The Senate puts the PRC in the backseat — or maybe not even in the car

February 9, 2014


On Thursday of this past week, the Senate held the second of two markup sessions on the postal reform bill, a.k.a. the manager’s or substitute amendment, submitted by Senators Carper and Coburn.  At the first session held the previous week, on January 29, a controversy arose over Section 301 of the proposed bill, which deals with postal rates and the role of the Postal Regulatory Commission.  The controversy resumed on Thursday.  

As originally proposed in the manager’s amendment, Section 301 does several things.  First, it takes the exigent rate increase that the PRC approved on a temporary basis and makes it the new base line.  The bill thus essentially overturns the PRC’s ruling in December and makes the 4.3 percent increase permanent, rather than limiting it to the time frame required to bring in $2.8 billion in profit (about 18 months to two years).

Section 301 also raises the current limit on annual rate increases from the CPI to the CPI plus one percent.  That would all but guarantee higher annual rate increases over the next few years.

In addition to dealing with these two specific rate matters, Section 301 transfers much of the responsibility for setting postal rates in the future from the PRC to the Postal Board of Governors.  The PRC’s role would be reduced to reviewing the BOG’s decision after the fact, rather than approving increases before they’re implemented. 

Finally, Section 301 gives the BOG the primary role in a 2017 rewrite of the ratemaking system.  The PRC can have some input and it will be able to veto the revision, but that's about all.

As Senator Carper explained at Thursday's markup, he and Senator Coburn decided to give the PRC "a very minimal role in terms of actually deciding what that new rate structure would look like" in the 2017 rewrite.  "We really put the Postal Service in the driver’s seat.  I don’t even know if the PRC was in the car, but certainly the Postal Service was in the driver’s seat.”  (video at 2:03:40)

Can it get much worse? The Senate tries postal reform, again

February 3, 2014


The Senate Committee on Homeland Security and Government Affairs finally took up its postal reform bill at a markup session on Wednesday, January 29.  The new S.1486 the committee took up is significantly different from the Carper-Coburn bill released last August.  The current version, aka the substitute bill or the managers’ amendment, has introduced changes to the rate system, regulatory oversight, and facility closings that are worth close scrutiny.

The leadership of the Postal Service has expressed satisfaction with the new substitute bill.  No wonder.  It reads like the fulfillment of PMG Donahoe’s and the Board of Governor’s wish list.  It grants them new powers over ratemaking, adds language regarding contract negotiations favorable to management, and creates a separate postal employee health plan within the current Federal Employee Health Benefit Plan (FEHBP).  The bill also addresses the retiree health benefit prefunding, while adding a new prefunding requirement for workman’s compensation.

Whatever its final form, the postal reform bill that comes out of the Senate will represent the next step in a process that has been going on since the Postal Service was created in 1971.  For the last forty years the leadership of the Postal Service has pursued a course that treats the postal network in terms of a corporate business model that simply provides a delivery service.  Postal leaders do not seem much interested in the view of the postal system as basic national infrastructure that connects American homes and businesses with each other and with their government.  They do not seem very committed to a broad vision of the universal service obligation.  They do not seem to understand what our Founders grasped so clearly — the important role of the postal network as a fundamental element of democracy, furthering access to information and creating connections in a way that bound the nation together.  

Postal Service releases post office closure and suspension lists for 2013

February 2, 2014

The Postal Service has released the official lists of post office closings and suspensions in FY 2013.  The lists come in response to a Chairman’s Information Request made as part of the Annual Compliance Determination Review (ACDR) conducted by the Postal Regulatory Commission.

The lists can be downloaded from the PRC website here.  We’ve also put them on Google docs for easy access: the closure list is here and a map here; the suspension list is here.  (Note the tabs for each sheet at the bottom of the spreadsheets.)

A discussion of the discontinuances and suspensions that have taken place over the past year can be found in this post.  Here’s a brief update.

Postal Service ignores moratorium on post office closings, shuts down Glenoaks Station

January 31, 2014

On September 19, 2013, in testimony before the Senate Homeland Security Committee, Postmaster General Donahoe made a pledge not to close post offices or processing plants while Congress debated postal reform.  That promise seemed dubious at the time because several post offices were closing at that very moment, but soon the closings did seem to come to a halt.

Aside from the PMG’s comment at the Senate hearing, there was never an official announcement of a moratorium on closings, but then on January 13, 2014, the Postal Service sent a letter to residents in Glencoe, Alabama, indicating that there was in fact a moratorium in effect. 

The Postal Service said that a notice it had sent the previous week announcing the potential closing of the Glencoe post office had been "issued in error."  As the letter went on to explain, "We are in a moratorium.  Any correspondence and activity concerning the proposed closing of Glencoe has been put on hold until further notice.”

Despite the PMG’s pledge and this acknowledgement that there’s a moratorium, the Postal Service is closing the Glenoaks Station post office in Burbank, California.  According to an article in the Burbank Leader yesterday, the Glenoaks post office closed its doors this month. 

The Postal Service has had plans to sell the building housing the Glenoaks post office since 2009, after a Facility Optimization study selected the facility for disposal.  Now those plans are finally being realized.   “We have to remove equipment and prepare it to market it,” Postal Service spokesman Richard Maher said. “Whatever we get for it would be revenue generation.”

Though the plans had been in the works since 2009, the Postal Service waited until March 2011 before announcing that it would be studying the Glenoaks post office for closure.  The discontinuance study was conducted that spring, but it would be two more years before a final determination was issued, on June 20, 2013.  

Congressman Adam Schiff, who represents the Burbank area, called the decision “misguided” and urged the Postal Service to reconsider.  Nine residents of Burbank appealed the decision to the Postal Regulatory Commission, and comments were also filed by yours truly, Steve Hutkins of Save the Post Office, on behalf of one of the petitioners. 

The Glenoaks appeal was a significant case because after the appeals were filed the Postal Service immediately filed a Motion to Dismiss in which it tried out a new argument for why the PRC should dismiss appeals.  Based on the fact that a few previous appeals had been dismissed because the closures were seen as part of a “rearrangement of retail facilities,” the Postal Service claimed that closing Glenoaks was also part of such a “rearrangement” so the appeal should be dismissed.

The Postal Service’s argument represented an unprecedented expansion of the scope of what a “rearrangement” could mean.  There were no other facility actions taking place in Burbank that might justify seeing the Glenoaks closure as part of a larger realignment of retail services.  The Postal Service had gone through a normal discontinuance procedure, and the post office was closing, pure and simple. 

Dismissing appeals has become an all-too-common practice with the PRC.  Of the last eleven appeals that have been filed, eight have been dismissed or rejected without review.  If the Glenoaks appeal had been dismissed on the grounds that it was part of a “rearrangement,” it would have opened the door to many more appeals being dismissed.  That denies communities the right to due process, and it allows the Postal Service to close post offices in an “arbitrary and capricious” manner without concern for subsequent review by the Commission or anyone else.


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