Looking back on postal reform: Where were you in 1976?
May 7, 2012
As the debate over postal reform shifts to the House and the rhetoric heats up a few more degrees, this might be a good time to take a step back and look at a little history. In many ways, history is repeating itself, and a look back may give us some sense of where things are headed (or not).
In 1975, the country was just coming out of a recession caused by the 1973-74 stock market crash and OPEC’s decision to quadruple oil prices. As a result of the recession, mail volumes plummeted, and in 1974, the Postal Service incurred a $2.3 billion deficit (almost $10 billion in today’s dollars). There were concerns that the volume might never return.
To address the deficit problem, the Government Accountability Office (GAO) issued a report in June of 1975 entitled “$100 Million Could Be Saved Annually In Postal Operations in Rural America Without Affecting the Quality of Service.” The controversial report recommended closing 12,000 small post offices that were operating at a loss. (Adjusted for inflation, $100 million would come to about $400 million today.)
It wasn’t the first time rural post offices had come under assault. A few years earlier, when the Department of the Post Office was transformed into a corporate-type entity called the Postal Service, rural residents feared what would happen, and they persuaded the authors of the 1970 Postal Reorganization Act to include language in the bill that protected rural post offices. Hence this oft-quoted passage in Title 39 [section 101 (b)]:
“The Postal Service shall provide a maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not self-sustaining. No small post office shall be closed solely for operating at a deficit, it being the specific intent of the Congress that effective postal services shall be insured to residents of both urban and rural communities.”
After the GAO issued its 1975 report, Congress began holding hearings about post office closings, and lawmakers on both sides of the aisle spoke up for the value of rural post offices. At the hearings, Republican House member Keith Sebelius of Kansas stated, “When a community loses its post office, it also loses its identity.” And Democrat Joe Evans of Tennessee told the House committee, “It is unconscionable to even consider the closing of these post offices.”
The protest against closing post offices fell on deaf ears at the Postal Service, however, and just a few weeks after the hearings, postal headquarters announced new guidelines making it easier to close small post offices. Claiming that rural carriers would provide better service than a post office, Postmaster General Benjamin Bailar (on the right) shut down 200 post offices in three months and put another 600 “under scrutiny.”
On February 28, 1976, 44 members of Congress sued the Postal Service. Three senators and 41 House members charged that the post office closings were illegal “and a massive assault on the country’s small post offices.”
A few hours after the suit was filed, U.S. District Court Judge John Lewis Smith issued a retraining order barring further rural shutdowns. In March, Smith ruled that communities needed at least 90 days notice of a closing.
The ruling gave Congress time to act, and in September it passed the Postal Reorganization Act Amendments of 1976 (H.R.8603; P.L. 94-421) by an overwhelming majority, 267 to 113. While Democrats voted 213 to 45 in favor and Republicans opposed it, 68 to 52, those 52 Republicans made the bill a bipartisan success and showed that it wasn’t just Democrats who cared about protecting post offices. In his official statement on signing the bill into law, President Gerald Ford said, “I am pleased by the responsible and effective bipartisan cooperation that was evident in the drafting and passage of this legislation.”
The bill put a moratorium on closing rural post offices until the following April, while a “blue ribbon commission” studied the broad range of problems confronting the Postal Service. The bill also put new restrictions on closing post offices, and it’s thanks to this legislation that the Postal Service must consider the effect of a closing on the community and employees as well as “whether the closing is consistent with the policy of the government that the Postal Service provide a maximum degree of effective postal service to rural areas.”
The PRA Amendments also gave communities the right to appeal a post office closing, a right that was quickly exercised. From September 1976 to the end of 1979, the Postal Service tried to close 90 post offices, and 24 communities filed an appeal with the Postal Rate Commission. In every case, the PRC ruled in favor of the community and remanded the closing decision back to the Postal Service for further consideration. Only 33 of the post offices eventually closed.
The parallels with current events are almost too obvious to mention. The GAO continues to push for post office closings, and just a couple of weeks ago, it issued another report to Congress advocating closures to help deal with the deficit. As in 1975, closing thousands of small post offices would yield only very minimal savings. Closing the 3,650 post offices in the Retail Access Optimization Initiative (RAOI), for example, would save $100 or $200 million (according to the PRC and Postal Service, respectively).
In 1975, the GAO said the closings would be justified “if the alternative mail service would be at least as good.” The new GAO report similarly endorses the Postal Service’s view that post offices can be replaced by “alternative access” to postal services — contract postal units, rural delivery, kiosks, and so on — even though the people served by post offices are not satisfied with these other options.
Last July, the Postal Service revised its discontinuance procedures for closing post offices — shortening the process and making it easier to close post offices — just as the Postmaster General did in 1975. The shorter process didn’t make much difference because of the moratorium, but those new rules are now in place.
