WASHINGTON, April 17, 2013 /PRNewswire-USNewswire/ — Postmaster General Patrick R. Donahoe told a House committee today that the Postal Service is currently operating with a broken business model and the gap between revenues and costs will only get worse in the coming years unless the laws that govern the Postal Service are changed.

“Our financial problems are due to the restrictive laws that prevent us from fully responding to changes in consumer behavior,” Donahoe testified before the House Oversight and Government Reform Committee. “Any private sector company could quickly adapt to the market changes we have experienced, and remain profitable. However, we do not have all of the flexibility we need to adapt to a changing marketplace.”

Read the rest of this entry »

WASHINGTON – U.S. Senator Claire McCaskill, who last year led a successful fight that prevented the closure of hundreds of post offices in rural Missouri, continues her advocacy to protect postal services for Missourians. In a letter, McCaskill requested additional information from the Postmaster General about the Postal Service’s claims that it would realize substantial savings by moving to a five-day delivery model-claims McCaskill questions.

In 2010, the U.S. Postal Service requested that the Postal Regulatory Commission (PRC) issue an opinion on moving to five-day delivery. At the time, the Postal Service claimed that the move would result in significant savings while incurring only a modest reduction in revenue. However, in 2011, when the Commission issued their independent opinion of what savings would result from moving to five-day delivery, its research concluded that the potential cost savings had been greatly overstated by the Postal Service.

“We don’t even know if the move to five-day delivery will save the post office any real money,” said McCaskill, who was born in Rolla, Mo. “Many families, businesses, and seniors, especially in rural Missouri, depend on current delivery standards and want to see it preserved.”

The data used by USPS and the PRC to make their calculations were years out of date. In letters to Postmaster General Patrick Donahoe and the PRC, McCaskill requests that the agencies re-conduct and publish analyses on the impact of five-day delivery using the most accurate, up-to-date fiscal data.

“In particular (I) have expressed concern about the effects that such a move would have on customers who reside or conduct business in rural or remote areas,” the letter reads.

Last year, McCaskill successfully fought to keep hundreds of rural post offices in rural Missouri open and operating. She has previously argued that shutting down rural post offices would not help the Postal Service achieve substantial cost-savings, and cutting Saturday mail delivery would deal significant blows to communities across rural America.

McCaskill’s letter to Postmaster General Donahoe is available on her website HERE.

Office of Sen. Thomas R. Carper (D-DE) News Release

WASHINGTON – Today, Sen. Tom Carper (D-Del.), chairman of the subcommittee that oversees the U.S. Postal Service, released the following statement reacting to the Postmaster General’s announcement that the Postal Service will begin to implement new cost-cutting measures:

“Given the U.S. Postal Service’s dire financial situation, it shouldn’t come as a surprise that the Postmaster General is moving forward to implement additional cost-cutting measures with the limited tools at his disposal. I look forward to reviewing the details of the Postmaster General’s new proposals. Unfortunately, the reality is that these piecemeal efforts undertaken by the Postal Service are likely not enough on their own to fundamentally fix the Postal Service’s serious financial problems. Only comprehensive reform of the Postal Service that takes into account its long-term needs can address the severe financial problems that continue to plague this American institution. That significant, but necessary, reform can only come from Congress and the Administration, and it must include restructuring the Postal Service’s network and business model to reflect the changing demand for the products and services it offers. Without action by Congress and the Administration, the Postal Service — and the trillion dollar mailing industry that it supports along with over 8 million jobs — is at risk for failure later this year. We can’t continue to allow the Postal Service to flounder. I remain committed to working with my colleagues in both the House and the Senate to provide the Postal Service with the tools and resources it needs to reform itself so that it can survive and thrive in the 21st century.”

Congress must work quickly to pass a postal reform bill, APWU President Cliff Guffey told broadcaster Ed Schultz in a radio interview on Jan. 14. “It doesn’t matter whether the Postal Service will run out of money early this year or late this year — it’s the right thing to do.”

Lawmakers should pick up where they left off at the end of the last session of Congress, Guffey said, instead of starting all over.

One of the worst aspects of the Postal Accountability and Enhancement Act (PAEA) — beside the requirement to pre-fund 75 years worth of healthcare benefits for future retirees within a 10-year period — was the section of the law that prohibits the USPS from raising postage rates to pay for the pre-funding, Guffey said.

