United States Postal Service..We Hardly Knew Ye!


Respectfully submitted by Lawrence E. Rafferty (rafflaw)- Guest Blogger

It was big news this past week when the United States Postmaster General Patrick Donahue announced that the Post Office was planning to end Saturday mail delivery starting in August, 2013.  In light of the large deficits that the Post Office is experiencing, the news is not surprising.  What may surprise you is the real reason for the Post Office deficits.

“In 2006, the Republican-led Congress passed an unnecessary law requiring the United States Postal Service to pre-fund its pension benefits for 75 years through a $5.5 billion annual payment. The Postal Accountability and Enhancement Act of 2006 (PAEA) is the only one of its kind for a government agency. On August 1st of this year, the Post Office will likely default for the first time in its history on its 2011 pension payment. If Congress does not act, it will also default on its 2012 payment due September 30th.

The requirement has drastically harmed the functions of the agency, which is used by almost every American. In July, USPS began closing offices around the country to meet the annual payment. By the time current downsizing plans are completed in 2014, Americans will see 229 processing plants closed and 28,000 jobs lost. In June, ten USPS employees launched a multi-day hunger strike to protest the cuts. Without the pension payment, USPS would have a $1.5 billion surplus instead of a $20 billion shortfall. “[T]hese ongoing liquidity issues unnecessarily undermine confidence in the viability of the Postal Service among our customers,” said USPS spokesman David Partenheimer.”  Think Progress

You read that correctly.  If the Post Office had been allowed by Congress to fund its pensions and retiree health benefits as any other private or public entity, as of last Summer it would have had a $1.5 Billion surplus!  I wonder why Congress decided in 2006 to put this onerous requirement on the shoulders of the United States Postal Service?  Could there be political reasons why this move was taken in 2006 and is Congress trying to destroy the USPS?

Some reporters are suggesting that the Postmaster has made this announcement in an attempt to convince the public and therefore, Congress, that the harmful pension benefits prefunding requirement needs to be stopped or altered.  It is Congress that put these “chains” on the USPS and has to this date refused its pleas to close many unnecessary post offices and the past attempts to end Saturday delivery.  A bipartisan bill passed the Senate last year that would have alleviated the pension and health benefit payment requirements, but the House failed to pass the bill or even come up with an alternative.

“A bipartisan bill that passed the Democratic-led Senate last year would have ended Saturday mail delivery and eased its benefit payment obligations.  But the Republican-led House of Representatives, which had advocated for aggressive post office closures, never voted on a postal bill. ”  CNBC     It amazes me that Congress can take a viable organization and put unreasonable and unnecessary restrictions upon it and then refuse to act to correct its own mistakes.  On second thought, maybe it doesn’t surprise me.

Was the pension prefunding requirement passed in an attempt to force the USPS out of business and send business to the private sector?  Did the House of Representatives refuse to accept the Senate fix or pass its own fix because of pressure from its rural constituents, letter carrier unions and/or private delivery services who would benefit from the closing of post offices or ending Saturday delivery? Congress has prevented the USPS from raising its first class mail rates as well as preventing it from necessary downsizing, but yet that same Congress claims that the USPS is being mismanaged.

It may surprise you that the USPS does not cost the taxpayers a dime.  Esquire.com put it best.  “The postal service is not a federal agency. It does not cost taxpayers a dollar. It loses money only because Congress mandates that it do so. What it is is a miracle of high technology and human touch. It’s what binds us together as a country.” Esquire

It is time for Congress to allow the United State Postal Service to act like any other governmental agency or private company when it comes to funding its pension and retiree health benefits.   It is Congressional politics that has caused this dilemma and it is only Congress that can fix it. Doesn’t that worry you?

39 thoughts on “United States Postal Service..We Hardly Knew Ye!”

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  3. They are reducing hours and planning on closing thousands of post offices, however, at the same time with Saturday delivery being cut it substantially cuts the operational procedures it takes to handle all the mail in an efficient and timely manner. No first class delivery on Saturday includes, certified letters, priority letters, registered letters. These are all included because they are not packages, They are premium services as the customer pays
    an extra fee or amount for handling this mail. In other words the customer
    gets shorted.

