Below we see a newly appointed Post Master General who coincidently has the name of BRENNAN----CIA DIRECTOR HAVING THE SAME. The only method of communication not completely taken by global Wall Street and NSA surveillance is the USPS-----with letters inside envelops harder to intercept but NSA is developing surveillance technology that will be able to read folded letters inside envelops. I have not formerly traced Megan's connection to CIA DIRECTOR BRENNAN----I simply see this as a public policy to investigate.
WE THE PEOPLE have these centuries taken our US mail for granted---it seems to have always been there yet it is yet another policy that grew during the FDR NEW DEAL last century -----and it has been the object of attack for privatization by global Wall Street in the US----in Europe----in UK-----and all other nations having a public postal system. Global Wall Street does not want free communications it cannot control as with internet phones, email, and websites. As with all Federal privatizations and dismantlement----these policy stances grew during CLINTON/BUSH/OBAMA. Congress at the time of breaking Glass Steagall and moving forward to EMPIRE-BUILDING GLOBAL NEO-LIBERALISM----passed policy meant to kill the post office as always with DEBT----mentioned in this article----the PRE-PAYMENT OF ALL FEDERAL PENSION FUNDING FOR ALL EMPLOYEES----never before done in public agencies----never required of private businesses and yet we were told our US Post Office must operate like a business and compete with private carriers like UPS and FED-X. Of course this pre-payment of hundreds of billions of dollars taken from our USPS operating funds was not competive---it was meant to cripple our USPS' ability to compete----and it did these few decades.
Eric Katz | December 23, 2016
Obama Administration Makes Long-Desired Change to Postal Service Pensions
The U.S. Postal Service could finally have its payments into the federal employee pension account calculated using assumptions from its workforce specifically, rather than the federal workforce as a whole, which has long been a sticking point at the mailing agency.
USPS leadership has for years argued its payments into the Federal Employees Retirement System and the Civil Service Retirement System have been too pricey due to the difference between the demographics of its employees and the rest of government. Salary growth and workforce characteristics of the Postal Service differ significantly from those of other federal organizations--postal workers generally remain in a similar pay grade throughout their careers while non-postal feds generally see their salaries increase significantly; and postal workers generally die younger than the rest of the federal workforce. Under a proposed rule issued by the Office of Personnel Management on Thursday, the Postal Service would make payments into the pension funds using a separate calculation based exclusively on its employees.
While estimates have differed, postal reform advocates and the agency itself have said it has overpaid into the accounts to the tune of billions of dollars. A 2012 report commissioned by the USPS inspector general estimated USPS’ FERS surplus has reached $11.4 billion due to a growing gap between the salary of the average postal worker and the salaries of other federal employees, among other factors.
The Office of Personnel Management, however, said the surplus is closer to $2.6 billion due to lower long-term interest rates than the agency originally used in its calculations. In its fiscal 2016 budget, the White House said the overpayment amounted to $1.5 billion. President Obama has consistently called for the postal-specific calculation, as have numerous iterations of proposed postal reform put forward in the last several sessions of Congress. Those proposals have called for OPM to refund the overpayments back to the Postal Service.
OPM said in 2012 it was legally required to make its calculation based on governmentwide, rather than postal-specific, calculations. OPM did not immediately respond to an inquiry into the change. The agency said in the proposed rule it made the change after reviewing a request from the Postal Service. A USPS spokesman said the exact implications of the rule were unclear, explaining it might not contain everything the agency wanted but would be helpful. USPS plans to meet with OPM next week to go over the details of the proposal.
OPM suggested making additional calculations specific to each class of FERS contributor; federal employees currently pay one of three different percentages toward their pensions based on when they were hired, ranging from 0.8 percent to 4.4 percent of their paychecks.
In 2013, Rep. Stephen Lynch, D-Mass., introduced a standalone bill to require OPM to create a postal-specific formula to determine its pension fund payments. Noting USPS’ fiscal difficulties, the agency’s IG has said, “The Postal Service cannot afford to make pension contributions that are not necessary for future benefits.” Advocates for the Postal Service have long called for the reform, with National Association of Letter Carriers President Fredric Rolando calling it a “nagging” problem. An NALC official said Thursday it was unclear if the rule would implement everything they had pushed for, but it was at least moving the issue in the right direction.
Earlier this year, Postmaster General Megan Brennan cited pension overfunding as one of four key issues that had to be addressed for her agency to sign off on any reform effort.
When we shout against a Clinton or Obama for what a Post Master General does it is because this Federal agency has an APPOINTED LEADER----AND CONGRESS CONFIRMS THIS LEADER. So, the head of this Federal agency is not necessarily working for WE THE PEOPLE as consumers or for our US post office workers ---indeed when we have global Wall Street pols---CLINTON/BUSH/OBAMA----these appointed leaders will NOT BE WORKING FOR THE 99% ----they will be working for team global Wall Street and that means our US Post Master General will be working to privatize and end our public Post Office. This is what an Obama appointed Post Master Donahue did these several years-----and look who is shouting loudly below-----Delaware's CARPER. Those thinking Joe Biden of Delaware is BLUE COLLAR JOE----don't understand that Delaware is ground zero for global Wall Street and global corporations and all of this massive corporate fraud and corruption. So, yes, a Delaware's Carper is a raging global Wall Street player serving as a Democrat PRETENDING TO WANT TO PROTECT OUR USPS.
Here we see the structure of governance for our USPS----an appointed board which Carper reminds us while under global Wall Street pols is a CORPORATION WITH SHAREHOLDERS. Our government was not considered a corporation with shareholders in modern history ----it was as a colonial entity. the colonies of Maryland and Massachusettes for example were corporations tied to a KING'S appointed leaders ----the American Revolution and US Constitution made our US government an agency of CITIZENS ------this is why WE THE PEOPLE shouted when a Supreme Court said corporations are people also having no legal ties to modern US history.
CARPER is simply stating that CORPORATIONS ARE PEOPLE ----OUR FEDERAL GOVERNMENT IS A CORPORATION TIED TO SHAREHOLDERS WHO HAPPEN TO HAVE CONGRESSIONAL POLS THINKING THOSE SHAREHOLDERS ARE GLOBAL CORPORATIONS AND THE GLOBAL 1% AND THEIR 2%----
It doesn't bode well for our public USPS when global Wall Street CLINTON/BUSH/OBAMA all think of it as owned and operated by global Wall Street.
'Without naming Sanders, Carper said the failure of the Senate to fill the empty seats on the Board of Governors “is worse than unacceptable. I believe it’s shameful.”
No public corporation would be allowed by its stockholders to run without a board of directors overseeing the firm’s operations, he said'.
This is where FEELING THE BERN------LEFT SOCIAL DEMOCRATS must not be SHEEP-------Bernie Sanders quit and returned to being an establishment pol---he has supported Clinton neo-liberals throughout the general election---he has given shelter to election frauds that would have removed a Hillary in the primary and a Trump in a general election ----we do not except every policy Bernie Sanders supports because some of those policies were global Wall Street neo-liberal policies and that included his stance on saving our USPS. The problem today is not a rate increase----the problem is these several years under Donahue dismantled much vital infrastructure for the USPS that it can no longer function efficiently or competitively----WHICH WAS THE POINT OF ALL THOSE POLICIES COMING FROM GLOBAL WALL STREET.
Here we see our USPS was attached to HOMELAND SECURITY ------Brennan-----HMMMMMM
'The Senate Homeland Security and Governmental Affairs Committee held a hearing for the latest candidate for the Postal Service’s Board of Governors.
Yes, that is the panel of nine presidential appointees who are charged with overseeing the USPS'.
A tough first year for Postmaster General Megan Brennan
April 22, 2016 08:47 AM
By Bill McAllister, Washington Correspondent
It’s been a rough start for the nation’s 74th postmaster general.
