GOP and the US Postal Service: No, It's Not Raining
When last I ranted I promised to share any "gems" I found in the 2012 Republican Party Platform. I don't like posting too often, but traipsing across this item just got my blood boiling. Let's read:
Restructuring the U.S. Postal Service for the Twenty-First Century
The dire financial circumstances of the Postal Service require dramatic restructuring. In a world of rapidly advancing telecommunications, mail delivery from the era of the Pony Express cannot long survive. We call on Congress to restructure the Service to ensure the continuance of its essential function of delivering mail while preparing for the downsizing made inevitable by the advance of internet communication. In light of the Postal Service’s seriously underfunded pension system, Congress should explore a greater role for private enterprise in appropriate aspects of the mail-processing system.
Let's take this bold paragraph bit by bit, shall we? The very first sentence notes "dire financial circumstances." How dire are these, we should ask. According to the New York Times, the agency is caught in a classic bind, with its revenues falling due to growing internet traffic taking over communications previously carried over letter, and "decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs."
Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.
Wow, this sounds serious, doesn't it? Shouldn't something be done?!? Why are we still using "mail delivery from the era of the Pony Express" anyway? Aren't we a modern people here in these United States?
Hold on, Sunshine. Let's look at what might be happening beyond the hype. First, yes, labor is a much larger component to USPS operations compared to that of its two largest "competitors." (I put that last word in scare quotes for a reason to which I shall later return.) After all, both of the private delivery companies operate on a less-than-day-to-day basis for a majority of Americans, while the USPS delivers to every home and business almost every day. While all the delivery players operate fleets of trucks, driving mail literally from home to home in a dense urban setting is silly; it makes far more sense to drive the bulk of the mail to near the recipients, then walk the letters with the hired carriers. This increases the travel time for each letter, yes; but such a situation is unavoidable with, again, every addressed served every mail day.
Let's also not forget that both of the private operations operate more expensive vehicles than the USPS. I see both Fed Ex and UPS jets daily here at home under the final approach to Boeing Field, the busiest general purpose airfield in the country and an air hub for both big private delivery ops. By contrast, since they don't handle nearly as much overnight and time-sensitive deliveries, the USPS contracts air service with private carriers. Your letters fit nicely in the luggage hold of passenger planes, and for much less money than Fed Ex and UPS spend on their jets. That's a huge equipment advantage for the Postal folks, equipment that takes a bigger percentage-wise chunk from the final budgets of the big private two.
I don't mean to say with the above paragraph that the USPS doesn't pay well, but it turns out they don't pay nearly as much as the percentage of labor as cost per organization cited in the NY Times would lead one to believe. Here's a table showing comparisons between pay rates from a year ago. As Moshe Adler points out, that means "a UPS delivery driver earns 15% more in wages and 59% more in benefits than a postal service letter carrier." (I emphasized.) Adler continues, noting of the other guy,
The pay of Fed Ex delivery drivers is lower than even that of postal service letter carriers, but that only means that Fed Ex workers are even more grossly underpaid and an article about these workers and the anti-unionization activities that Fed Ex engages in against them would have been both more interesting and more fitting for Labor Day.
No, you're not going to find the answer to this seeming crisis by looking only at the first half of the GOP plank. Keep reading to this section: "In light of the Postal Service’s seriously underfunded pension system. . . ." Here is where the lies begin in earnest.
In 2006, a Republican-dominated House and Senate passed a bill signed into law by the most conservative president in our country's recent history, the Postal Accountability and Enhancement Act. Among regulatory changes to postal rate change authority (I wish I knew more about that; I suspect the new regulators would be able to thwart stamp price increases), the Wiki cites this doozy of a provision:
The PAEA stipulates that the USPS is to take any surplus at the end of a fiscal year, and put that amount into the Postal Service Retiree Health Benefits Fund to prepay for employees retirement costing the USPS a total of 500 billion dollars between 2007 and 2015.
(How could I not emphasize and underline?)
That's right. The Post Office is the only agency in the entire country required to prepay employee retirement and health benefits for 75 years in only 8 years. Allison Kilkenny discusses this unprecedented requirement:
Perhaps it was its booming history that first drew Congress' attention to the Postal Service in 2006 when it passed the Postal Accountability Enhancement Act (PAEA), which mandated that the Postal Service would have to fully fund retiree health benefits for future retirees. . . .