    This is bad for the customer and worse for the post office. Without receiving
    services paid for trust is broken.

    The post office has always based and prided itself on it ability to not only
    aid but serve each customer unconditionally. Trust remains its main goal.

    Unfortunately Congress has and continues to fail this one of a kind

    I am a part time postal worker that receives no benefits It pains me as
    a citizen and a postal worker to see Washington deal the Post Office
    such a raw deal.

    At this point I see no resolution in sight. Then again that takes caring
    something Washington have long since lost the ability to do.

    Hope everyone has a good day. Life Goes On.

  4. Computerized services are the wave of the future at Postal Stations. The lines are shorter than the line for the human. That is because the humans are not yet all that computer machine savvy. But, they could put these machines in shopping malls in every mall in America and close thousands of these small post offices.

  5. MEANWHILE, back at the ranch:

    Combined total for imports and exports of Chinese goods hits $3.87tn, edging past the US for the first time

    (China overtakes US in world trade, Guardian). Becoming the worlds number one WMD and other weapons dealer did not do the trick for the hicks this time.

  6. leejcaroll,
    It is not only the money gained through the privatization of the USPS if that is the plan, but also destroying the postal union and reducing their impact on influencing elections.

  7. Blouise, I agree. I wonder how many pockets are being lined with$ from the private services, or hope to be private services?

  8. If the USPS no longer exists, then we can also say “good-bye” to the last “secure” (at least for most people w/out expesive encryption software) mode of communication between individuals. It’s a lot harder to read a letter mailed to someone that it is to hack an email.

  9. from USPS
    “. . . Continued growth of 4.7 percent in Shipping and Package revenue and increased efficiency helped mitigate, but could not fully offset, the financial effects of continued First-Class Mail volume declines and costs that are beyond Postal Service management control. As a result, the Postal Service recently announced it would move forward with accelerated cost-cutting actions necessary to help maintain liquidity because Congress has not passed comprehensive postal reform legislation.

    The first quarter is traditionally the Postal Service’s strongest financial quarter, mainly due to the holiday mailing and shipping season. The quarter 1 results also were aided by growth in Standard Mail during the months leading up to the election. The holiday season resulted in a strong increase in competitive package volume as customers took advantage of Postal Service Priority Mail flat-rate pricing and increasingly turned to the Postal Service for last-mile delivery.”

    bolding is mine

  10. The boat marina is located in a town with a population of 250 which does not include a dog count. The town is just across a bridge from a city of thirty thousand people and at the other end of the bridge is a Post Office. Then two miles away is the Main Post Office. There is a small Post Office in this town of 250. It has some mailboxes inside for the people to use if they dont get mail delivered at their home. There is no service after four thirty Monday thru Friday and it is now closed Saturday and Sunday. There is no postage machine and more significantly not one of those sophistifcated computerized machines that weighs the package and issues stamps and labels of all sorts. If the Post Office had one of those machines it would be quite useful. They could lay off the lady who works the counter inside five days a week but who shuts the place down for lunch every day at the noon hour when the traffic is at its highest. Now this is a no brainer. One has to drive across the bridge to the Main Post Office to get access to a postal computerized machine but that thing is open 24/7. Simply put one of those here in the lame office. Or close it entirely. Put the little mailboxes in the hallway of the Shopping Mall. It would save some money. Easy thing to observe here. Yet, why dont they figure it out?

  11. What are ups and FedEx going to do…

    Great story raff…. Setting up to fail..

  12. It should be noted that both UPS and FedEx contract with USPS to deliver to many locations that are just too expensive for them to do it. If they kill USPS those areas will either do without or pay a heavy premium to get anything. It will be yet another divide in the country already more divided than it has been since FDR invented the TVA to provide the miracle of electricity to rural America.

  13. What a disgrace but totally par for the course. Talk about killing the liquidity in commerce in the United States. All for foolish idealisms.

    What would change this? I suspect one tactic would be to somehow get the news media to whip up support from the public. Explain the situation as Lawrence did and then top it off with Congress intends to break up the post office.

    I guarantee that most people like their letter carrier far more than any member of congress.

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