Since taking office in February 2015, Megan J. Brennan has endured setback after setback in her attempts to right the troubled United States Postal Service.
Both Congress and the federal courts have rejected her repeated pleas to preserve the 49¢ first-class stamp.
That created what the USPS described as a “forced” price reduction in stamp prices on April 10. The decision is expected to cost the USPS about $2 billion a year.
Brennan urged the Postal Regulatory Commission to put some limits on its rate-making rules, but the commission rejected her request as premature.
There was, however, a sign of hope for the USPS on April 21 — albeit a small sign.
The Senate Homeland Security and Governmental Affairs Committee held a hearing for the latest candidate for the Postal Service’s Board of Governors.
Yes, that is the panel of nine presidential appointees who are charged with overseeing the USPS.
And, yes, that is the panel that has been reduced to one member thanks to objections primarily raised by Sen. Bernie Sanders of Vermont.
But with questions being raised about the viability of Sanders’ presidential campaign, the Homeland Security Committee moved quickly to act on President Obama’s latest nominee for the postal board.
The nomination of Jeffrey A. Rosen of Virginia, a former Bush administration budget and transportation official, was announced by the White House March 17. A month later he got a hearing, something of a speed record for a postal issue.
Whether Rosen can get past the holds that Sanders has placed on Obama’s other postal board nominations remains to be seen.
For the moment, however, the hearing was a sign that Congress still hopes to give the Postal Service a workable oversight board.
“There is no escaping that the U.S. Postal Service is confronting very substantial challenges, both near-term and longer term,” Rosen told his Senate hearing.
If confirmed, Rosen said he could delve into the Postal Service’s problems “unbiased by personal participation in particular debates” about past postal issues.
Sen. Tom Carper, D-Del., who has been pushing for legislation to help the USPS for several years, welcomed Rosen’s nomination, saying he is facing “a tough assignment, if he’s confirmed.”
“I believe we have an opportunity here to inject some badly needed talent into the Postal Service at a time when the agency … is in grave need of independent oversight and direction,” Carper said in his prepared remarks.
Without naming Sanders, Carper said the failure of the Senate to fill the empty seats on the Board of Governors “is worse than unacceptable. I believe it’s shameful.”
No public corporation would be allowed by its stockholders to run without a board of directors overseeing the firm’s operations, he said.
“Congress needs to do its job and protect postal customers, as well as the investments of American taxpayers, by filling these positions,” Carper said.
Stamp business on Capitol Hill
Reps. Mark Takai, D-Hawaii, and Judy Chu, D-Calif., are circulating a petition among members of the House seeking signatures for a stamp to honor Japanese Americans who served in the U.S. Army in World War II or were incarcerated in camps during the war.
2017 marks the 75th anniversary of the beginning of those camps, noted the draft petition.
“This stamp will also serve as a constant reminder that civil liberties belong to us all — not just a select few,” states the petition.
Here we see REAGAN era concerns with our ability to meet public trust obligations---you know that same concern with SS and Medicare Trusts that saw tripled payroll tax deductions to assure baby boomers had their Trusts fully funded---and then those trusts were raided during CLINTON/BUSH/OBAMA. So, Reagan did the same with our USPS pension and health benefit funds for the same reason. No one paid more than our middle-class Post Office workers to assure their pensions and benefits were covered----there was no shortfall-----what happened to USPS pensions and benefits was the same as happened to all corporate and government pensions and benefits----global Wall Street frauds and corporate corruptions kept these LEGAL CONTRACTS from being honored.
'In the late 1980s, Congress became concerned that the Postal Service would be unable to meet its pension liabilities, so it passed a series of laws to increase the agency’s payments. In 1989, for example, Congress required the Postal Service to pay for cost-of-living adjustments for its annuitants retroactive to 1986. The following year, Congress again increased the charges to the Postal Service for COLA payments by pushing back the applicable date to 1977. In 1993, Congress required the Postal Service to pay $693 million for past interest which had accrued as a result of the unfunded liability for COLAs and health benefits'.
This was the 1980s----these same kinds of huge pre-payments and COLA increases occurred in the 1990s under Clinton----and again in the 2000s under Bush-----of course Obama did the same-----each time we were told GLOBAL WALL STREET POLS ARE SIMPLY TRYING TO SAVE OUR USPS AND THESE NOBLE POSTAL EMPLOYEE BENEFITS. As with our Federal public trusts SOCIAL SECURITY AND MEDICARE---fully funded and pre-paid by WE THE PEOPLE for all baby boomers would need-----Obama and Congressional US Treasury and bond market fraud with national debt of $20 trillion will junk bond these USPS health benefits and pensions----we already KNOW THAT.
Keep in mind----many of our USPS employees are those military veterans----this Federal job was acknowledgement that our veterans deserved good employment after military service and guess what---THAT $20 TRILLION US TREASURY BOND MARKET FRAUD JUNK BONDED THOSE MILITARY PENSIONS AS WELL......so this article addresses how both LEGAL CONTRACTS AROUND PUBLIC EMPLOYEES ARE BEING DISMANTLED while global Wall Street pols pretend to be trying to save them.
Transferring the military obligationThe issue of pensions for veterans has a long, complicated history, but at its heart is a basic question. When a vet takes a job at the post office, his or her prior military service counts as annual credits toward pension eligibility, but who should be responsible for that portion of the vet’s pension costs, the federal government or the Postal Service?
Breaking Glass Steagall banking to create deregulated, consolidated global Wall Street occurred just so global Wall Street could pedal fraud globally as with that Bush decade of subprime mortgage frauds and lots of other global Wall Street frauds all aimed at these PENSION FUNDS---AND HEALTH BENEFITS----simply recovering that fraud from 2008 economic crash would have all government pensions and benefit FLUSH WITH FUNDS. OBAMA AND CLINTON NEO-LIBERALS JUST DIDN'T SEE FRAUD-----
How the Postal Service began prefunding retiree health care and fell into a deep hole
January 2, 2013
The Government Accountability Office (GAO) has just issued a new report (GAO-13-112) on the Postal Service’s retiree heath care fund. It’s called “Status, Financial Outlook, and Alternative Approaches to Fund Retiree Health Benefits.”
As the title suggests, the report is about the current condition of the Retiree Health Benefits Fund (RHBF), projections about the Postal Service's health care liability in the future, and the potential impacts of the various changes in the law being proposed by the House, Senate, and Administration. What’s missing from the report is a little history.
Like most GAO reports on the Postal Service, this one is filled with dire predictions about the agency’s “ability to continue to fulfill its mission on a self-supporting basis.” (In other words, a government bailout may be on the horizon.) The GAO has issued a host of reports like this. They use a lot of charts and graphs to dramatize how bad the Postal Service’s financial condition is (always “high risk”), and they recommend radical solutions, like downsizing the workforce, cutting services, and closing facilities.
The GAO report projects massive health care costs for future retirees. It argues that any near-term reduction of payments into the RHBF will cause much larger payments in the long term. It says that if the Postal Service is unable to cover its liability, someone else will get stuck with the bill. Future postal customers (ratepayers) will face large rate increases, or the government (taxpayers) will have to step in with subsidies. It’s also possible, says the GAO, that postal workers may come out at the short end: “The level of employee pay and benefits may not be sustainable and could be reduced.”
“Therefore,” the GAO concludes, “we continue to believe it is important that USPS prefund its retiree health benefit liability to the maximum extent that its finances permit.”
The GAO report is addressed to Congressman Darrel Issa. That probably means Issa requested it, and from the look of things, the GAO has given Issa what he wanted — more ammunition with which to argue that the large retiree health care payments are necessary and inevitable. The fact that those payments are driving the Postal Service deeper and deeper into the red gives Issa and his friends more justification for the anti-union and anti-government cutbacks they’ve been advocating.