"It's almost hard to comprehend what they're talking about, but basically they said that the Postal Service would have to fully fund future retirees' health benefits for the next 75 years and they would have to do it within a ten-year window," says Chuck Zlatkin, political director of the New York Metro Area Postal Union.
It was an impossible order, and strangely, a task unshared by any other government service, agency, corporation or organization within the United States. The act meant that every September 30th, the USPS had to cough up $5.5 billion to the Treasury for the pre-funding of future retirees' health benefits, meaning the Postal Service pays for employees 75 years into the future. The USPS is funding the retirement packages of people who haven't even been born yet.
(Me doing that again.)
It gets worse. According to the article, the USPS has actually been overpaying its existing retirement benefits, one of the few organizations that has done this. After some audits, it was suggested that these overpayments be applied to the $75 billion total to relieve some of the crushing debt that is currently forcing the agency to close offices and curtail service. These suggestions have been turned into pending legislation, H.R. 1351, the United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011:
But there are political opponents that have no desire to see the USPS survive what is, for all intents and purposes, a stupid accounting maneuver. Namely, the GOP and moderate Democrats were the players behind the PAEA, and are now the same forces peddling the narrative that the Postal Service is broke, the union too demanding and the only solution is cuts, cuts and, oh yes, more cuts.
Speaking of cutting, Kilkenny also notes that further legislation is pending which would continue the USPS destruction already underway.
[Representative Darrel] Issa introduced the Postal Reform Act to Congress, a bill that Zlatkin says would "Wisconsin" the Postal Service. "[The bill would] give them the kinds of powers that the Super Committee is having to just go in there temporarily and do what has to be done: rip into the contracts, close post offices without hearings. It's basically the Postal Service Destruction Act." The bill has one co-sponsor: Dennis Ross. And both men just happen to be in charge of the House Oversight Committee. Between the "Save The Postal Service" H.R. 1351 and the Postal Service Destruction Act, Zlatkin asks rhetorically, "which is gonna come to a vote?"
Whether or not it comes to a vote, I very much doubt our current president would sign it. That doesn't much matter, though, since the bill and its Senate counterpart (no. 1625, introduced by John McCain) would need to both be passed and reconciled before signing.
So what might be a possible end game with the GOP tampering with the USPS? In a word, it's unions. After all, the USPS is the second largest employer in the country behind Walmart:
[H]ere we have a service that . . . employs over 574,000 union members. No wonder it became such a mouth-watering target for the GOP. It would be quite a feather in the cap of Darrell "the liberal hunter" Issa to take out one of the largest unions in the country and simultaneously give the US a nudge in the direction of total privatization by crippling one of the last great public services.
What Scott Walker did to the unions in Wisconsin is just a preview to the assault on worker organization the GOP in general opposes. And as the Party platform promises, the union jobs lost to the Post Office will, should the GOP get their way, provide an opening for "a greater role for private enterprise. . . ."
It's the last portion of that last plank sentence that might be the GOP's undoing, though. What exactly might they mean by "in appropriate aspects of the mail-processing system"? It turns out that the Founders intended the Postal Service not as a cash cow, but as a necessary service, and included its authorization in Article One. Courts have interpreted this mandate as an exclusive one; only the Post Office may deliver a letter in the US. FedEx and UPS get around this provision only by adding cost; they package the letters they might deliver in a package, meaning they aren't technically letters after they have been stuffed into cardboard envelopes. How many in the US will tolerate additional packaging-and the added costs inherent therein-just so a private carrier can legally handle postcards and Xmas greetings?
Despite this promised gloom and doom from the Elephants in the room, I prefer to take a long-term view of the future here. Yes, the Republican Party might be gunning to eliminate minimum wages in the Pacific Territories and postal worker unions; but in the future, these acts will only slow the inevitable. Legislate as they might, Lincoln was right. "Labor is prior to, and independent of, capital." And when the Baby Boomers start retiring in earnest (as they already are), there won't be enough replacement workers to fill their jobs.
The sheer number of boomers destroyed the labor movement by diluting the bargaining power of each worker. The GOP knows this, and is pre-emptively attempting to gut worker collective bargaining before the absence the boomers will create helps worker bargaining traction. They can try, but I doubt it will work. It doesn't matter if future jobs are union or no, if they suck, they will be left unfilled.
