Fact-checking the PMG’s comments on health benefits

Yesterday we told you about the Postmaster General’s claim that the USPS has never talked about post office “closures” when a simple Google search proves otherwise. But the PMG also seems to have a unique understanding of the words “competition” and “largest”.

“Competition” comes up in this clip when Donahoe explains how the USPS can cut 10% off of its health insurance costs by taking postal workers out of the Federal Employees Health Benefit plan. How? By creating competition! This probably comes as a surprise to postal workers, who currently get to choose their health plan from dozens of companies that compete for their business. Under Donahoe’s plan, the USPS would contract with a single insurer, and that would be the company that would cover postal employees and retirees. So, according to the PMG, competition is when you don’t get to choose from among dozens of competitors?

Donahoe also explains in the clip that one reason the USPS will be able to get such a good deal is that it will be the “largest” insurance plan in the United States, with one million enrollees. Sounds impressive! Until you stop and think- after all, postal workers are currently part of the Federal Employee Health Benefit Plan, which also includes the rest of the federal government. Isn’t FEHBP already “larger” than any USPS plan could possibly be? Of course, the answer is yes- and not just yes, but a really, really BIG yes- FEHBP currently insures nine million Americans. So even if the USPS pulls out, FEHBP would still be eight times the size of any USPS health plan.

Postmaster General Patrick R. Donahoe on Newsmakers | C-SPAN.

PMG on post offices: “closure is a word we’ve never used”

In an appearance on C-Span’s Newsmakers, Postmaster General Pat Donahoe says that the USPS isn’t going to suddenly close thousands of post offices on May 15, when the moratorium on post office and plant closures is set to end. In fact, the PMG claims that the USPS has never used the word “closure”- but says the word is “all over the news and gets people riled up and in some cases for no good reason.” Donahoe told his interviewers that the USPS would simply be “evaluating” offices, and any changes would be “incremental”.

The PMG’s statement is contradicted by a press release (see below) that the USPS issued just last month. That document refers to a “plan to study 3,600 Post Offices around the U.S. for possible closure” and notes that “most closures or consolidations would have to take place starting after May 15, 2012, and be completed by August 31, 2012.” Another press release last summer referred to plans to “to identify and study nearly 3,700 under-utilized Post Offices for possible closure”. And the USPS Annual Report submitted to the PRC in November notes that “Our current restructuring plans include studies to evaluate the potential closure or consolidation of mail processing operations, retail units, Post Offices, and other facilities”.

Postmaster General Patrick R. Donahoe on Newsmakers | C-SPAN.

U.S. Postal Service Statement on Election Mail Process

Guffey: Senate bill “a mixed bag”

APWU News Bulletin 12-2012, April 27, 2012 | PDF

“We must now turn our attention to the House…We must re-double our efforts to Save America’s Postal Service.”
– APWU President Cliff Guffey

The Senate passed an amended version of the 21st Century Postal Service Act (S. 1789) on April 25, and legislative action on postal reform will now move to the House of Representatives.

“Although the bill is flawed, the amended version is far better than the original,” said APWU President Cliff Guffey. “That is a result of the tremendous effort of APWU members, postal customers, and elected officials who appreciate the importance of the Postal Service to American life. Thank you for your hard work,” he said.

“With the moratorium on the closure of mail processing plants and post offices set to expire on May 15, we must now turn our attention to the House. We expect to face very tough challenges there,” Guffey said. “But we will do everything we can to get a good bill. We call on our members, small businesses, individual customers, and lawmakers to re-double our efforts to Save America’s Postal Service.”

“House leaders have not yet given any indication of how they plan to proceed,” said Myke Reid, APWU Legislative and Political director.

The House could consider H.R. 2309, a bill sponsored by Rep. Darrell Issa (R-CA) and Rep. Dennis Ross (R-FL), which would destroy the Postal Service. More than half of the members of the House are co-sponsors of another bill, H.R. 1351, which postal unions support, but Rep. Issa, the chairman of the House committee with jurisdiction over the Postal Service, has refused to allow it to come up for a vote. The House also could consider the Senate bill. Continue reading

$25 million daily USPS loss? More like $300 thousand!

Yesterday the Postmaster General went on the right wing Fox Business Channel to talk postal finances, and made the claim that the USPS is losing $25 million a day. It’s a claim that also pops up in many of the news stories that have been published about the Senate vote on S. 1789. Where did that number come from? Let’s take a look at the USPS’s most recent financial statement.

Through February, the postal service’s net loss is $5.7 billion. That covers 152 days of the current fiscal year. If you divide $5.7 billion by 152, you get an actual daily loss that’s even worse than the PMG claimed- $37.5 million a day.

However– the USPS publishes two different bottom lines these days- one shows the financial results PAEA style (including the PAEA required pre-funding of future retirees’ health benefits). The other (“Controllable Operating Income/Loss”) shows the net results without pre-funding- in other words, the way every other organization does business.

Without PAEA, the USPS loss so far this year is just $46 million. That works out to $302 thousand a day. So of the total year to date net loss, actual postal operations account for just 8/10ths of one percent. PAEA’s arbitrary accounting gimmicks account for 99.2%!

Politicians like Darrell Issa and Dennis Ross like to point out that the USPS would be facing a loss this year even without PAEA- and they’re right. PAEA doesn’t account for ALL of the postal service’s financial woes- just 99% of them!

USPS February 2012 Financials