Fixing one mistake with another
In preparing the report, the GAO shared a draft with the Postal Service and the USPS Office of Inspector General. The comments of Inspector General David Williams are worth noting.
One of Williams' main points is that it’s important to understand the historical context of how the prefunding obligation came about in the first place. The Inspector General writes this in his letter to the GAO:
“The Postal Service started prefunding its retiree health benefits as a result of the discovery that, due to external fund management misjudgments, it was on track to seriously overfund its pension obligations by $78 billion. This discovery was one of several fund management issues identified about the same time. The decision to turn a mistake into a second prefunding obligation created its own problems. A 10-year schedule of prefunding payments was structured toward a 100-percent funding goal. The aggressive payment schedule appears to have been set based on byzantine ‘budget scoring’ considerations rather than actuarial assumptions or an evaluation of the Postal service’s ability to make the payments.”
In other words, the amount of the annual payments to the RHBF — around $5.5 billion — was not based on reasonable estimates of what needed to be put into the fund to cover the liability. The amount was determined by budget scoring.
According to the way scoring works, even though the Postal Service is an independent agency with its own budget, aspects of its operations are included in the unified federal budget, which consolidates all revenues and expenses of the government. Congress therefore estimates the effects of any legislation, proposed or enacted, on the federal budget. The goal is legislation that is budget neutral.
Those considerations, says Williams, determined the size of the annual payments to the RHBF, rather than an actuarial analysis of what they should have been. In response to Williams' comments, the GAO added a bit more background to its report, but not enough to fully understand how the excessive health care mandate came about.
Here’s the rest of the story. It's pretty complicated, so there may be a few errors in what follows, but it's based on several government reports and a few news articles, listed here.
From the “High Risk List” to “a much more positive picture”
In the late 1980s, Congress became concerned that the Postal Service would be unable to meet its pension liabilities, so it passed a series of laws to increase the agency’s payments. In 1989, for example, Congress required the Postal Service to pay for cost-of-living adjustments for its annuitants retroactive to 1986. The following year, Congress again increased the charges to the Postal Service for COLA payments by pushing back the applicable date to 1977. In 1993, Congress required the Postal Service to pay $693 million for past interest which had accrued as a result of the unfunded liability for COLAs and health benefits.
Despite these and other increases in the pension payments, the GAO was concerned about the “rapidly deteriorating financial situation” of the Postal Service and its ability to cover its liabilities. In April 2001, the GAO issued a report (GAO-01-598T) that focused on declining revenues, rising debt, management-labor relations problems, and increased competition (including electronic diversion to the Internet). As a result of these concerns, the GAO put the Postal Service on its “High Risk List.”
In May 2002, Comptroller General David Walker testified to the Senate (GAO-02-694T) that the Postal Service had major liabilities and obligations estimated at close to $100 billion, including liabilities for pensions ($32 billion), workers’ compensation benefits ($6 billion), debt to the Treasury ($11 billion), and post-retirement health benefits ($49 billion). That's the same David Walker who's CEO of the Peter G. Peterson Association and behind efforts to privatize the Postal Service.
At the request of Congress and the GAO, the Office of Personnel Management (OPM)
conducted a review of the Postal Service’s liability to the Civil Service Retirement System (CSRS). Such a study had never been done before, and almost everyone expected the OPM to discover that the liability would be even greater than current estimates were showing.
The actuaries went back into the books, and in November 2002, much to everyone’s surprise, the OPM discovered that “a review of USPS payments to the civil service retirement fund for pension obligations to employees on board before 1984 revealed a much more positive picture than previously believed.”
The OPM determined that rather than facing a huge pension liability, “contribution rates set in current law would ultimately result in an overfunding of the amount needed to cover CSRS benefit obligations attributable to USPS annuitants by $71.0 billion.”
The explanation for this surprising revelation was relatively simple: The pension fund was invested in Treasury bonds that were “earning interest at a higher rate than presumed in the statutory funding formula” (a static 5 percent).
The potential for overfunding was actually even more than $71 billion determined by the OPM. When a November 2003 GAO report (GAO-03-448R) looked at the OPM calculations, it put the potential overfunding at $103 billion.
The main difference between the OPM’s calculations and the GAO’s involved veterans working at the post office. Under then-current law, the Treasury was responsible for retirement benefits based on prior military service of postal employees. The OPM’s calculations had the obligation as belonging to the Postal Service. The GAO said that if the obligation — estimated at almost $27 billion — were considered the Treasury's responsibility and therefore added to the CSRS overfunding, the total overfunding would top $100 billion. (More on the military pension costs in a moment.)
Congress addresses the pension problem: The 2003 Postal Pension Reform Act
In order to remedy the overfunding problem the OPM and GAO had uncovered, Congress needed to pass legislation that would change the way the Postal Service's CSRS retirement liability was calculated and funded.
In reviewing a draft of what would become the Postal Civil Service Retirement System Funding Reform Act of 2003 (Public Law 108-18), sponsored by Senator Susan Collins, the Congressional Budget Office (CBO) did some budget scoring and determined that the proposed bill would improve the financial position of the Postal Service but increase the federal deficit (or reduce a surplus) of the unified federal budget by as much as $41 billion over the 10-year period from FY2003 to FY2013.
In other words, if the Postal Service were to reduce its payments into the CSRS (to avoid overpaying and creating a surplus), the federal budget would take a big hit and “cost” the federal government over $4 billion a year. Congress was having none of that, so it came up with three solutions to the pension problem.
First, it retroactively transferred responsibility for funding the cost of CSRS benefits attributable to the military service of postal employees from the Treasury to the Postal Service. That handed the Postal Service a $27 billion obligation and went a long way toward offsetting the effect of reducing the CSRS payments.
Second, the Postal Service was not allowed to keep the money it was saving in reduced CSRS payments. Instead, for three years it had to use the savings — about $3 billion a year — to pay off a loan to the Treasury; in the fourth year, it had to put the money in escrow.
Third, it required the Postal Service to report to Congress on how it could use the CSRS savings realized after fiscal year 2005. That meant the Postal Service had little hope of eventually being able to keep the $3 billion a year down the road.
Let’s take these aspects of the Postal Pension Reform Act one by one.
Transferring the military obligation
The issue of pensions for veterans has a long, complicated history, but at its heart is a basic question. When a vet takes a job at the post office, his or her prior military service counts as annual credits toward pension eligibility, but who should be responsible for that portion of the vet’s pension costs, the federal government or the Postal Service?
The Postal Service argued that it shouldn’t be responsible for pension costs of vets that accumulated before taking a job at the post office. The Postmaster General pointed out that 90% of the obligation was incurred even before the Postal Service was established as an independent entity in 1971. Plus, the Postal Service gave hiring preference to veterans, so there were a lot of them working at the post office, and it was unfair that the Postal Service should have this obligation on its books.
President Bush’s administration argued, however, that the Postal Service should pay the full cost of its employees’ pensions, including those earned in military service, because the credits have pension value only by virtue of the Postal Service having hired veterans in the first place.
The Bush administration won the debate, and one of the Pension Reform Act’s main changes to the method of funding CSRS was that the responsibility for the veterans’ pension credits was transferred from the Treasury to the Postal Service. That meant the Postal Service incurred a $27 billion obligation, which came to about $1.5 billion a year in payments to the Treasury.
The Pension Reform Act did not, however, put an end to the controversy over who should be responsible for the military credits in the CSRS pension. Many people continued to argue that it was wrong for the Postal Service to get stuck with the obligation, while others maintained that the military credits were the Postal Service’s problem.
