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The Postmaster General clears up some mixed messages

April 7, 2013

Postmaster General Donahoe gave one of his State of the Postal Service talks earlier this week.  The PMG wanted clear up what he characterized as “mixed messages."  Apparently there are folks out there — the media, the unions, postal workers, someone — saying things that are incorrect and misinformed.  Fortunately, the PMG was ready and willing to straighten out his employees on these mixed messages. 

 

On Saturday delivery

One thing that the PMG said “just amazes me” is when people say, “Well, first it's five-day, then it's going to be four [days of delivery, then] three, two, one.”  The PMG went on to say, “Unless their routes have no mail in them, I don't know how in the world you would deliver less than five days a week.  Five-day delivery is going to be critical for business mail, for commercial first-class, and it's very critical to keep our costs down overall when you deliver packages. That's a big advantage that we have….  So the idea that there's plans on moving from six to five and then four, three, two — there's nothing to that.”

It’s hard to imagine where anyone would have gotten the idea that the Postal Service might go beyond eliminating Saturday delivery to something like three-day delivery.  

On July 19, 2011, USA Today ran an article reporting on an interview with the Postmaster General.  One of the topics was the likelihood of ending Saturday delivery.  It has "a much better chance today than a year ago,” said the PMG, but “I don't know if I'd say 'likely' yet."  

Asked about the long term, the PMG told USA Today, "At some point, we'll have to move to three days a week of mail delivery, possibly in 15 years.” 

 

On the legality issue

When the PMG announced his plan to move to five-day delivery in August, he suggested that current law permits the Postal Service to make the change, so he didn't need to wait for new legislation.  “We think we’re on good footing with this,” he said. “We think right now the opportunity exists to make the changes on our own.”

That came as a surprise to many.  For years, the Postal Service has been saying that it wanted to eliminate Saturday delivery but needed Congressional approval first.  In fact, the Postal Service's five-year business plan presented in February 2012 describes five-day delivery as "requiring legislative changes to achieve," and the USPS FAQ page on five-day still says, “Congress must elect not to renew the legislation requiring the Postal Service to deliver six days a week.”

A couple of weeks ago, the GAO confirmed that view in a letter to Congressman Gerald Connoly saying that the Postal Service continues to be bound by legislation requiring delivery six days a week.  

In his talk last week, the PMG might have cleared things up by saying where he stood on the issue now that the GAO and several members of Congress have weighed in.  Instead, he simply said, “There's a lot of discussion about whether we are prohibited from moving in that direction.  I will tell you this.  We have a board meeting coming up in a couple weeks.  The board of governors will discuss the next moves that we've got to make and we'll go from there.”

In order to clarify matters, then, the PMG suggested that maybe the BOG will stick by its new position that the Postal Service can act on its own, or maybe it will shift back to its original position that Congressional approval is required, or maybe the Board will come up with a completely new move.  

 

Privatizing the post office: The NAPA/Pitney Bowes study on reinventing the retail network

April 1, 2013

About three weeks from now, postal insiders and innovative outsiders will convene in Washington DC for the PostalVision 2020/3.0 conference to discuss the future of the Postal Service.  Called "Positioning America for the New Millennium,” the event will focus on "a constructive approach to re-inventing today’s broken Postal Service model for future generations."

Among the headliners speaking at the event will be David M. Walker, a former Comptroller General, the first President and CEO of the libertarian Peter G. Peterson Foundation, and currently Founder and CEO of the Comeback America Initiative, which promotes fiscal responsibility (by cutting social programs).

Mr. Walker will probably devote much of his talk to discussing the privatization of the Postal Service.  That’s because he is the chair of a five-member panel that the National Academy of Public Administration (NAPA) asked to review a recent proposal on privatization. 

The proposal is called “Restructuring the U.S. Postal Service: The Case for a Hybrid Public-Private Partnership.”  It describes a postal system in which the private sector would take care of the “upstream” — the retail and mail processing work — while the public sector would remain responsible for the “downstream” — delivering the mail through its network of “trusted letter carriers," the “feet on the street,” as the proposal puts it.

NAPA has a long-standing interest in postal matters, and its President and CEO is Dan Blair, a former member of the Postal Regulatory Commission, so it’s not surprising that NAPA would focus on the Postal Service right now.  With funding support from Pitney Bowes, NAPA assembled a panel to subject the proposal to what it describes as a “rigorous evaluation.” 

Despite the apparent conflict of interest involved with taking money from a key player in the mail industry, a company that would profit significantly from privatization (as discussed in this earlier post), the NAPA report is officially titled “An Independent Review of a Thought-Leader Concept to Reform the U.S. Postal Service.” 

When the panel was first announced, the NAPA website provided brief biographies for the participants, and in the bio for one member of the study team, the review was referred to as “the Pitney Bowes study.”  That bio was subsequently revised and the reference to Pitney Bowes purged.  In the discussion that follows, we’ll refer to the original proposal as the Thought-Leader Concept, and we’ll refer to Mr. Walker’s review of the proposal as the NAPA/Pitney Bowes study.

 

The retail end of the upstream

The NAPA/Pitney Bowes report runs to over 50 pages, but very little of it examines one of the key parts of the Thought-Leader Concept — the privatization of the retail end of the Postal Service’s operations.  All told, there are maybe two pages’ worth of discussion on this topic. 

