend the provisions of title 5, United States Code, relating to the methodology for calculating the amount of any Postal surplus or supplemental liability under the Civil Service Retirement System, and for other purposes.”

From the NALC FACT SHEET (National Association of Letter Carriers):

Lynch’s bill once again takes a big step toward making sure the Postal Service is treated in a fair and equitable manner, allowing it to overcome the very difficult financial challenges it currently faces. In addition to addressing the CSRS overcharge, H.R. 1351 also deals with the more recent finding regarding another overcharge to the USPS related to the Federal Employees Retirement System (FERS). Even so, H.R. 1351 only addresses the CSRS and FERS overcharges and does not repeal the onerous, legally mandated, annual pre-funding payments into the Postal Service Retiree Health Benefit Fund (PSRHBF)…

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.

Mark Anderson wrote the following in The Daily Cougar last September: “Currently, a 44 cent stamp will get a letter from Houston to New York in two to three days. According to the FedEx website, two-day delivery of a similar letter to the same destination will cost between $20-30 dollars.”

Shock Doctrine at U.S. Postal Service: Is A Manufactured Crisis Behind Push to Privatize? (Democracy Now)

How the Right Wing Destroyed the U.S. Postal Service (Majority Report with Sam Seder)

I wonder if most Americans would prefer to send mail via the USPS—or by FedEx. I wonder if most Americans would like to see our Postal Service privatized. I wonder how many Americans would like to see post offices in their cities and towns shuttered. I wonder how many Americans would like our elected representatives to find solutions to the problems facing the USPS that won’t include drastically reducing the number of postal carriers, post offices, and processing centers in this country–and slowing down the delivery of our mail.


Postal Workers: The Last Union (Truth-out)

Congress’s war on the post office: The Postal Service faces a threat greater than email or economics: Politics (Salon)

Postal Service pleads for help as losses continue (CNN)

Is benefits law dragging down the Postal Service? (CNN)

Don’t Let Business Lobbyists Kill the Post Office (TAIBBLOG)

Privatization of US Postal Service could be costly (The Daily Cougar)

Republicans pushing to privatize USPS (Coloradoan)

Post Office is vital, hamstrung by Congress (Daily Review Atlas)

ALEC/Koch Cabal Pursuing Privatization of the US Postal Service for UPS and FedEx… (Voters legislative Transparency Project)

Special Report: Towns go dark with post office closings (Reuters)

Post office closings may increase rural isolation, economic disparity (Washington Post)

Senate Passes Postal Reform (Senator Bernie Sanders, Vermont)

Is Your Post Office Closing? USPS Is Studying Shuttering 3,700 Locations (NPR)

USPS Closings Could be Averted With Senate Bill (Christian Post)

H.R. 6407 (109th): Postal Accountability and Enhancement Act

Rain, Snow, Sleet and Congress (New York Times)

Shock Doctrine at U.S. Postal Service: Is a Manufactured Crisis Behind Push Toward Privatization? (Democracy Now)

Sens. Schumer, Gillibrand urge continuation of post office closing moratorium beyond May 15; W. Stockholm, Hailesboro on list (NCNow News)

USPS Postal Service Countdown Clock (Senator Tom Carper, Delaware)

NALC FACT SHEET (National Association of Letter Carriers)

Sen. Sanders Calls Postal Service Plan ‘Deeply Flawed’ (Postal Report News)

Co-sponsors of HR 1351 (PopVox)

So is your post office on the chopping block? The Postal Service released this state-by-state list of retail locations that could be affected.

156 thoughts on “Going Postal in Washington, D. C.: The USPS, the Postal Accountability and Enhancement Act of 2006, Union Busting, and Paving the Road to Privatization

  1. KarlF
    That matter of not lifting a finger is in accord with Malisha, who mentioned a case where a Governor said he did not have the power to do something, and she said it was clear that he DID, but WOULD NOT use his power unless it was for those equally powerful.

    The power of the demonstrations were powerful enough to force LBJ.
    Your pont would seem logical and the events did raise the question cha we appease and still portect ourselves from black progress. . The point remaining is how do we get the power to force change. Suggestions???

    My niece advised that the 49% children of color in NC does not give her concern, “as long as all contribute”.

  2. Eliminate the Postal Service?

    How about:

    Get rid of the FED!

    “And yet, everything we know about organizations with that kind of authority, without over-sight, or any external check or balance, tells us that they cannot possibly work well. Just as econ-omy-wide central planners lack the incentives and information to direct the allocation of productive resources, monetary planners lack the incentives and information to make efficient decisions about open-market operations, the discount rate, and reserve requirements. The Fed simply does not know the “optimal” supply of money or the “optimal” intervention in the banking system; no one does. Add the standard problems of bureaucracy—waste, corruption, slack, and other forms of inefficiency well known to students of public administration—and it becomes increasingly difficult to justify control of the monetary system by a single bureaucracy.
    4 This is especially true when the good in question is money, the only good that exchanges against all other goods, meaning the good in which all prices are quoted. Mismanagement of the money supply not only affects the general price level, but distorts the relative prices of different goods and industries, making it more difficult for entrepreneurs to weigh the benefits and costs of various forms of ac-tion, leading to malinvestment, waste, and stagnation. Price inflation rewards debtors while pun-ishing savers, just as artificially low interest rates reward homeowners while punishing renters. Instead, market forces should determine levels of borrowing and saving, owning and renting, and entrepreneurial activity. Put differently, the monetary system is so important that it cannot be en-trusted to a government agency—even a scientifically distinguished, nominally independent, prestigious organization like the Federal Reserve System.”