For example, the Acting Director of the OPM, Dan Blair, told the Senate in 2005 that he believed the Postal Service should continue to be responsible for the military credits. “Since the Postal Service uses and receives the benefits of this human capital tool in the form of recruitment and retention of its own employees,” said Blair, “it should pay for its full cost. There is no basis for the taxpayers to subsidize any element of the Postal Service's compensation package.” (Blair, by the way, would subsequently go on to become the first Chairman of the Postal Regulatory Commission, the successor agency to the Postal Rate Commission.)
The Heritage Foundation, the right-wing think tank that has longed advocated privatization of the Postal Service, similarly argued that returning the burden of the military pensions to the government would “primarily serve to subsidize mass mailers while making it more difficult to bring federal spending under control.”
Such arguments prevailed in 2003 when the Postal Pension Reform Act was passed, but three years later, Congress would reverse itself and shift the military pension costs back to the Treasury. But that victory for the Postal Service came with a lot of strings attached, as we’ll see shortly.
Putting the reduced CSRS payments in escrow
In order to avoid the $71 billion surplus from accumulating in the CSRS, the OPM proposed legislation to reduce the Postal Service's annual payment from $4.7 billion to $1.8 billion for fiscal 2003 and to make similar adjustments in subsequent years. That meant, in effect, that the Postal Service would “save” almost $3 billion a year by making lower payments to the CSRS fund.
But Congress did not want to allow the Postal Service to keep this $3 billion a year. According to budget scoring, that would end up increasing the federal deficit. So Congress directed the Postal Service to use the first three years of savings (2003-2005) to pay down its debt of nearly $12 billion, owed to the Treasury for borrowing to help cover its deficits. After that, starting in 2006, the $3 billion in annual savings would be put into an escrow account while Congress decided what to do with it.
The 2003 Pension Reform Act thus reduced the Postal Service’s payments to the CSRS, but it also required the Postal Service to give $1.5 billion a year to the Treasury for the military credits and to pay out $3 billion a year (to repay loans and then into the escrow account).
Overall, then, the Act was basically a quid pro quo: The Postal Service got its CSRS pension payments adjusted, but it got stuck with a $27 billion bill for military service benefits, and it had to put the pension savings into escrow. The money was not returned to the Postal Service, which might have been used it to avoid a rate increase, to make capital improvements, or to expand its products and services.
Using the CSRS savings for retiree health care
While Congress was considering the postal pension legislation in 2003, the Postmaster General came up with a suggestion about how to handle the $27 billion in military pension costs. Transferring the obligation back to the government would essentially give the Postal Service the money, which would take money out of the Treasury and add to the federal deficit. So the Postmaster General suggested that the the money could remain in the Treasury and be put into a separate account designated as the “Postal Service Retiree Health Benefit Fund.”
Such a move would return the obligation for vets’ pre-USPS pension obligations back to the government where it belonged, but the Treasury wouldn’t need to hand over billions to the Postal Service. (Most of that those billions, by the way, had been paid out long ago to veterans of World War II and Korea.)
As for CSRS savings, Congress was not very interested in simply letting the Postal Service have the $3 billion a year. In 2004, the CBO estimated that canceling the payments and letting the Postal Service keep the money would cost the unified budget $12.5 billion through FY2009 and $35.7 billion through FY2014.
A House committee chaired by Tom Davis came up with an idea similar to what the Postmaster General had suggested for the military credits. Davis recommended that the Postal Service set up a Retiree Health Benefits Fund, and the money going to the escrow account could be put into this new fund.
What this all boils down to is this: Congress did not want to transfer the $27 billion obligation for veteran pensions to the Treasury, and it did not want to reduce the CSRS payments by $3 billion a year. If had to do these things, something else needed to be done to balance out the costs to the Treasury. The solution was to create a Retiree Health Benefits Fund and to put the money there. That way it stayed in the Treasury, where it would help out with the federal budget.
Congress addresses the pension problem, again: The PAEA of 2006
By 2006, it was time for another round of postal reform, but the pension issues continued to cloud the debate. The Postal Accountability and Enhancement Act (PAEA), sponsored by Davis in the House, and by Collins and Carper in the Senate, did a number of things. It changed the rate system, turned the Postal Rate Commission into the Postal Regulatory Commission, and gave the Commission more power. It also addressed the retirement funds in several ways.
First, the PAEA relieved the Postal Service of responsibility for covering the costs of military experience. It transferred responsibility for costs related to CSRS military service credit from the Postal Service back to the Treasury, both retroactively and prospectively; this included all CSRS military service costs for postal employees since the inception of the Postal Service in 1971. That obligation for the $27 billion in military credits was thus returned to the Treasury, once and for all.
Second, the PAEA established the Postal Service Retirement Health Benefit Fund. The Postal Service thus shifted from a “pay as you go” model and began prefunding the health benefits of current and future postal retirees.
The RHBF was initially funded with $17 billion from the CSRS surplus associated with the shift in military pension obligations, plus the $3 billion that had been put in escrow from the suspension of the annual CSRS payment. The fund was thus quick started with $20 billion diverted from the CSRS.
Third, the PAEA required the Postal Service to make annual payments — ranging from $5.4 billion to $5.8 billion per year — into the RHBF over a ten-year period, from fiscal years 2007 through 2016, and to pay off the rest of its liability (as determined by the OPM in 2017) in the years 2017 to 2056.
Frontloading the payments
As the new GAO report states, “the payments required by PAEA were significantly ‘frontloaded,’ with the fixed payment amounts in the first 10 years exceeding what actuarially determined amounts would have been using a 50-year amortization schedule.”
The GAO report does not fully explain why that happened, though. The payments could have been amortized over a much longer period, like forty or fifty years, which would have led to significantly smaller annual payments. In fact, in 2005, when the OPM’s Dan Blair recommended creating a retiree health care fund, he suggested setting up a forty-year payment schedule.
In 2003 the GAO estimated that the Postal Service had "substantial" obligations associated with retirees' health benefits, somewhere between $40 billion and $50 billion. With $20 billion in the fund from the get-go, a payment schedule of forty or fifty years would thus have required payments on the order of a billion a year.
But the Postal Service was looking at the possibility of “saving” about $4.5 billion a year in reduced payments to the CSRS — $3 billion from reduced CSRS payments and $1.5 billion for not having to pay the military obligation. If only one billion were put into the RHBF, however, the Treasury would end up getting $3.5 billion less each year.
Congress needed a way to ensure that $4.5 billion kept making its way from the Postal Service to the Treasury. That’s essentially why Congress came up with a plan to frontload the fund with an aggressive ten-year schedule of annual payments of about $5.5 billion.
The USPS OIG puts it this way in a 2009 report: “Because the Administration and Congress required the new law [PAEA] to be budget neutral, the Act also required the Postal Service to make 10 payments to the Department of Treasury, approximately equal to the annual amount of the reduced payment from the escrow and military service relief, for the purpose of prefunding the Postal Service’s retiree health care liability.”
Mandating those huge payments wasn’t simply about ensuring that the Postal Service covered its retiree health care liability (a liability that wouldn’t come due for decades), and the size of the payments wasn’t based on actuarial calculations. The payments were all about making sure that the billions the Postal Service was overpaying into its pension fund would continue to help out the bottom line of the unified federal budget.
Pay now or pay later
That’s the history of how the $5.5 billion payments came about. They’ve been an onerous burden from the start, and the Postal Service hasn’t really been able to make any of the payments on its own. It has had either to borrow back from the Treasury or simply default on the payments.
The new GAO report analyzes several proposals about what to do about the problem, as proposed by the House, the Senate, the Administration, the Postal Service, and the OIG. The details are extremely complicated, and making projections about how the different proposals would work out is further complicated by several unknowns, like the rate of inflation for health care costs, future interest rates being earned by the money accumulating in the fund, the size of the workforce, and so on.
The gist of the report, however, is clear. Any significant reduction in the annual payments would jeopardize the Postal Service’s ability to cover its liabilities down the road. If the payments are smaller in the near term, they will be bigger in the long term.
