USPS Announces 140 Plant Closures While Senate Postal Reform Bill Languishes in House
NEW YORK, May 18--In Jacques Tati’s satirical comedy “Jour de Fete” (1949), the village postman who delivers mail on his bicycle is dazzled by the speed and efficiency of the US postal service, shown as a movie-within-a-movie at the county fair. He scarcely could have anticipated the dire financial straits in which the once-exemplary, well-equipped USPS—the only delivery service reaching every address in the country --now finds itself.
This week USPS, which receives no tax dollars, reported a $3.2 billion deficit for January-March 2012, up from $2.2 billion a year ago. John Dennie, who worked for 14 years as a letter carrier and for 14 years as a mail handler on Staten Island, explains the often-overlooked reason for the deficit, usually attributed to the growth of electronic communication.
“The reason for the deficits that the post office has been running since 2006,” says Dennie, “is the Postal Accountability and Enhancement Act (PAEA) passed by Congress in 2006, which in part restricted the Post Office’s ability to compete with Fedex and UPS.”
FEDEX and UPS are both members of a powerful corporate lobbying group, ALEC, the American Legislative Exchange Council, founded in 1973. PAEA passed on a voice vote, with no record of who voted for or against it.
“But the most egregious part of PAEA,” Dennie says, ”was the requirement that the Post Office prefund its retirement benefits 75 years into the future in a ten-year window to the tune of about $5 and a half billion a year. “
While first-class mail continues to diminish, for business, bulk mail and parcel post and all other classes of mail, 2005, 2006 and 2007 were the highest years ever in volume.
Minus the pre-funding obligation, the USPS would have accumulated a surplus of $611 million during the four-year period since the prefunding requirement was implemented.
Not all postal services are suffering. And USPS is exploring new revenue streams such as the popular Every Door Direct Mail, says District Manager William Schnaars.
Designed to overhaul the Postal Service, the 21st Century Postal Service Act (S 1789), which passed the Senate in April, only partially addresses USPS’s predicament.
“Supposedly it changes the amortization schedule from 10 years to 40 years on the pre-funding,” says Dennie. “It also calls for another $1 billion refund for overpayments made by the Postal Service to the Treasury for USPS’s two different pension systems, Civil Service Retirement System and the Federal Employee Retirement System. According to most actuarial studies, they overpaid into both of those funds.”
At present, S1789 is languishing in the House.
“If 1789 was passed by the House in its present form and went on to become law, it would refund $11 billion of the pension overpayments, to be used for early retirement incentives, so that when the post office closes facilities they’ll be able to reduce their employee complement.
“Right now, the unions have a no lay-off clause in their contract. So if they close or consolidate a facility, those employees still have a job.
As for “Cutting the hours of 13,000 rural post offices instead of closing them,” says Dennie, “that’s skirting the law. Title 39 US Code Section 404B states that you can’t close a rural post office solely for revenue reasons.”
Presumably impatient with the snail pace of legislation, on May 17, USPS announced the proposed consolidation of 140 of its 461 mail processing centers. In New York City the Staten Island plant is the only one on the hit list, the Bronx facility having been closed in October 2011. All mail from the Bronx is rerouted to the Morgan facility on Ninth Avenue and 29th Street in Manhattan with consequent delays in service.
“At five o’clock you can see the 7-ton trucks lining up on Ninth Avenue,” says Frank Couget, 35, a shop steward and mail carrier at Times Square for 12 years.
Other cost-cutting measures are threatened.
“The proposal to eliminate Saturday delivery, S1789 simmply delays that for 2 years. And the beginning of these plant closings means the total gutting of the Post Office’s ability to maintain any kind of service standards,” says Dennie. “The service standards will be drastically degraded to the point where they’ll drive away the customer base, and they’ll be able to snag the post offices and privatize them.”
But Rep. Jerry Nadler, reached by email this morning, is determined not to let that happen. He supports restructuring the $5.5 billion annual Retirement Health Benefit prepayment requirement.
“As I strongly believe that the USPS is a critical government service for the American public, I am firmly against the privatization of this service,” states Rep. Nadler, “I’ve worked hard to preserve the stations in my district – including those in the Village – and have, fortunately, had a high degree of success.”
--Liza Béar
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