October 10, 2013
The Postal Service’s request to the Postal Regulatory Commission for an exigent rate increase is on hold right now due to the government shutdown. The Request, along with testimony from three Postal Service witnesses and a slew of tables, was submitted on September 26. Before the shutdown happened, the Chairman had filed a couple of requests for additional information, but not much more had been submitted. (The materials can be found in Docket R2010-4(R).)
When the PRC resumes business as usual, there will be more requests for information from the chairman, responses from the Postal Service, and comments by the stakeholders. The Commission has 90 days to issue a decision. The Postal Service wants to implement the increase on January 26, 2014 — unless postal reform legislation makes it unnecessary.
The Postal Service wants to raise rates by approximately 6 percent. About 1.7 percent of the increase would be permitted without special approval by the PRC, since the law allows for such increases to keep up with inflation, as measured by the Consumer Price Index (CPI).
The exigent rate increase would add about 4.3 percent more to the CPI increase. That's somewhat less than the 5.6 percent exigent increase the Postal Service initially requested back in 2010, but similar to the revised request of 2011. (In 2011, the Postal Service did not not specify exactly how rates for each class of mail would change, but it downsized the revenue projection from $3.2 billion to $2.3 billion, the same as for the current request.)
The first exigent rate request was turned back by the Commission because the Postal Service had not done enough to explain how much of the losses it had suffered were "due to" the Great Recession — the "exceptional or extraordinary circumstances" cited to justify the increase.
The renewed request for an exigent rate increase contains plenty of data addressing how much the Postal Service has lost "due to" the recession — over $50 billion in revenues from 2008 to 2012, nearly $17 billion in 2012 alone.
The Commission and the stakeholders will focus a lot of their attention on the lost-revenue analysis and the legal justifications for an increase, but one of the most basic questions about the rate increase is not whether it'ss justified. The question is, will it actually work? Will it succeed in generating more revenue?
The mailers argue that higher rates will drive away so much volume that the net result will be less revenue, not more. In the materials submitted with the request for a rate increase, the Postal Service therefore provides a detailed analysis of how volumes and revenues would be impacted in order to show that revenues will increase as predicted.
Who’s behind the government shutdown? Some of the same people trying to privatize the Postal Service
October 6, 2013
There’s an article on the front page of today’s New York Times about how the federal budget impasse didn't just happen overnight. "A Federal Budget Crisis Months in the Planning" describes how a coalition of conservative activists made plans months ago to use a government shutdown as a tool to fight for the repeal of Obamacare.
The article describes “a well-financed, broad-based assault on the health law” that includes pressuring vulnerable Republican members of Congress and spending millions of dollars on ad campaigns.
The cast of characters behind the shutdown should be familiar to those who have been watching the effort to dismantle and privatize the Postal Service. The conservative think-tanks and lobbying organizations behind the attack on Obamacare are some of the same groups waging a war against postal workers and the fundamental principle that the Postal Service should be owned by the American people.
The Times article provides a “who’s who” of the conservative movement, and nearly everyone mentioned is also involved with the attack on the people’s postal system. Among the players mentioned in the article are the following:
The Koch brothers, the billionaire sons of one of the founders of the John Birch Society, have given millions of dollars to conservative organizations like the Heritage Foundation and various Tea Party groups. In fact, according to a Republican campaign consultant quoted in a widely circulated New Yorker piece, the Koch brothers “gave the money that founded” the Tea Party.
The Times reports that "a group linked to the Kochs, Freedom Partners Chamber of Commerce, disbursed more than $200 million last year to nonprofit organizations involved in the fight" against Obamacare. According to Watchdog Institute, the Koch brothers also made campaign contributions to Darryl Issa ($12,500) and Dennis Ross ($10,000), the two House members most actively involved with postal reform. The brothers also created Americans for Prosperity to advocate for their conservative agenda.