    “Keynes was wrong. Cheap credit does not help bring an economy out of recession (particu-larly when it was cheap credit that caused the recession in the first place). More generally, a monetary system controlled by an all-powerful central bank is inherently destabilizing and harm-ful to economic growth. The mistakes made by the Fed before and after 2008 are not isolated in-cidents, mistakes that can be corrected by making minor changes to the Fed’s charter, structure, or independence. They are the predictable result of giving control of the monetary and financial system to a government agency. The best option is to replace the central bank and let the market be in charge of money.”



  3. Bron,
    According to some, JFK tried to through exec order 110 Which told the treasury to start printing bills, I think it was. Did that have something to do with his assassination?

  4. National Associations Of Letter Carriers Legislative Fact Sheet: Background
    it has been estimated that Federal Employees , Federal Retireees and families have contributed more then $200 billion towards deficit reduction since 1980 through cuts in pay, health care and benifits and retirement benifits . Postal Federal Employees have been on the front line of efforts to reduce the budget deficit. The 1997 Budget Reconcillation Bill as part of the deficit reduction effort, enacted a temporary increase in Federal Postal Employees cotribution to the Civil Service Retirement System and the Federal Employee Retirement System. The result is a phased in temporary increases in employee retirement payments throrugh Dec. 31, 2002. After Jan ,2000 80% of the 5 % increase has already taken effect . An additional 10 % is scheduled to take place in 2001. The sole purpose of the increased contributions to the retirement system was to achieve deficit reduction. Postal Federal Employee recieved no additional benifits from their increased contribiution. In 2003, Congress was informed of the overpayments to the retirment funds, then postal comments to the federal trade commision took place in august , 2007, after the passing of the PAEA in 2006. http://www.postalmag.com/joygoldbergstressusps.pdf.
    federal budget treatment of the USPS, oig report 2009
    http://www.billburrasjournal.org- Misc
    www. savethepostoffice.com scroll down read
    ALEC/Koch Cabal Privitization of the USPS for Ups and Fedex

  5. In 1917 Collective bargaining was formed due to the fact that Congress was having difficulty since Postal Workers were protesting working conditiions and cogress did not want to listen, but eventually rather then more violence congress decided to have a medition process and so collective bargaining was formed, but actually did not come in to full effect until around 1935 in the year that President Rossevelt decided to let people form unions , becasue mainly for the decade before big business was against unions and in fact many could not get a job if you were for unions, at all, but then the stock market crashed and america suffered after this attempt to do away with unions. Even with that event, and from an unlikely source of information on the net, the detroit news socialist underground, , facts began to emerge, that in some cases, such as detroit where union workers formed the national guard was sent out to actually shoot in to the union memers who were protesting work conditions non violently, including a case in gastonia , nc where over 400 people formed and protested peacefully, then were bayonetted from national guard coming out.So big money was behind the attacks but did not take in to account the damage done economcally by destroying unions and if we fast forward to germany during this time we can also remember the destruction of unions there, then the hollocaust that followed. Now once again an attack on the 2nd biggest working force is taking place, not much of modern society but rather a step backwards of history repeating itself in our country and yet unions have given minimum wages laws, health beniifits, fmla , minnimum hours. Then the attack on the USPS started and no doubt planned out to go with a coprorate buyout of a Consitutional designed service for the American people.

  6. Never too late say somg—-well obviously I am. But the editorial paean to the village PO in today’s struggling newspaper got me riled. Thus this.

    Has the USA pop. fled the country because there are neither jobs nor sustenance for a small famerr or anyone else. I believe it has. Have you heard of agrobusiness. Well, that’s who took over the countryside folks—-more or less, from state to state.

    So, those with romantic dreams of country life, forget it. Exchanging gossip at the post office ain’t what it used to be, and probably never was either. Haven’t you noticed how most village folks drive by their village store (if it’s hanging on) and drive into the nearest center where the glitter and the glitz awaits with its tingle-tangle. Welcome all with dollars and or plastic. No plastic, well we can fix that, sign right nere.

    So the rural post office is just a relic of the past. Just like the general store, the blacksmith, the radio repairmen, and the gas station. You know what killed the small dairy farmers here? The big dairy set a minimum which most could not meet. That’s how commercialization does it to our countryside. Now cows are big business, polluting the air, polluting the water, keeping Monsanto rich along with big Pharma.giving us our daily dose of synthetic hormones, and pink slime industry which feeds our kids at lunch.

    So wherever you are the PO is a relic. But what’s more economical: one postman visiting 30 homes or 30 cars visiting the old post office? Uhhhh, excuse me, where does the postman pick up the mail? At the mall, where most of you will visit once this week.

    Get it. The times they are a-changing——and I ain’t Bob Dylan either.

    So make sure you got the net, drive that one through the legislatures. So your kids can make up for all the teachers who are being cut out of the schools now.

    Progress! You betcha, and she don’t own the phrase. So it’ll do.

  7. We used to ride horses until the car was invented. Email and electronic commerce IS the future. The Postal Service as we know it will meet it’s own demise.

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