[listen to full interview]

‘Anyone Would Go Bankrupt’

No business in the world could survive a mandate from the government to pay out $5 billion a year without the ability to raise its rates, he said. “Anyone would go bankrupt.”

The result of the PAEA is no accident, the union president said. “It’s done exactly what it was designed to do.” The Postal Service was not in debt in 2006 when the law was enacted, but to pay for the pre-funding mandate, the USPS has had to borrow up to the legal limit, he noted.

Supporters of the law “want us to be like some of these other privatized countries,” Guffey said, “like Germany, where stamps are 78 cents.

“They want to take down a part of government everyone likes,” he said, “and they get a bonus of taking down the union.”

There’s little Democrats can do without cooperation from Republicans, Guffey said. Getting anything accomplished in the Senate takes 60 votes these days, he noted. And in the last session of Congress, House leaders refused to consider a bill co-sponsored by more than half of House members that would have saved the Postal Service. “That’s the tragedy of our whole government right now,” he added.

Future ‘Still Very Good’

The future of the Postal Service is “still very good,” Guffey said. “You can order a lot of things — even on your phone,” he said, “but the Postal Service will have to deliver it,” especially as more brick-and-mortar retail establishments disappear.

“More and more mail of FedEx and UPS is being moved over to be delivered by the Postal Service because we do have the infrastructure to get it done and get it done timely,” he said.

There are parts of the country that aren’t served by private couriers. “They have to hand it over to us, or it won’t get delivered,” he said.

A proposal is currently being considered by the US Postal Service to sell its building in downtown Berkeley, CA and relocate its services. This is just one city that is feeling the impact of a crippling financial crisis currently affecting the Postal Service. In fiscal year 2012 it lost approximately 5.9 billion. And now thousands of buildings may be sold and thousands of workers laid off in what USPS says is an attempt to save itself, but critics argue is a step toward privatization.It’s commonly understood that the internet and e-communication is causing the demise of USPS, but that’s not the full story. What seems to be the prime cause is actually a little-known law passed in 2006.

Read more: Massive Cuts to Postal Service a Step Towards Privatization?.

The US Postal Service released the following statement from Postmaster General Pat Donahoe:

The 112th Congress adjourned without having passed postal legislation. Such legislation could quickly restore the Postal Service to profitability and put the organization on a stable, long-term financial footing. This lack of action is disappointing.

The Postal Service has worked closely with the Congress over the past two years to advance a framework for a viable business model that will allow us to quickly respond to the evolving needs of our customers. As a result of frequent communication with Congressional leaders, we have modified important parts of our five-year comprehensive business plan, including the pace of consolidation of mail processing facilities, to give Congress maximum flexibility to make needed legislative changes. Unfortunately, Congress has not enacted these changes. As we sought to provide solutions to enable legislative change, we pursued cost-reducing and revenue-generating activities. Over the past two years we have reduced head count by approximately 60,000 career employees. We have consolidated 70 of our mail processing facilities. We moved to reduce hours at many of our Post Offices. We also have worked to substantially increase our package volume along with introducing a same-day delivery service.

As we look to the coming year, we are on an unsustainable financial path. We are currently losing $25 million per day, we have defaulted on $11.1 billion in Treasury payments and exhausted our borrowing authority. The Postal Service should not have to do business this way, which has undermined the confidence of our customer base and the $800 billion mailing industry we serve. We will be discussing with our Board of Governors a range of accelerated cost cutting and revenue generating measures designed to provide us some financial breathing room.

We encourage the new 113th Congress to make postal reform an urgent priority, and to work steadily toward the quick passage of reform legislation. We will continue to work with leaders of our House and Senate oversight committees and all members of Congress to help make this happen.

The US Postal Service has released its Integrated Financial Plan for the fiscal year that began on October 1. The plan forecasts an operating loss of $2 billion, down from the $2.4 billion loss in 2012, and the $2.7 billion the USPS lost in 2011.

The news media have mostly ignored those numbers, preferring the much more impressive $15.9 billion “loss” that Congress has arbitrarily slapped on the agency’s books. You would be hard pressed to find a major news outlet that would report that $13.5 billion of that “loss” is completely fictional, given that the money never changed hands, and never will!

