Another Contrived Crisis for Profit: Exploiting the US Postal Service and Its Workers
The arguments all make so much sense; the digital era has eroded the business model of the US Postal Service (USPS) and a grand old institution is nearing the end of its life cycle. Ready to join typewriters, carbon paper, telegrams and the rotary dial on the ash heap of progress, the US Post Office is surely … wait … what? What? Whaaaat!!
It turns out that the arguments captivating the minds of many are chiefly a crock of cheese, churned out by such notorious schemers as Congressmen Darrell Issa (R-CA) and freshman Tea Party darling Dennis Ross (R-FL) of Lakeland. That’s right; it’s a giant stinking crock designed to benefit corporate titans and their profits, plus destroy the largest labor unions in the USA, with you and me paying dearly for it all.
A little known act of Congress in 2006 set the stage for the present debacle, but there is a serpentine history of political manipulation of the USPS since it formed its new identity in 1971. The history is described in one post from 1970-2010, and then another post on the rich activity from 2010 to the present, including the announcement by the Obama administration on Monday.
The presenting issue is the pre-payment of retiree health benefits by the USPS mandated in the 2006 law, requiring the payment of roughly $5.5 billion each year for 10 years. It will fulfill prepayment of these benefits for 75 years. That’s right; 75 years! Indeed, they are prepaying benefits for postal workers who aren’t even born yet. And payment is demanded in only 10 years. The payment is due September 30 and (surprise) the postal service doesn’t have the money.
With losses since 2007, and heavy losses this year, the USPS suspended its customary pension payment on June 22 to save money. On June 23, Reps. Issa and Ross filed their bill (HR 2307) which would bring sweeping reforms to the USPS. Issa and Ross are the only co-sponsors for HR 2307.
There has been a bill sitting with Issa’s House Committee on Oversight and Government Reform, HR 1351, which presents a simple solution to allow the USPS to implement its own business reforms. Since the USPS has overpaid its pension obligations by somewhere between $50 billion (Postal Regulatory Commission) and $75 billion (USPS Office of Inspector General), HR 1351 would transfer enough pension overpayment to cover the required retiree health benefit pre-payment. That makes sense to 206 co-sponsors, mostly Democrats but also growing group of Republicans.
The USPS obviously generates a lot of cash flow. It would be a huge boon to UPS and FedEx to have the USPS out of the way in the package delivery market. First class mail service – an authorized monopoly – would probably look pretty good, too.
Politically, the largest unions in the USA could be wrecked, a plum for the ideologues intent on destroying all forms of organized labor and collective bargaining. Yes, Koch Industries has provided nice campaign donations to both Issa and Ross.
Issa and Ross (and the Kochs) salivate at the thought of the USPS “defaulting” and then being able to take over and dictate terms, particularly the elimination of recently concluded labor contracts.
Far from being obsolete, the USPS does have to make serious adjustments to return itself to profitability which it had had in 2006 prior to the recession. A recent interview on NPR with Postmaster General Patrick Donohoe indicated some of the ways the USPS has and will continue to adapt to new circumstances.
Donohoe noted that the USPS had reduced its workforce by attrition by 250,000 since 2000 to its present level of 550,000. The USPS is totally competitive with private delivery firms in the small package business, having a tremendous network of locations and facilities.
Physical mail delivery will likely always have a place, certainly remaining a mainstay for marketers, albeit as one tool in growing array of options. The recession has certainly impacted revenue and driven some patrons to alternatives who won’t be returning when business recovers, at least in the same way. The USPS moves more pieces of mail each day than any other service in the world.
The number of outlets, processing facilities, and post offices will have to decline with 3,700 possible closures already announced, including the historic Evinston Post Office at the Wood and Swink General Store near the Alachua – Marion border off Hwy. 441.
However, like most businesses, the USPS budget is dominated by labor costs and achieving a break-even on costs will require imagination and determination. Ending the ridiculous demand to continue funding the overfunded pension plan, plus transferring some of the pension excess to cover the retiree health fund prepayment, thereby ending the $5.5 billion annual payment would all have a hugely positive impact on the USPS bottom line.
The issue with the USPS is a contrived crisis designed to break giant labor unions and raid the corporate assets and market share of the USPS for the benefit of private carriers.
The Obama administration recognizes most of what is afoot, having included remedies in their proposal on Monday which includes postponing the big retiree health benefit payment and avoiding “default,” allowing the end of Saturday delivery, and allowing an increase in first class postage by 2 cents to 46 cents, among other items.
Rallies are planned to show support for the post office and postal workers on Tuesday, September 27. Locally, Awake Marion will join other concerned citizens at the Save America’s Postal Service rally by Rep. Cliff Stearns’ office at East Fort King Street and 25th Avenue, Ocala starting at 5pm from 4pm until 6pm.
