What can Brown do for you? Congressman Ryan's UPS Express

August 14, 2012

Congressman Paul Ryan, who may be our next Vice President, hasn’t had much to say about the U.S. Postal Service. 

He has a statement on his website about the agency’s financial problems, but it basically just nutshells the bills put forward by Darrell Issa and Stephen Lynch.  The only thing of substance in the statement is Ryan’s rejection of the claim that the Postal Service has overpaid $50 to $75 billion into the CSRS pension fund.

Ryan has come out in favor of selling government property, which would presumably include the sale of post offices, and he advocates including government entities like the Postal Service in the federal budget.  Ryan also sponsored a bill naming a post office for Congressman Les Aspin (1938-1995), who represented Ryan’s district in Wisconsin from 1971 to 1993. 


Getting by with a little help from UPS

That would seem to be about all there is to the story, but today the Huffington Post reveals another interesting Ryan-USPS connection.  It involves the lobbying career of Ryan’s wife, Janna (Little) Ryan, who worked as a tax attorney and lobbyist for Pricewaterhouse Coopers and Williams & Jensen from 1998 to 2000 — the period just before she married Ryan, in late 2000.

Among Janna’s clients were the Cigar Association of America (which didn’t want cigars regulated like cigarettes), Vermont Yankee (a nuclear power plant that wanted more favorable tax treatment), and several big pharma and insurance companies. 

One of Janna’s biggest clients was the United Parcel Service, which basically didn't want the Postal Service's competition.

According to OpenSecrets.org, during the period that Janna lobbied for UPS (1998 – 2000), UPS spent over $5 million in lobbying efforts.  The Huffington Post article says that in 1998, Janna was part of a team that received $220,000 in fees for lobbying on behalf of UPS.

Not only was Janna lobbying for UPS, but in February 1999 (the HuffPost piece mistakenly says 2000), at just about the time Paul and Janna met, Congressman Ryan took a corporate-funded trip to Atlanta, where UPS is headquartered.  According to the Congressman’s financial disclosure report, the trip was paid for by UPS.

In addition to visiting UPS headquarters on UPS’ dime, Ryan has received significant campaign contributions from the shipper.  According to OpenSecrets, in 2000, UPS gave him $10,000, making it his fourth-largest contributor for the election cycle.  Over the course of his career, Ryan has received over $48,000 from UPS, which puts the company in his top 20 contributors (Koch Industries is sixth, with $63,000). 

Got Mail? Go get it — the Postal Service has other plans

August 13, 2012

In its never ending search for ways to cut costs and reduce the deficit, the Postal Service may have come up with a real money-saver: stop delivering the mail.

One of the biggest expenses incurred by the Postal Service is delivering the mail to your door or your curb.  It would be a lot cheaper if they just put the mail in a centralized location, like a neighborhood cluster box, and had you go fetch it yourself.

This great new idea for saving money came up in a debate last week on the Laura Ingraham show.  Congressman Dennis Ross (R-FL) and NALC president Fred Rolando were on the show to talk about plight of the Postal Service.  Ross made the usual argument that labor costs are too high and the Internet and email are driving down volumes, while Rolando explained that it was all a manufactured crisis caused by the $5.6 billion a year that Congress requires the Postal Service to pay into its retiree health care fund.

In the course of the debate, Congressman Ross explained that he and his co-sponsor on the House bill, Darrell Issa, did not want to dismantle or privatize the Postal Service.  “We want to save this institution,” said Ross.  “There are many ways we can do this.  We don’t have to cut rural post offices.  We don’t have to reduce the service delivery.”  

Ross even seemed to back off of the plan to eliminate Saturday delivery, although, he noted, “moving from six-to-five day is overwhelmingly favored by the public,” as indicated by a recent NY Times survey.  (12 minutes into the tape)

“But before we go to six-to-five,” suggested Ross, “let’s go from door-to-door to curb.  That will save anywhere from $3.5 to $5 billion a year.  Only 25% of postal recipients receive their mail door-to-door.  The rest of them receive it either in cluster boxes, PO boxes, or at the curb.  That right there is a tremendous savings that I think is a good way to go about it.”

Ross thus put closing post offices and five-day delivery on the back burner and moved the delivery point issue right to the front.  The days of having your mail delivered to your door or even your curb may be coming to an end.  The future is in cluster boxes.