The GAO acknowledges that “some stakeholders have argued that such prefunding is primarily responsible for USPS’s dismal financial condition and is unfair, arguing that no other entity is required to conduct such prefunding.” The GAO, however, dismisses this argument. It cites a 2011 OPM Inspector General report that said postponing prefunding would be “financially risky,” and it says that significantly reducing the payments now will increase the possibility that the Postal Service won't be able to make the larger payments that will come due decades from now.
As the GAO states, “OPM’s Inspector General reported that future USPS customers (ratepayers) will have to pay for expenses that the USPS is incurring today and added that deferring payments will likely hurt the USPS’s ability to compete in the future and affect its ability to improve its financial situation.”
The House, Senate, and Administration proposals
The proposals put forward by the House, Senate, and Obama Administration each requires significantly large payments into the RHBF, but they are calculated in different ways. It's not easy comparing apples and oranges, but the new GAO report does an excellent job explaining the different plans and possible scenarios. Roughly, here's what they come to.
The House bill reduces the 2011 payment from $5.5 billion to $1 billion, but increases the 2015 and 2016 payments from around $5.7 to $8 billion. Overall, for the four-year period 2013 through 2016, the House bill is actually more demanding than the current situation. It would require over $27 billion in payments, as contrasted with $23 billion required by current law.
The Administration bill eliminates the $5.5 billion payment for FY 2011, reduces the 2012 payment to $0.8 billion and the FY 2013 payment to $1.3 billion. But in 2014, the payments return to a level comparable to the one set under PAEA, i.e., about $5.5 billion. For 2013 to 2016, the total payments would come to $18 billion, less than current law’s $23 billion, but still a significant burden.
The Senate bill completely repeals the mandated payments for 2011 through 2016 and replaces them with a 40-year amortized payment schedule. It would also reduce the pre-funding requirement to 80 percent of the projected liability, as opposed to current law and the House bill, which aim for 100 percent. According to the GAO report, the payments would come to about $4.4 billion a year, or about $18 billion for the 2013-2016 period (roughly the same as the Administration’s proposal).
These three proposals thus require significant payments over the next few years and wouldn't do very much to relieve the Postal Service of the burden placed on it by PAEA. Two other proposals take a different approach, the Postal Service’s and the OIG’s.
The USPS proposal
The Postal Service proposes taking over the fund itself. The GAO does not consider this approach in any detail because it is working on a separate report on the topic. The Postal Service was apparently not happy that the GAO went ahead and issued its report without giving sufficient attention to the Postal Service's plan. In response to a draft of the report, the Postal Service said that “releasing this report is inappropriate because, in its view, the solution to managing its health care costs is to reduce the cost of future health care coverage by allowing USPS to sponsor its own medical plan.”
According to the Postal Service, “Having an affordable arrangement, utilizing best practices found in the private sector, will serve Postal Service employees and retirees well.” The phrase "best practices found in the private sector" probably means that the Postal Service would cut benefits for its retirees and bring them down to a level comparable to what's offered by private corporations. The private-sector comparability standard rarely means good things for postal workers.
On the other hand, making the Postal Service responsible for the retiree health care fund might be better than having Congress remain in charge of it. That would depend on many unknowns — like how much power postal workers and their unions had over the funds, how the funds were invested, how secure the funds were from being raided, and so on.
One thing is for sure. There are many investment firms out there that would love to get their hands on the $44 billion in the fund right now. The commissions on handling the investment of that money in the stock market would be huge. That may be why investment banks like Evercore (hired by the Postal Service for "restructuring advice") and Lazard (hired by the NALC) are so interested in the future of the Postal Service.
There's more about the Postal Service's proposal in this 2011 white paper. It's rather vague on the details about how managing the fund itself would save money, so it will be interesting to see what the forthcoming GAO report has to say on the subject.
The USPS OIG proposal
The Inspector General proposes yet another plan, informally called the Seal and Grow Approach. It’s a variation of the “pay as you go” method that was in place before the PAEA created the retiree health care fund. The Postal Service would stop prefunding and instead pay its share of premium payments for retirees and beneficiaries as they become due.
The existing fund would be left to grow with interest, with no other cash inflow or outflow, until the Postal Service’s liability was fully funded. The OIG estimates that the fund would grow from $44 billion (its level as of September 2011) to $90 billion in 21 years (its estimated liability at this time).
The OIG therefore argues that the $5.5 billion payments mandated by PAEA are completely unnecessary. According to a 2009 OIG report, “The Postal Service could pay on average $4.0 billion less each year from FYs 2009 to 2016 to prefund its retiree health benefits and still achieve the same level of funding anticipated under OPM’s assumptions.” In other words, rather than annual payments of $5.5 billion, the Postal Service could be paying about one billion a year for retiree health care.
The OIG also believes that it should not be necessary for the fund to be fully funded, as required by PAEA. The OIG notes that many businesses — if they even have a retiree health care fund — are targeted at much less than 100 percent. For example, the OIG found that 38 percent of Fortune 1000 companies that offer retiree health care benefits prefund them at a median funding level of 37 percent. The Department of Defense prefunds its retiree health benefits and it has a 100 percent target funded percentage, but as of September 30, 2010, it was funded at 38 percent. The OIG therefore says that it would be sufficient if the RHBF were funded at just 30 percent.
Congress to the rescue
While it may make sense for the Postal Service to prefund its retiree health care benefits at some level or another, it’s clear that the current mandate is the main cause of the Postal Service’s financial crisis. Diversion to the Internet, a weak economy, and the reduction in postal services (like slowing down First Class mail) are contributing factors, but they account for a relatively small portion of the deficit. The big problem is the health care mandate. It accounts for over 80 percent of the total deficit that's accumulated since 2006 ($33 billion out of $41 billion). As the OIG says, making prefunding payments at the current levels will simply bankrupt the Postal Service.
The payments — even when they aren’t made — are already having a terrible effect on postal operations. They make the monthly, annual, and cumulative losses look many times worse than they actually are. The staggering losses are cited constantly by Postal Service management to justify reductions in service, like cutting hours at 13,000 post offices under POStPlan, and they are demoralizing the workforce. The losses are the regular stuff of headlines, and it's no wonder that many people think the Postal Service is a defunct dinosaur heading off a fiscal cliff. That can’t be good for business.
Congress created this problem in 2006 when it tried to correct the earlier mistake of overfunding the CSRS. But mandating that the Postal Service frontload the retiree health benefit fund with an aggressive payment schedule was an even bigger mistake, and it has turned out to be a disaster.
It’s now up to Congress to fix its mistake. If past history is any indication, however, there’s little reason to be optimistic. Congress will probably do what it does best: fix one problem by creating several new ones.
I like this headline because WE THE PEOPLE and especially Democratic voters must remember CLINTON/OBAMA 1% GLOBAL WALL STREET NEO-LIBERALS are far-right wing economics-----so it is the right wing killing our USPS--privatizing all that is public because we do not fight reoccurring ELECTION FRAUD.
The Right Wing’s Assault on the Post Office – Smashing the Myth That It’s in Financial Trouble
Posted on October 6, 2015 by Yves Smith
The cuts to POST OFFICE operating funds used to pre-pay these hundreds of billions of dollars these few decades were used as an excuse to OUTSOURCE ALL MONEY-MAKING OPERATIONS the Post Office has-----so we saw PITNEY BOWES-----and postal machines that once were postal income now a private corporation. Then we saw private trucking corporations being brought in to AUGMENT postal long haul etc-----then when USPS designed a competitive package rate policies allowed a UPS and FED-X to DUMP THEIR PACKAGES AT POST OFFICE DROP SITES-----having the post office deliver packages those private corporations charged their customers MORE =====while getting that discounted price. The USPS lost billions of dollars in revenue from this DUMPING and consumers probably did not even know they were paying higher prices shipping with UPS/FED-X for packages handled by Post Office. These kinds of policies killed what would have been FREE MARKET COMPETITION-----THE POST OFFICE WAS LITERALLY BEING KILLED BECAUSE IT WAS NOT BEING ALLOWED TO COMPETE IN A FREE MARKET.