The Thought-Leader Concept says that “the new postal system” being envisioned “will reinvent the concept of retail access for consumers.”  Under the new system, “there will be an explosion of options for the public to conduct postal business.”  You’ll be able to do postal business at retail stores, gas stations, schools, coffee shops, movie theaters, or any other location that is interested and meets USPS requirements. 

The proposal also suggests that the Postal Service would continue to operate a small number of retail centers, for locations where no other postal options are available or where it is more beneficial to maintain the USPS offices.

In its review of the proposal, the NAPA/Pitney Bowes study has little more to say about this reinvention of the retail system.  It explains that Contract Postal Units (CPUs) and Village Post Offices (VPOs) are postal operations housed in private businesses, and it provides a few numbers (drawn from a recent GAO report) about how many there are right now.  There's also reference to the fact that some people have recommended creating a BRAC-like commission to help close facilities (it adds, in bold, “Congressional action would help”).

But that’s about it.  There’s no discussion of how much money privatization of the retail network might save, nothing about how postal services might decline and push away revenues, nothing about how small businesses might suffer, and so on.  We're just supposed to imagine an "explosion of options" that will make it much easier for people to do postal business.

 

Legacy for Sale: Historic Post Offices on the Market

March 8, 2013


The New York Times has an excellent front-page article by Robin Pogrebin about the Postal Service’s push to sell off its historic post office buildings.  It includes a great photo scroll, and it's getting lots of very lively comments.

As the Times explains, the Postal Service owns nearly a quarter of its 31,000 post offices (it leases space for the rest), and over 1,100 of them were built during the 1930s by FDR's New Deal.  There are over 2,000 post offices either on or eligible for the National Register of Historic Places.

Now all of these post offices are all in danger of being sold off to private businesses.  In its annual report to Congress, the Postal Service says it has earmarked 600 properties for disposal.  It doesn't say how many are historic.

About a dozen of these historic post offices have been sold recently, and another 40 are listed as for sale or about to be put on the market.  Here's a map showing where they're located:

As the Times notes, historic preservationists are concerned about how the Postal Service is going about the sales and what happens to the buildings after they're sold. 

“Our biggest concern is the way they’re going about it isn’t transparent,” said Chris Morris, a senior field officer for the National Trust and project manager for post office buildings. “A lot of us are very confused about the process.”

Advocates say there have been too few public discussions or assurances that prized buildings will be protected.  Concerns about the post offices “are overwhelming the state historic preservation offices,” said Carol Lemlein, president of the Santa Monica Conservancy.

“There is very little confidence in the Postal Service’s ability to execute a process in a manner that will really protect the buildings,” she added.

The other problem is what happens after the building is sold.  In 2009, the New Deal post office in Virginia Beach was torn down to make room for a Walgreens (which is now an “authorized postal provider” selling stamps). 

More often, the post office is turned into a commercial space, like a high-end boutique, or private offices, like a real estate company.  As the Times points out, historic preservations are concerned that “when these post offices close … important public buildings become private preserves.”


There's more about the legal issues involved in the Postal Service's disposal process in this post from earlier in the week.  To learn more about the country’s legacy of historic post offices and the fire sale going on, check out this resource page.

Bailout BS: Darrell Issa’s Misinformation Campaign about the Postal Retirement Funds

March 3, 2013

The House Committee on Oversight and Government Reform, chaired by Congressman Darrell Issa, has a website entitled “Saving the Postal Service.”  According to the website, “H.R. 2309, the Issa-Ross Postal Reform Act, is the only legislation that saves the Postal Service from financial collapse.” 

Issa would save the Postal Service by dismantling it.  His legislation would end Saturday delivery, cut benefits to postal workers, remove the no-layoff clause from union contracts, eliminate hundreds of thousands of jobs, reduce the oversight authority of the Postal Regulatory Commission, and make it easier to close post offices.  Its BRAC-style task force would “consolidate redundant post offices” in order to save at least $1 billion a year — a goal that would require closing at least a third of the country’s 32,000 post offices.

Issa’s website features a cute little video called “Postal Crisis 101.”  An animation shows dollar signs moving from taxpayers to postal workers while the narrator explains that unless Issa’s legislation becomes law, the taxpayer is going to be on the hook for the cost of retirement benefits for postal workers.  The word “bailout” gets a lot of attention.

The video says that opponents of postal reform want “to cover this up with a fake accounting gimmick.  They call this an overpayment.” 

The video is just over a minute long, so there’s no time to explain the overpayment “gimmick,” but the website has another page that goes into more detail.  It’s entitled “Why the ‘Postal Overpayment’ Is Really A Taxpayer-Funded Bailout.” 

On this page, Issa attempts to debunk what he characterizes as three “myths” about the overpayments in the retirement funds by giving us what he calls the "facts."   But Issa's narrative about the funds omits many important details and gives a very distorted picture.  

It's rather ironic that this misinformation campaign was paid for with our tax dollars — the same tax dollars Issa says he wants to protect.  

Here’s a rundown of the three “myths,” Issa’s “facts,” and the rest of the story.  

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On Privatization

Good Reading on Postal Privatization

Also: Sarah Ryan's "Understanding Postal Privatization: Corporations, Unions, and the "Public Interest"

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