I'm going to stop reading this Platform thing for a while. It's too full of the stoopid, if not of the Pure Evil.
Restructuring the U.S. Postal Service for the Twenty-First Century
The dire financial circumstances of the Postal Service require dramatic restructuring. In a world of rapidly advancing telecommunications, mail delivery from the era of the Pony Express cannot long survive. We call on Congress to restructure the Service to ensure the continuance of its essential function of delivering mail while preparing for the downsizing made inevitable by the advance of internet communication. In light of the Postal Service’s seriously underfunded pension system, Congress should explore a greater role for private enterprise in appropriate aspects of the mail-processing system.
Let's take this bold paragraph bit by bit, shall we? The very first sentence notes "dire financial circumstances." How dire are these, we should ask. According to the New York Times, the agency is caught in a classic bind, with its revenues falling due to growing internet traffic taking over communications previously carried over letter, and "decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs."
Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.
Wow, this sounds serious, doesn't it? Shouldn't something be done?!? Why are we still using "mail delivery from the era of the Pony Express" anyway? Aren't we a modern people here in these United States?
Hold on, Sunshine. Let's look at what might be happening beyond the hype. First, yes, labor is a much larger component to USPS operations compared to that of its two largest "competitors." (I put that last word in scare quotes for a reason to which I shall later return.) After all, both of the private delivery companies operate on a less-than-day-to-day basis for a majority of Americans, while the USPS delivers to every home and business almost every day. While all the delivery players operate fleets of trucks, driving mail literally from home to home in a dense urban setting is silly; it makes far more sense to drive the bulk of the mail to near the recipients, then walk the letters with the hired carriers. This increases the travel time for each letter, yes; but such a situation is unavoidable with, again, every addressed served every mail day.
Let's also not forget that both of the private operations operate more expensive vehicles than the USPS. I see both Fed Ex and UPS jets daily here at home under the final approach to Boeing Field, the busiest general purpose airfield in the country and an air hub for both big private delivery ops. By contrast, since they don't handle nearly as much overnight and time-sensitive deliveries, the USPS contracts air service with private carriers. Your letters fit nicely in the luggage hold of passenger planes, and for much less money than Fed Ex and UPS spend on their jets. That's a huge equipment advantage for the Postal folks, equipment that takes a bigger percentage-wise chunk from the final budgets of the big private two.
I don't mean to say with the above paragraph that the USPS doesn't pay well, but it turns out they don't pay nearly as much as the percentage of labor as cost per organization cited in the NY Times would lead one to believe. Here's a table showing comparisons between pay rates from a year ago. As Moshe Adler points out, that means "a UPS delivery driver earns 15% more in wages and 59% more in benefits than a postal service letter carrier." (I emphasized.) Adler continues, noting of the other guy,
The pay of Fed Ex delivery drivers is lower than even that of postal service letter carriers, but that only means that Fed Ex workers are even more grossly underpaid and an article about these workers and the anti-unionization activities that Fed Ex engages in against them would have been both more interesting and more fitting for Labor Day.
No, you're not going to find the answer to this seeming crisis by looking only at the first half of the GOP plank. Keep reading to this section: "In light of the Postal Service’s seriously underfunded pension system. . . ." Here is where the lies begin in earnest.
In 2006, a Republican-dominated House and Senate passed a bill signed into law by the most conservative president in our country's recent history, the Postal Accountability and Enhancement Act. Among regulatory changes to postal rate change authority (I wish I knew more about that; I suspect the new regulators would be able to thwart stamp price increases), the Wiki cites this doozy of a provision:
The PAEA stipulates that the USPS is to take any surplus at the end of a fiscal year, and put that amount into the Postal Service Retiree Health Benefits Fund to prepay for employees retirement costing the USPS a total of 500 billion dollars between 2007 and 2015.
(How could I not emphasize and underline?)
That's right. The Post Office is the only agency in the entire country required to prepay employee retirement and health benefits for 75 years in only 8 years. Allison Kilkenny discusses this unprecedented requirement:
Perhaps it was its booming history that first drew Congress' attention to the Postal Service in 2006 when it passed the Postal Accountability Enhancement Act (PAEA), which mandated that the Postal Service would have to fully fund retiree health benefits for future retirees. . . .