The myth our national media created was the never-ending mantra of SNAIL MAIL IS DEAD. Yes, US citizens do use email and less frequently mailed letters so postage had dropped over these few decades. The USPS had properties paid for -----it had infrastructure in sound working order and it did not need the volumes other carriers needed as they expanded nationally AND OVERSEAS. The bulk of expenses for a UPS or FED X was its overseas global corporation and yet we were told that the POST OFFICE was unfairly subsidized because its infrastructure was already paid from centuries of being in business. USPS was able to compete for package delivery by corporations and retail until its main money-making operations were OUTSOURCED.
The decision by an appointed Post Master General under CLINTON/BUSH to create satellites as in off-site private mailing stores ------created unnecessary expense and gave momentum in closing post office branches-----people stopped coming to post office to mail----to buy stamps because all that was OUTSOURCED. Of course now all those private mailing stores are going out of business after deregulating where people go to mail a post office package. All of these decisions ended costing the POST OFFICE more in operations while the public is being told these policies make things more EFFICIENT......
How the Postal Service Is Being Gutted
The plan to wreck the post office.
Mar 4, 2013 at 5:14PM
The United States Postal Service just announced that it is cutting Saturday delivery in August, moving to a five-day schedule as part of a multiyear effort to reduce costs and remain viable.
That's not the only change coming down in 2013. The USPS will close half of its processing centers, shutter more than 3,000 local branches, and eliminate about one-third of its workforce -- nearly 220,000 employees. It won't surprise you to learn that these moves will slow the delivery of first-class mail (i.e., letters) by one to three days, making citizens less reliant on the postal service and hastening its demise.
Why would the USPS take such radical measures? The simple truth is that the postal service is a fundamentally sound business, though not without its challenges. If you look closely, you'll see a concerted campaign to drive USPS out of business, despite the fact that it operates without government subsidies and, potentially, at a profit. It's being subjected to a politically manufactured crisis in order to ram through drastic change. But without the USPS, citizens will face much higher costs without better service. Below, I outline three common misconceptions about the USPS and explain why they're misleading.
Myth 1: The USPS' losses show that it's not a viable business
In the last decade or so, the USPS has been dogged by two significant changes. The most obvious is the advent of email, which has hurt postal volumes, especially first-class mail. That's a secular change that's not going away, and all the better for the many benefits it provides (spam notwithstanding).
The other change is political and imposes un-needed stress. In 2006, Congress passed the Postal Accountability and Enhancement Act, forcing USPS to pre-fund the present value of 75 years of its pension and health-benefit fund in 10 years -- about $5.5 billion annually for a business mandated to break even.
Listen only to the recent headlines and you might think the USPS is about to drop off the face of the earth. After all, officially it spurted red to the tune of $15.9 billion in 2012. Look closer.
Exactly $11.1 billion of that loss was due to the pre-funding mandate and half of that ($5.5 billion) was deferred from 2011 when the USPS defaulted on its payment in order to fund operations. Below are the official numbers and my adjusted figures accounting for Congress's mandate.
Adj. operating expenses*
Adj. net loss
Source: USPS. *Subtracts $11.1 billion for 2012 due to delayed funding of 2011's mandate, $0 for 2011, and $5.5 billion for 2010.
The net losses look daunting. But adjust them for pre-funding to see the actual operating situation instead of the deeply red figures hyped by most media outlets.
That 75-year pre-funding mandate adds substantially to the post office's losses. This is a requirement that no other government agency, let alone a private company, must face. In short, the USPS is paying for people who aren't even employees yet -- in fact, may not even be born yet!
And the USPS has been a model for prudent squirreling. As of Feb. 2012, it had more than $326 billion in assets in its retirement fund, good for covering 91% of future pension and health-care liabilities. In fact, on its pensions, the USPS is more than 100% funded, compared to 42% at the government and 80% at the average Fortune 1000 company. In health-care pre-funding, the USPS stands at 49%, which sounds not so good until you understand that the government doesn't pre-fund at all and that just 38% of Fortune 1000 companies do, at just a median 37% rate. The USPS does better than almost everyone.
Pre-funding is a burden that other government-linked firms don't have to face, notably defense companies. Lockheed Martin's (NYSE: LMT) pension was underfunded by $13.3 billion as of Aug. 2012 -- nearly half of its market cap. Raytheon's (NYSE: RTN) was underfunded by $6 billion, more than one-third of its market cap, and Boeing's (NYSE: BA) by $16.6 billion, almost 30%. They have the luxury of profitability and time to fund their obligations. Another advantage: They can invest in a wide range of securities, while the USPS is forced to invest in only government bonds. Yeah, those bonds that, in some cases, pay less than 1% interest. So USPS has to save a lot more money now for the same payout later.
The cuts USPS is being forced to make are like eating dog food when you have a million bucks in the bank. The pre-funding mandate is completely ridiculous for a business that is mandated to break even. Where is the surplus cash going to come from, since it’s not from profits? In addition, this mandate forces USPS to cut investments in technology that would increase productivity and competitiveness, making USPS viable longer term. Even Congress is not so dense as not to see that its law creates a crushing burden.
Myth 2. Everyone knows that snail mail is dead, so USPS can't survive
Now, none of this denies that the USPS faces legitimate business challenges. Revenue declined 3% from 2010 to last year, though USPS did hold the line on overall costs. While mail volume has declined with the rise of email, it's still way more than 20 years a go, and certain segments, such as parcels, are actually growing. That fits with anecdotal evidence: Amazon.com and eBay, to name just two, are dead without efficient parcel delivery, but I now receive my bank statements via email.
One potential solution is to raise revenue. Currently, almost all revenue comes from the sale of postage. Why isn't the USPS raising postal rates? Consumers already receive a fabulous deal: Send a letter anywhere in the U.S. for a mere 46 cents. Compare that to European rates near $1 to deliver on the Continent. A back-of-the-envelope (ha!) calculation suggests that to break even USPS would have to raise rates 7% -- not quite 50 cents to send that letter to Hawaii in a few days. Hardly drastic.
Now, admittedly just raising postage is an overly simplistic solution, but it gets to a basic truth: lack of sales. Rates are overseen by the Postal Regulatory Commission (PRC), and prices must not rise faster than inflation. A postage stamp has increased just 12% in six years. That's another way that the USPS's mandate to operate like a business is stymied by overseers. Another major type of mail, bulk rate (ads), receives big discounts in exchange for pre-sorting mail, and could withstand higher postage, since they receive much more value than what USPS saves from pre-sorting. Fix: Allow USPS to price correctly.
Proper pricing is important for a business mandated to deliver everywhere for a fixed price, a burden not faced by private services. Of necessity, many locations, such as rural ones, lose money -- part of the price of a national postal service. Private services can simply leave a location if it's not profitable. In fact, private services rely on USPS to deliver to unprofitable locations for them.
Anything short of a massive rate hike would still give USPS cheaper service than FedEx (NYSE: FDX) and UPS (NYSE: UPS). Finding a postage price on their websites is byzantine and opaque. Try it if you've got a half-hour. And if traditional mail is dead, why are FedEx and UPS continuing to do so well?
The short answer is that they can price postage to be profitable (partially why their sites are so complex) and invest in growth areas -- both of which USPS can't do. Whenever USPS tries to enter a new arena, private competitors bleat to Congress. Examples abound: plans to develop an online payment system in 2000 (Internet industry cried foul); public copy machines (office supply stores); in-store sales of phone cards and money transfers; selling postal meter cartridges (Pitney Bowes objected). And, of course, rivals such as UPS complained, ultimately leading Congress in 2006 to restrict USPS to mail delivery.