It’s a different version of “the last mile” strategy — that’s when FedEx and UPS don’t want to incur the expense of delivering right to your home, so they hand off the parcel to the Postal Service.  The difference is, with this new “last mile” strategy, it’s the Postal Service who’s doing the hand-off, and guess who’s going to be covering the last stretch of getting the mail to your house? 


Postal Service posts a $5.2 gazillion loss, begs to be put out of its misery

August 10, 2012

Yesterday the Postal Service released its Form Q3, the financial report for the third quarter of the fiscal year.  The headlines wax poetic:

 “No more mail? US Postal Service begs Congress for help; warns it could go insolvent by next year” (NY Daily News)

"Postal Service unstoppable in rain, snow. But red ink?" (Christian Science Monitor)

“Postal Service reports $5.2 billion in 3rd quarter, poised to default again” (Fox)

“'Crisis of confidence' as USPS posts $5.2B quarterly loss” (FedNewsRadio).

The LA Times had the winner, though: “US Postal Service loses $2.4 million an hour in third quarter.”

Over the coming days, there will be more hyperbolic headlines about the losses and last week’s default on the health care payment, more hyperventilating about the House’s failure to pass a postal reform bill, and more lame editorials about why the Postal Service should be privatized.  No wonder it's impossible to have a thoughtful conversation about the plight of the Postal Service.

After you get past the headlines, most of the articles do acknowledge that a significant portion of the losses are the result of the retiree health care payments mandated by the 2006 Postal Accountability and Enhancement Act (PAEA).  They account for $3.1 billion of the third quarter’s 5.2 billion losses and over $9 billion of the $11.5 billion loss for the year-to-date. 

What the articles fail to mention, however, is that those payments actually represent two year’s worth of contributions to the retiree health care fund.  Since the Postal Service couldn’t make its $5.5 billion payment last year, the financial report is showing an ongoing obligation to make double payments this year. 

Excluding those payments, the Postal Service is heading for a $3 billion loss for the year.  But the double payments will make it look like the Postal Service lost over $14 billion in fiscal year 2012.  Thankfully, the headlines on that debacle won’t appear until the year-end financial report is released in mid-November — after the election.


Looking at the numbers

Here’s a summary of the current Form Q3 report, compared to the same time period for the previous two years (gathered from previous forms):

The Road to POStPlan: Breaking down the postmaster retirement numbers

August 6, 2012

Yesterday the Postal Service provided an update on how many postmasters have chosen to retire thanks to the $20,000 incentive offer.  Nearly 3,800 retired as of July 31, and about 300 will be retiring at the end of August and September, bringing the total to 4,100.  (The numbers are here.)

The Postal Service did not provide a list of the retiring postmasters or the impacted post offices, nor did it break down the numbers with respect to POStPlan.  

Over the past week, however, there have been dozens of news articles about retiring postmasters, and with their help, we can do some estimating.  The articles, by the way, are worth reading.  They show how much the postmaster is valued in a small town and how sorry people are to bid farewell.  They provide a glimpse into a world that’s being stamped out by POStPlan.

We reviewed the news articles for 50 postmasters who retired on July 31.  It’s a small random sample, so take the following with a grain of salt.  (The list is here, and some of the postmasters are represented in the slideshow.)

Of these 50 post offices, 22 were set to be downgraded to part-time hours under POStPlan, 7 will be upgraded to level 18, and 21 were not part of the plan.  

Based on those percentages, about 1,800 of the 4,100 retiring postmasters worked at a post office due to be downgraded, while the remaining 2,300 worked at offices that will remain full-time.

Some 3,100 of the 13,167 POStPlan post offices already had a postmaster vacancy, so there were about 10,000 impacted postmasters.  If about 1,800 chose retirement, there are about 8,200 postmasters who could be looking for a new full-time position.

On May 25, the Postal Service posted about 1,600 openings for postmasters. There should be about 2,300 more positions opening up soon thanks to the retirements.  (NAPUS says there will be a second round posting postmaster vacancies on August 21.  No word on how many positions will be available.)  The retirements and transfers to these new positions thus take care of about 5,700 of the 10,000 POStPlan postmasters.  That leaves 4,300 postmasters looking for a job.  If they don’t find one by 2014, they’ll be out of luck.

The Postal Service said it wouldn’t implement POStPlan until after the Postal Regulatory Commission issued its Advisory Opinion later this month.  But the retirements and the ensuing game of musical chairs are already well underway.

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