You also won’t find a news outlet that will explain that the USPS should be able to borrow enough to get through the temporary cash shortfall it anticipates next October. It has, after all, a $15 billion line of credit from the Treasury. That credit card has already been maxed out, however, so that the USPS can loan the money right back to the Treasury in the form of the so-called “trust fund” that now holds $31 billion in past USPS profits and $15 billion in those forced “loans”.

Why doesn’t the mainstream media report the whole truth about the postal service’s finances? There are several probable explanations. In the first place, it’s just so complicated- you can’t fit the story into a sound bite. It’s a lot easier to throw out a few buzzwords like “bloated bureaucracy” or “outdated business model”. Another obvious reason is politics. Right wing politicians don’t like having a big government-owned, unionized monopoly that pays good wages and provides decent benefits. They much prefer the Walmart model of low wages and no benefits. It’s a lot easier to stoke resentment of well paid postal workers than it is to explain why Walmart doesn’t pay its employees a living wage.

Add to that the corporate nature of the media, where the primary goal is maximizing shareholder value rather than reporting the truth, and you end up with half-baked news stories that ignore the politically inconvenient details in favor of simple-minded fictions.

FY2013 USPS Integrated Financial Plan (.pdf).

Nov. 16, 2012 — On Thursday, Sen. Joseph Lieberman (I-CT), the retiring chairman of the Homeland Security and Government Affairs Committee, called a bipartisan meeting of House and Senate leaders to discuss his alarming idea to allow the U.S. Postal Service to end Saturday mail delivery service but retain package delivery service on that day.

“While I’m sure Senator Lieberman’s intentions are good, his notion not only is misguided, it falls into the trap of failing to address the root cause of problems the Postal Service continues to face,” NALC President Fredric Rolando said. “In fact, his proposal completely ignores the 2006 congressional mandate to pre-fund 75 years’ worth of future retiree health benefits and to do so within just 10 years.”

“This crisis, manufactured by Congress, is what’s creating on Capitol Hill a false sense of urgency to act immediately,” Rolando said. “There is no argument that something must be done to solve the Postal Service’s financial problems, but Lieberman’s so-called compromise would eliminate 25,000 city carrier jobs and drive more business away from the Postal Service by undermining the value of our service.”

The president pointed to a key underlying message from USPS’s financial report on Thursday for Fiscal Year 2012, which ended Sept. 30.

“Almost $11.1 billion of the Postal Service’s reported $15.9 billion loss this past fiscal year stems from the pre-funding mandate—an unfair burden that no other company or government agency bears,” Rolando said.

“In fact, leaving aside pre-funding and other actuarial adjustments, a fraction of the overall losses—$2.5 billion—came from the actual delivery of mail,” he said. “That’s still a lot of money, but it needs to be stressed that it’s about half of the $4.9 billion in losses recorded the previous year.

“Rather than charging ahead with a faulty compromise that focuses only on service cuts,” the president said, “Congress should take carefully measured steps to address pre-funding—especially since the pre-funding account already contains more than enough cash to meet the health benefit needs of future retirees for decades to come.

“Addressing pre-funding would help take away the manufactured sense of urgency and allow the entire postal community—employees as well as lawmakers and managers—to come together to develop a forward-looking business plan to help the Postal Service succeed in the 21st century,” Rolando said.

PRC Chairman Ruth Goldway expressed her concerns about the USPS’s network changes and service cutbacks in a “separate view” published along with the PRC’s advisory opinion:

Separate Views of Chairman Goldway

The Postal Accountability and Enhancement Act (PAEA) established a complex balance of responsibilities between the monopoly postal operator and the independent government regulator. This Advisory Opinion meets our obligations and recommends to the Postal Service how it should address its obligations. Read the rest of this entry »

ATLANTA , Sept. 19, 2012 /PRNewswire-USNewswire/ – In his annual state of the business address to the mailing industry, Postmaster General Patrick R. Donahoe today emphasized that the Postal Service has a solid business plan to return to long-term financial stability and that nothing will have a bigger impact on the health and future of the mailing industry than resolving legislative issues.

Read the rest of this entry »