The effects are huge -- costing USPS billions. And new services, it's estimated, could increase sales by nearly $10 billion annually, potentially covering the earnings gap. But Congress would have to agree to those changes after already tolling the USPS bell. In its latest annual report, USPS begs Congress, in the most obsequious bureaucratese possible, to let it raise revenue. The odds look slim.
Myth 3. Privatized mail delivery would be cheaper and more effective
This myth is often advanced by those who advocate privatizing the postal service, often invoking unions that are strangling the company or an inefficient bureaucracy. But USPS has continued to compete well as a business despite being run ragged by a Congress backed by big money.
USPS has invested heavily in modern systems to speed distribution, and, in fact, has partnerships with FedEx and UPS for "last mile" delivery. In particular, FedEx relies heavily on USPS, which delivered more than 30% of FedEx Ground shipments in 2011. To reframe this, the USPS provides service that is cheaper than what UPS and FedEx can provide for many locations. That's an implicit subsidy.
It's bad enough that USPS is forbidden from entering new markets. When it does well on its home turf, rivals turn to Congress, silencing USPS when it delivers better rates. As economist Dean Baker explains, "About a decade ago, the Postal Service had an extremely effective ad campaign highlighting the fact that its express mail service was just a fraction of the price charged for overnight delivery by UPS and FedEx. [They] went to court to try to stop the ad campaign. When the court told them to get lost, they went to Congress. Their friends in Congress then leaned on the Postal Service and got it to end the ads."
And when USPS tried to take advantage of web shopping? As Elaine Kamarck at Harvard's Kennedy School of Government explains. "But parcel shipments were generated by large organizations and the USPS was not allowed to negotiate discounts and thus lost business. It was forbidden by law from lowering prices to get more business. This resulted in the entirely incredible situation in the 1990s where the United States government negotiated an agreement for the delivery of U.S. government package services with Fed Ex because the USPS was not allowed to negotiate for lower prices!"
So, if USPS is just government bloat, as some ideologues would have it, then why would efficient free market players such as UPS and FedEx resort to the government? Shouldn't they simply compete USPS out of that express business?
This paradox reveals in stark detail the industry's game plan. Compete effectively where possible and then use political power to grab market share from USPS, with the ultimate goal of privatizing the postal system, or at least its profitable parts. This goal is emblematized by the Cato Institute, a Washington think tank founded by Charles Koch advocating the privatization of public services such as the post office. Frederick W. Smith, founder and CEO of FedEx, was on Cato's board, and FedEx funds Cato.
The results of this game plan are well-documented and disastrous for citizens. Want to know what will go down if the postal service is privatized? (Not postage!) Take a look at the 2008 Chicago parking meter fiasco, where the city leased its meters for 75 years to an investor group. The city gave the concession while estimating lifetime revenue at just half what investors expected. Now 2013 marks the fifth year in a row that meter prices have gone up, and Chicago boasts the highest prices in the U.S. The final middle finger: Whenever the city closes streets (as for a parade), it has to pay investors the lost meter revenue.
Expect the same for postage rates and with reduced service.
So I envision two basic ways to privatize the postal service:
- Full privatization -- a private company swallows the whole enchilada and operates delivery under some kind of regulatory oversight.
- Partial privatization -- a private company takes over the core infrastructure (a high-value, high-throughput distribution component), leaving less profitable and money-losing components such as labor-intensive physical delivery. This strategy is probably ideal since it privatizes the most profitable parts and sticks less desirable or money-losing bits to citizens.
Now whichever strategy is chosen, there are two hidden plums in all this. First, USPS has the largest union in the U.S. For an investor, part of the return on this deal would come from busting the union, lowering wages, and shifting that profit into investors' hands, something Cato already supports highly.
Second, and perhaps sweeter, that well-funded USPS retirement account might be opened for raiding. An acquirer could invest in higher-return securities and adjust their return assumptions (not even unfairly), freeing tens of billions that could then be returned to investors. For context, FedEx and UPS have a combined market cap of $110 billion against nearly $330 billion in USPS retirement assets.
Foolish bottom line
If capitalism is about delivering the best goods and services at the cheapest prices -- and not about plutocrats wringing profits from the rest of us -- then why is the USPS being forced to slowly kill itself?
The privatization of public assets is something we've seen over and over and it rarely, if ever, works for the public. The example of Chicago parking meters is just repeated time and again. With a strong profit motive, private companies are highly incentivized to cut service to the bone and raise revenues as fast as possible. That's not in the interest of good public service, where the origins of the post office are.
Congress created the post office as a cabinet-level office in 1792 under specific Constitutional authority. In the past, its expansion into other services was seen as desirable, for instance in banking, when Congress formed the Postal Savings System. From 1911 to 1967, citizens deposited money at the post office and received interest. In 1970, the post office became the quasi-independent U.S. Postal Service. This move was significant, since USPS became a legal monopoly and forced it to operate without subsidies (good!), which were 25% of the 1971 budget. It also allowed the USPS to act more business-like, to borrow and invest.
But now especially, Congress, backed by big money sponsors, refuses to let the USPS act as a business. There's no reason, apart from political will, that reasonable changes -- yes, including modest price increases -- couldn't sustain a public postal system even with its significant challenges.
So the next time you hear about the postal service losing billions of dollars or being unable to compete, remember that it doesn't have to be this way.
In a move that mirrors what global Wall Street pols are doing to our public K-12 schools-----our public buildings which of course are often located on prime US city real estate are being sold while being moved or closed completely to strip mall or street locations looking just like any private storefront----which of course is no coincidence.....they want it to become a private store. We are seeing across the nation where Congressional and state pols are using insider influence to be that developer ------or business that owns what is a historical and well-built POST OFFICE BUILDING worth millions traded off for pennies on the dollar. All our Post Office infrastructure being sold ------because we are told it cannot make its budget while all outside accountability groups are proving our USPS has no OPERATIONAL SHORTFALL.
All of this is an ATTACK on our public assets and it has been done by CLINTON/BUSH/OBAMA----not Trump-----far-right global Wall Street neo-liberals are driving this more than Republicans.
Two historic post offices in Connecticut get gutted
November 6, 2013
When the Postal Service sold two historic post offices in Connecticut, there was probably a general sense that they would be protected by preservation laws. But over the past few weeks, the post offices in Fairfield and Greenwich have been totally gutted, and a good portion of the Fairfield exterior has been destroyed as well. About all that will remain of these two structures is the shell.
Maybe there wasn’t much worth preserving inside these buildings, but it still comes as a shock to see pictures like those in the slideshow. Apparently all that matters of history is the facade.
Gutted in Greenwich
The post office in Greenwich was built in 1917, and it served the community for 95 years. In May 2012, the building was sold for $15 million to Peter Malkin, a Greenwich resident who also happens to own the Empire State Building. Mr. Malkin is a trustee emeritus of the National Trust for Historic Preservation, and he apparently has a reputation for saving historic buildings.
When Malkin emerged as the buyer of the Greenwich post office back in May 2011, local officials said they were told the property would be rented by the high-end retailer Bergdorf Goodman. That deal fell through or it was a false rumor to begin with. The new tenant will be Restoration Hardware, a luxury brand in home furnishings.
Restoration Hardware describes itself as “a curator of the finest historical design the world has to offer,” so it is rather ironic that the “restoration” of the Greenwich post office has required a total gutting of the structure’s interior.
While the old Greenwich post office gets repurposed as a high-end retailer, the new post office in town is housed in a building that used to be a pet food store, for which the Postal Service pays over $21,000 a month in rent. As Evan Kalish observed on his website Going Postal, the two buildings make quite a contrast.
