Rolando: PMG Donahoe was behind move to increase pre-funding requirement

rolandoIn a message to members of the National Association of Letter Carriers in the union’s Postal Record magazine, NALC President Fred Rolando has revealed that Postmaster General Pat Donahoe, who once claimed that repealing the PAEA pre-funding requirement would solve the USPS’s financial problems, was behind a scheme to increase the pre-funding requirement by $15 billion:

in February, he proudly bragged to one of my fellow postal union presidents that he was the author of one of the more bizarre proposals included in S. 1486, the Carper-Coburn postal reform bill that was marked up by the Senate Homeland Security and Governmental Affairs Committee earlier this year. The proposal was to require the Postal Service to pre-fund $15 billion in future workers’ compensation benefits decades in advance… I thought the PMG had lost his mind.”

Rolando says that the PMG’s recent actions, including his support for Eric Cantor’s USPS financed bailout of the Highway Trust Fund prove that he is “so obsessed with cutting Saturday delivery that he can no longer think straight”, comparing him to Captain Queeg in “The Caine Mutiny”.

Here is the full article:

President’s Message
by Fredric V. Rolando

A few years ago, Postmaster General Pat Donahoe did something that really shocked me. He testified before the Oversight and Government Reform Committee of the House of Representatives and said that he supported “practically everything” in a truly putrid piece of legislation introduced by Rep. Darrell Issa, the committee’s chairman. That bill, H.R. 2309 (the Postal Reform Act of 2011), which never gained more than one other cosponsor during the 112th Congress, would have destroyed the Postal Service.

It offered no relief from the crushing pre-funding mandate that has devastated the Postal Service’s finances over the past seven years, and it called for massive service and job cuts while subjecting the USPS Board of Governors to a humiliating financial control board. It was a betrayal of the hundreds of thousands of postal employees-managers and craft employees alike- who have made the U.S. Postal Service the best post office in the world.

Apparently, the only thing that mattered to Donahoe was that the Issa bill got rid of six-day delivery service. Killing Saturday delivery is for the PMG what Moby Dick was for Capt. Ahab- it is all that matters.

I didn’t think he could sink much lower. I was wrong. Over the past seven months, time and again, he has proven that he is so obsessed with cutting Saturday delivery that he can no longer think straight.

First, at the end of December, the four postal unions and other allies in the industry developed a reform plan that focused on resolving the pre-funding mandate and implementing a series of consensus reforms on pensions, pricing and products. The plan was designed to restore the Postal Service to long-term financial viability. Asked to publicly support the plan, the PMG refused- like Capt. Queeg (the Humphrey Bogart character in The Caine Mutiny), he has let his obsession warp his mind. Without five-day delivery, he would not support the plan. (If you haven’t seen the movie, you should; for the PMG, five-day delivery has become Capt. Queeg’s frozen strawberries.)

Then in February, he proudly bragged to one of my fellow postal union presidents that he was the author of one of the more bizarre proposals included in S. 1486, the Carper-Coburn postal reform bill that was marked up by the Senate Homeland Security and Governmental Affairs Committee earlier this year. The proposal was to require the Postal Service to pre-fund $15 billion in future workers’ compensation benefits decades in advance. No other agency, department or company in America, private or public, faces such a ridiculous burden. Given that the similarly unique but larger and even more unfair burden to pre-fund future retiree health benefits nearly destroyed the Postal Service during the Great Recession, I thought the PMG had lost his mind. But he didn’t stop there.

In early June, Donahoe may have done the most irresponsible thing any postmaster general has done since the creation of the Postal Service in 1970. He publicly endorsed a transparently phony budget plan from House Majority Leader Eric Cantor to ‘offset’ deficit spending to keep the Highway Trust Fund solvent by mandating the end of Saturday delivery. The short-term (eight to 10 month) extension of the trust fund was to be offset by 10 years of savings due to “avoiding a future taxpayer bailout of the Postal Service.” The proposal to book a hypothetical bailout of an agency that receives no tax money, to pay for a few months of highway maintenance, is embarrassingly bush-league and unworthy of a great country. But the PMG’s endorsement was worse- it was truly outrageous.

If allowed to happen, this budget gimmick would set a terrible precedent for the Postal Service. Why raise taxes or reduce spending at taxpayer-funded agencies, when you can pay for pet projects with legislated service cuts at the Postal Service? Need a new aircraft carrier? Slash post office hours. Want a new fleet of planes to fight forest fires? Raise postage rates.

I can just imagine how Vince Sombrotto would react to this. He worked so hard with then-PMG Tony Frank in the late 1980s to get the Postal Service off-budget, to shield the Postal Service and ratepayers from scheming politicians like Rep. Cantor, who fortunately lost his seat in a primary election the week after he announced his ridiculous highway bill.

Apparently, there is no limit to how low the postmaster general will stoop to achieve his beloved five-day delivery plan. That’s shameful.

Pat Donahoe owes every postal employee and postal ratepayer an apology. Better yet, he could redeem himself by working with us to achieve real reform and end his alliance with politicians who want to dismantle the Postal Service.

Otherwise, it might be best for him to join Congressman Cantor in ‘retirement’ from public life.

July 2014

The Postal Record .

  • fazha

    When you have a business in the private sector that is run into the ground financially, tipped to or beyond the edge of financial ruin, the CEO (in our case PMG Pat Donahoe) and some of the other “bigwigs” that were in charge and responsible for the fiscal disaster are fired and they are typically replaced with someone with a plan or at least the ability and vision to bring it back to solvency. This being said, why is there no firing and shaking up amongst our our “leaders”? Our PMG and our other postal leaders should have been let go long ago, instead they still have the reins and are continuing to destroy the Postal Service. Our true financial situation is not as bad as the public is lead to believe. It is through the repeated actions and choices made by the top level management that continues to ruin us. If the requirement to pre-fund its future health care benefit payments to retirees for the next 75 years all in a ten-year time span was not required, the USPS financials would be in the black. Is there anyone that thinks this is fair or that the government is not going to borrow (ie. steal) from that account without paying it all back or pay any interest back to us? Our PMG will not be happy until our current mail system is unrecognizable as anything other than a privatized carcass of its current self. PMG Donahue should be fired and someone who is willing and able to uphold the oath all postal workers make to protect the mail and the Postal Service itself should be appointed to the position.