February 6, 2013
The U.S. Postal Service (USPS) today continued its tradition under the leadership of Postmaster General Patrick Donahoe of shooting itself in the foot. The only question that remains is: When will the madness end? By ending Saturday letter delivery in August 2013, as the USPS has proposed, millions of customers who take advantage of its services will be harmed, mail service will be slowed, and the USPS’s current death spiral will deepen.
It is unclear where Postmaster General Donahoe thinks he has the authority to make this change without Congressional approval. In making the move to end Saturday letter delivery, Postmaster General Donahoe has not only shown his complete disregard for the good of the USPS’s consumers, but he has also ignored the will of Congress. For decades, Congress has mandated six-day delivery. Congress must act to protect rural communities, small businesses, the elderly, and the disabled, among others by reasserting its authority over the U.S. Postal Service and stopping it from making such an irresponsible decision.
Postmaster General Donahoe would have us believe that this is one of many tough decisions that must be made to save the USPS, but nothing could be further from the truth. These are the decisions that are made by a leader without a clue and without a sense of what it takes to right the ship. He has ignored calls to implement ways of expanding postal services, many of which have been urged by the Postal Regulatory Commission.
The USPS’s financial crisis has primarily been caused by a congressional mandate, coming from the Postal Accountability and Enhancement Act of 2006 (PAEA), that the USPS prefund the next 75 years of retiree health benefits in just a decade, by 2016. This is something that is not required of any other federal government agency or private corporation. Not to mention that there is no actuarial justification for such an accelerated schedule to prefund this future obligation. PAEA effectively forces the USPS to prefund retiree health benefits for some of its future employees who haven’t even been born yet!
As a result, the USPS pays at least $5.5 billion each year into a fund for 75 years of future retiree health benefits in addition to paying $2.6 billion for the employer’s share of insurance premiums for the Postal Service’s current retirees. On top of this, according to reports from the USPS’s Inspector General, the USPS has overpaid $80 billion dollars to the Civil Service Retirement System and the Federal Employees Retirement System which the federal government refuses to return.
If Congress were to reverse PAEA and return the billions owed to the USPS, the U.S. Postal Service would not be facing a financial crisis. Since the enactment of PAEA, the USPS has realized net losses of $41 billion, nearly 80 percent of which can be attributed to PAEA’s unreasonable prefunding requirement. The USPS is the only large corporation that does not receive tax dollars or subsidies from the federal government (it has been self-sustaining) and which is a net creditor of Uncle Sam. Despite these facts, Congress has refused to act to fix the USPS’s financial crisis.
Postmaster General Donahoe has demonstrated that he lacks the political courage to stand up to Congress and tell them that they caused this mess and they need to fix it. Instead, time after time, he has chosen to take the easy road and dismantle the USPS piece by piece - whether it is by cutting post office hours, closing post offices, cutting service and delivery standards, increasing postage rates, or now ending Saturday delivery. These are not the decisions of a visionary or courageous leader. He certainly shows little continuity from the can-do verve of this nations’ first Postmaster General, Benjamin Franklin!
In April of 2012 I joined consumer groups Public Citizen, Consumer Action, the Gray Panthers, and Essential Information in calling for Postmaster General Donahoe’s resignation. I reiterate that call today. He is simply not up to the job demanded. And I am pleased to see that the National Association of Letter Carriers (NALC) has also called for the removal of Postmaster General Donahoe.
Ending Saturday delivery not only threatens the future of the U.S. Postal Service in the long term, but in the short term it harms small businesses’ ability to carry out their operations in a timely manner, may inhibit the elderly’s ability to receive important medication by mail, and will drive even more customers away from the USPS and toward private mail carriers like UPS and FedEx.
For More Information Contact:
Ralph Nader or Jeff Musto