"It's almost hard to comprehend what they're talking about, but basically they said that the Postal Service would have to fully fund future retirees' health benefits for the next 75 years and they would have to do it within a ten-year window," says Chuck Zlatkin, political director of the New York Metro Area Postal Union.
It was an impossible order, and strangely, a task unshared by any other government service, agency, corporation or organization within the United States. The act meant that every September 30th, the USPS had to cough up $5.5 billion to the Treasury for the pre-funding of future retirees' health benefits, meaning the Postal Service pays for employees 75 years into the future. The USPS is funding the retirement packages of people who haven't even been born yet.
(Me doing that again.)
It gets worse. According to the article, the USPS has actually been overpaying its existing retirement benefits, one of the few organizations that has done this. After some audits, it was suggested that these overpayments be applied to the $75 billion total to relieve some of the crushing debt that is currently forcing the agency to close offices and curtail service. These suggestions have been turned into pending legislation, H.R. 1351, the United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011:
But there are political opponents that have no desire to see the USPS survive what is, for all intents and purposes, a stupid accounting maneuver. Namely, the GOP and moderate Democrats were the players behind the PAEA, and are now the same forces peddling the narrative that the Postal Service is broke, the union too demanding and the only solution is cuts, cuts and, oh yes, more cuts.
Speaking of cutting, Kilkenny also notes that further legislation is pending which would continue the USPS destruction already underway.
[Representative Darrel] Issa introduced the Postal Reform Act to Congress, a bill that Zlatkin says would "Wisconsin" the Postal Service. "[The bill would] give them the kinds of powers that the Super Committee is having to just go in there temporarily and do what has to be done: rip into the contracts, close post offices without hearings. It's basically the Postal Service Destruction Act." The bill has one co-sponsor: Dennis Ross. And both men just happen to be in charge of the House Oversight Committee. Between the "Save The Postal Service" H.R. 1351 and the Postal Service Destruction Act, Zlatkin asks rhetorically, "which is gonna come to a vote?"
Whether or not it comes to a vote, I very much doubt our current president would sign it. That doesn't much matter, though, since the bill and its Senate counterpart (no. 1625, introduced by John McCain) would need to both be passed and reconciled before signing.
So what might be a possible end game with the GOP tampering with the USPS? In a word, it's unions. After all, the USPS is the second largest employer in the country behind Walmart:
[H]ere we have a service that . . . employs over 574,000 union members. No wonder it became such a mouth-watering target for the GOP. It would be quite a feather in the cap of Darrell "the liberal hunter" Issa to take out one of the largest unions in the country and simultaneously give the US a nudge in the direction of total privatization by crippling one of the last great public services.
What Scott Walker did to the unions in Wisconsin is just a preview to the assault on worker organization the GOP in general opposes. And as the Party platform promises, the union jobs lost to the Post Office will, should the GOP get their way, provide an opening for "a greater role for private enterprise. . . ."
It's the last portion of that last plank sentence that might be the GOP's undoing, though. What exactly might they mean by "in appropriate aspects of the mail-processing system"? It turns out that the Founders intended the Postal Service not as a cash cow, but as a necessary service, and included its authorization in Article One. Courts have interpreted this mandate as an exclusive one; only the Post Office may deliver a letter in the US. FedEx and UPS get around this provision only by adding cost; they package the letters they might deliver in a package, meaning they aren't technically letters after they have been stuffed into cardboard envelopes. How many in the US will tolerate additional packaging-and the added costs inherent therein-just so a private carrier can legally handle postcards and Xmas greetings?
Despite this promised gloom and doom from the Elephants in the room, I prefer to take a long-term view of the future here. Yes, the Republican Party might be gunning to eliminate minimum wages in the Pacific Territories and postal worker unions; but in the future, these acts will only slow the inevitable. Legislate as they might, Lincoln was right. "Labor is prior to, and independent of, capital." And when the Baby Boomers start retiring in earnest (as they already are), there won't be enough replacement workers to fill their jobs.
The sheer number of boomers destroyed the labor movement by diluting the bargaining power of each worker. The GOP knows this, and is pre-emptively attempting to gut worker collective bargaining before the absence the boomers will create helps worker bargaining traction. They can try, but I doubt it will work. It doesn't matter if future jobs are union or no, if they suck, they will be left unfilled.
I'm going to stop reading this Platform thing for a while. It's too full of the stoopid, if not of the Pure Evil.