Americans for Prosperity, according to the Times, is immersed in the fight against Obamacare. One of the directors of Americans for Prosperity is James C. Miller III, former member the USPS Board of Governors (2003-2012) and chairman of the BOG in 2005, 2006, and 2007. He has been nominated by the White House to another term on the BOG, but the Senate oversight committee has not taken steps to move the nomination forward. Mr. Miller is a long-time advocate of privatization of the Postal Service, as indicated in this paper he wrote in 1985 and as reported in this 1988 LA Times article.
The Heritage Foundation is another group actively fighting Obamacare. According to Sourcewatch, the Foundation has received over $1 million from the Koch brothers through the Claude R. Lambe Charitable Foundation. The Heritage Foundation has a long history of advocating for privatization of the Postal Service. Back in 1986, for example, it circulated a “primer” on privatizing federal services, and in 2011 it published an article by James L. Gattuso, a senior fellow at the Foundation, that recommended deep cuts to the postal workforce, closing post offices and other facilities, and ending Saturday delivery. The article currently appears on the website of Darrell Issa’s Committee on Oversight & Government Reform.
October 4, 2013
The Postal Service and its real estate broker CBRE have created a new website advertising postal properties for lease. It’s the companion site to the USPS-CBRE Properties for Sale website, which went up in November 2011. The domain name for the new site was registered in April 2013, but the site may have gone online just in the past few weeks.
The Properties for Lease site currently lists 82 postal facilities, most of them post offices. The listings indicate the total square footage of the building and the vacant square footage available for leasing; in some cases, there are a few more details, like what floor the space is on or what it might be suitable for (office, retail, etc.). It would appear that the Postal Service plans to maintain a retail postal operation in the building and to lease out the area that isn't being used (like the space in the back where carriers used to work).
Thirty-three of the 82 listings are historic post office buildings; at least five are on the National Register of Historic Places. The new website may be an indication that the Postal Service is shifting strategies. Instead of selling historic post offices — a source of much controversy across the country — it has decided to lease out the extra space. The Postal Service often leases space in its properties, but it’s possible that the Properties for Lease website represents a new approach to the question of what to do with facilities with excess space, especially historic post offices.
The Postal Service has been using the existence of excess space as an explanation for why it wants to sell off post office buildings. Time after time, the Postal Service has said that mail volumes are falling, the building is too large, there’s too much space not being used, and a small retail outlet would suffice.
When communities have asked why not just lease out the extra space rather than selling the building, the Postal Service has not seemed very responsive. Bringing in the fast cash from a sale has seemed preferable to holding on to a historic landmark building. But there are many reasons why leasing would be a better idea.
One reason is that there is a federal regulation (41 CFR 102-73.20) that requires government agencies to "extend priority consideration to available space in buildings under the custody and control" of the Postal Service. In other words, as a matter of law, federal agencies should be looking at post offices for office space.
Leasing space is also encouraged by a Memorandum of Agreement between the Postal Service and the GSA, which supports an executive order that directs federal agencies to locate their facilities in business districts and urban areas. Under this agreement the Postal Service should be offering its excess space to the GSA.
Along similar lines, a 2012 GAO report recommended that the Postal Service do more to make its excess space available to other federal agencies. In its response to the GAO, the Postal Service stated, "In situations where USPS has identified underutilized space, we are actively and aggressively pursuing third party tenants where deemed appropriate by engaging CBRE, a National Real Estate Services Provider."
The new Properties for Lease website is the first sign that CBRE and the Postal Service are in fact aggressively seeking tenants. Until now, there has not been much indication that any effort has been expended to lease out the extra space in the historic post office buildings being sold. Coast to coast, from the Bronx and Chelsea in New York City to Venice, La Jolla, Ukiah, Redlands, and Berkeley in California, the Postal Service has decided that it will sell the building without looking at alternatives.
On Saturday, September 21, there was a "Day of Action to Save the Post Office" in the Bronx, New York. The event began with an "Emergency Meeting to Save the Post Office" at the Lincoln Hospital Auditorium, 234 East 149th Street. Among the speakers were Jacquelyn McCormick of the National Post Office Collaborate; Congressman Jose E. Serrano; Jonathan Smith, President New York Metro Area Postal Union, APWU; and Julio Pabon, a community activist who has filed appeals to stop the sale of the Bronx GPO.