Another obvious historical parallel is that the general public — despite the Postal Service’s unsubstantiated claims that people are visiting the post office much less frequently — continues to feel invested in their post offices. Just as they did in 1976, people have spent the last year protesting the closings with letters to elected officials, rallies, letters to the editor, petitions, appeals, and speaking out at public hearings.
Lawmakers have responded to the outcry against the closings in much the same way they did in 1976. Back in November, Senators pressed for a moratorium, and they used the breathing spell to work on reform. The Senate’s 21st Century Postal Service Act (S.1789) would go a long way toward implementing additional measures to protect post offices, particularly vulnerable rural post offices.
As in 1976, preserving post offices remains a bipartisan issue. When S.1789 came to the floor, Democrats voted 47 to 4 in favor, while Republicans opposed it, 33 to 13. But those 13 Republicans helped make the bill bipartisan and demonstrated that the post office issue crosses party lines.
One significant difference between 1976 and today is the way post office appeals have fared. When the PRC heard those 24 appeals in 1976-79, it remanded every closure decision back to the Postal Service. Since January 1, 2011, the PRC has issued decisions on 220 appeals, and only 16 were remanded.
It wouldn’t have taken much, though, for the appeals to have ended differently. Over 130 of those affirmative decisions were by a split decision, with two commissioners voting to affirm the Final Determination and two to remand the closing decision back to the Postal Service for further consideration. There might have been a lot more remand rulings if there had been a fifth commissioner in place — depending on the judgment of that commissioner. (Last week, Tony Hammond was sworn in as the fifth commissioner.)
As the House considers its version of postal reform and the Postmaster General contemplates his next move, it will be interesting to see what other historical parallels play out.
Will the House pass legislation along the lines of what Darrell Issa has proposed, making it easier to close post offices and processing plants, or will Issa’s postal reform fail to find the votes? There are signs his bill may be running into trouble. A few days ago, 17 Republican members of the House wrote a letter to Speaker Boehner and Minority Leader Pelosi expressing their fear that "the Postal Service may be misguided in targeting rural post facilities as a means of addressing its shortfall."
Several members of the House — including Democrats Gerald Connolly, Maurice Hinchey, and Peter DeFazio, as well as Republicans Chris Gibson and Michael Grimm (both cosponsors of DeFazio’s H.R. 3591) — are working to pass legislation that, like the Senate’s, will actually make it tougher to close post offices.
Even Issa may be realizing that closing rural post offices is not a popular idea. In response to the letter from the 17 fellow Republicans, Issa and his co-sponsor Dennis Ross wrote their own letter to Boehner and Pelosi adding their support for an amendment to their bill that would limit the number of rural post office closures to 500 per year.
The Postmaster General has indicated that he too may be backing away from his plan to announce “mass closures” when the moratorium ends. (In fact, he now says they never even used the word "closure.") It looks like the PMG will proceed much more cautiously, moving in what PRC Chairman Ruth Goldway described this week as a “staggered and slower fashion.”
There are other indications, however, that the Postal Service plans to proceed with post office closings. On Friday, Postmaster General Donahoe said (in a not-so-veiled criticism of S.1789), "We need to rethink how we manage our retail footprint.... If we can gain the flexibility to move quickly in these areas, we can return to profitability. If we are unable to do these and other things, we risk becoming a permanent burden to the American taxpayer. Such an outcome is entirely avoidable with the right legislation.”
Along the same lines, USPS Board of Governors Chairman Thurgood Marshall, Jr., said a few days ago that the Senate bill “does not provide the Postal Service with the flexibility and speed that it needs to have a sustainable business model.” Given that the Postal Service’s new business plan includes $2 billion in cuts to the retail network, Chairman Marshall apparently endorses mass post office closings.
It’s entirely possible, then, that the Postal Service will ignore the “sense of the Senate” included in S.1789 (Section 411), which states that “the Postal Service should not close or consolidate any postal facility... or post office before the date of enactment of this Act.”
If the Postal Service does decide to proceed with some closings, the first to be shuttered will be the 230 post offices that received Final Determination notices before the moratorium began (over 130 of which lost an appeal). There are no further bureaucratic hurdles for discontinuing these post offices, and they could all be closed without further ado.
Perhaps it’s time for some members of Congress to think about taking a page out of history. Maybe they should consider filing a lawsuit against the Postal Service to stop the closing of those 230 post offices and prevent the Postal Service from starting in on the 3,650 RAOI post offices. No one has mentioned the idea, but it worked in 1976, and it could work again. That would certainly be an interesting turn of events, and one for the history books.
(Credits: Lewiston Evening Journal, Feb. 26, 1976; Postmaster General Benjamin Bailar; President Ford signing something; first Apple computer and Concorde takes flight stamp, both from 1976; article on restraining order, Joplin Globe, Feb. 27, 1976. The story on what happened in 1975-1976 comes from Kathleen Conkey’s The Postal Precipice: Can the U.S. Postal Service Be Saved?)