The historic Greenwich post office is on the National Register of Historic Places, so one might think that it would be protected, inside and out. But landmark status has turned out to mean a few more hurdles to overcome before the demolition could begin.
In September 2011, a news report said that any changes to the building would need to be approved by the state of Connecticut. According to documents filed with the Greenwich Town Clerk's office, "No construction, alteration or rehabilitation shall be undertaken or permitted to be undertaken that would affect the historic features … without consultation with and the express permission of the Connecticut Historic Preservation and Museum Division."
Well, all that consultation took place and the plans were approved — by the town’s Planning and Zoning Commission, by the Historic District Commission, by the Architectural Review Committee, and probably by other government agencies as well. It sounds like the approval was quite enthusiastic.
According to the Greenwich Time, Donald Heller, chairman of the Planning and Zoning Commission, “lavished praise” on the planned transformation of the landmark. "I felt very good about it," Heller said after seeing a presentation of the plans. "It's just a magnificent job. Isn't it gorgeous?"
Katie Brown of the Greenwich Historic District Commission also praised the architects for their commitment to preservation. "I think you've done a remarkable job," Brown said when she saw the plans. "It looks to me that they've made every effort to respect the building so it could be used in a modern way as a retail store."
In addition to approving the site plan, the Commission voted to give the building a historic designation, but it turns out that this designation didn't add protections to the building. As a representative of Malkin's company explained, the designation allows the Planning and Zoning Commission to disregard a requirement that the building have designated parking.
The new retail space will feature a deck with a sunken roof on the building's second floor. A 1936 addition to the building will be enlarged to create a landscaped courtyard displaying outdoor furniture.
There aren't many photos of the interior before demolition on the Internet, perhaps because the Postal Service makes it difficult to take photographs of its properties, but the application for the National Register says this:
“The lobby is high, spacious, follows the curve of the front loggia and features brown and white terrazzo floors with red and white marble borders and black marble baseboards. Walls are white painted plaster and wood trim with classical moulding and ornamentation.”
The interior contained a mural depicting the founding of Greenwich, by artist Victoria Hutson Hutley of West Cornwall, done in 1939. It's being moved to the Havemeyer Building, which houses the Board of Education. Another mural was removed years ago and has apparently been lost.
Times change, and we change with them
The downtown Fairfield post office, 1262 Post Road, was built in 1936 under the New Deal. It sold last year for $4.3 million to a local investment group named Redgate Partners. That was about a half million dollars less than the $4.89 it was appraised at. (For more on other post offices sold for than less-than-market-value, see Peter Byrne’s article in in the East Bay Express and the full version of his report on Amazon.)
While the old post office gets repurposed, a new postal facility was opened in Fairfield just a few feet away, in a small retail space wedged between a photo shop and a children's bookstore. Evan Kalish's photographs again provide a telling contrast.
When the sale was announced back in May 2012, the new owners made it seem like they planned to preserve the property. In the CBRE press release announcing the sale, Russel S. Bernard, Managing Principal of Westport Capital Partners, is quoted saying, "This is a unique opportunity to acquire an iconic building in a community that values a downtown, pedestrian retail experience. We look forward to maintaining this as a premier property and shopping destination."
The developers’ proposal said they planned to “preserve the front façade and some interior portions of the building and remove the remaining structure and construct a new one-story retail building.” Overall, the 11,130-square-foot building will be reconstructed into a 17,000-square-foot structure.
According to an item about the sale in the Fairfield Citizen, “The sales transaction also requires that all original woodwork in the building's public lobby area be preserved and that the Connecticut State Historic Preservation Office will have an opportunity to review architectural plans for any demolition or alterations to the building's wings that were added after the original construction. The original core of the building must remain.”
Judging by the photos, the wings are going and not much of the interior has been preserved. Only the front façade of the central part of the building remains. Most of the post office has been demolished — that’s the word used by the Fairfield Citizen.
As in Greenwich, the demolition doesn’t seem to have encountered much opposition among town officials. The Fairfield Economic Development Commission reviewed the proposal and approved it, and the panel’s chairman told the local news that it was “an interesting and nice plan.”
The post office — or what’s left of it — will be turned into a restaurant called Plan B Burger Bar, which advertises “humane beef” and a selection of “all natural boutique bourbons.”
There was a mural in the post office, painted in 1938 by New York artist Alice Flint. It has since been moved from the lobby of the post office to a second-floor conference room in the town hall. The mural depicts a couple on horseback in a procession symbolizing the passage of time. It’s entitled "Tempora Mutantur et Nos Mutamur in Illis," a Latin motto meaning “Times change, and we change with them.”
This is what happened under an Obama and Donahue as Post Master General-----our Congressional pols were part of this---they had a say as to which mail-processing centers closed or stayed open ----and it was these closures that made it impossible for the USPS to COMPETE in deliveries with UPS and FED-X----global Wall Street pols did this just so our USPS could not compete and they would then find this service unable to support itself. Trump didn't do this----Obama and Clinton neo-liberals in Congress did this all while PRETENDING our USPS was not able to support itself. Lying, cheating, and stealing our government assets.
So, here in Maryland I used to mail a letter to friends a few hours away in rural Maryland and it was delivered the next day----now with mail-processing centers closed and rerouted it takes three days to make this same trip. Now, if you are a corporation or retail store choosing between a UPS, FED-X, and USPS----and USPS no longer can make that one day delivery of course our USPS loses business and cannot compete. THIS IS DELIBERATE PUBLIC POLICY TO KILL THE USPS----
Each time the APPOINTED WALL STREET PLAYER POST MASTER GENERAL MAKES WHAT WILL KILL OUR USPS---HE/SHE ALWAYS SAYS ITS BECAUSE OF PENSIONS AND BENEFITS WHICH IS A LIE
'Last week, the postal service relaxed standards that will slow delivery for 14 billion pieces of first-class mail from overnight to two-day service'.
Global Wall Street pols know this will kill any ability of our USPS to compete with UPS and FED X-----
January 14, 2015 4:33 PM
Lexington mail-processing center likely to begin closing in June, postal officials say
The mail-processing center on Nandino Boulevard will begin closing in June, according to a U.S. Postal Service schedule. The first phase of closing is scheduled to begin June 1, when the process for outgoing mail will be moved out of Lexington. Outgoing mail is all mail that is collected in the area that can go anywhere in the country.
Mail processing clerk Sandy Dove, who is a 17-year employee of U.S. Postal Service, sorted mail at the Lexington processing and distribution center in July 2014. Her husband also worked for the postal service.
By Greg Kocher - email@example.com
The mail-processing center on Nandino Boulevard in Lexington will begin closing in June, according to a U.S. Postal Service schedule.
The Lexington center is among 82 nationwide that the postal service plans to shutter in a new round of plant closings and consolidations. Mail-sorting operations now performed in Lexington are scheduled to move to Louisville. Some of those sorting operations were moved to Knoxville more than a year ago.
The first phase of closing is scheduled to begin June 1, when the process for outgoing mail will be moved out of Lexington. Outgoing mail is all mail that is collected in the area that can go anywhere in the country.
The Nandino center handles all outgoing mail for ZIP codes starting with 403, 404, 405 and 406. It includes Danville, Harrodsburg, Georgetown, Winchester, Mount Sterling, Paris, Richmond and Nicholasville.
About July 1, the process for "destinating mail" will be moved out of Lexington. Destinating mail comes into the Lexington processing center for delivery in Lexington and surrounding areas.
Postal service spokesman David Walton emphasized via email that the June 1 and July 1 dates could change.
About 290 Lexington employees will be affected by closing the Nandino processing and distribution center. The bulk of the employees there are members of the American Postal Workers Union Central Kentucky Local 2307, which represents 176 clerks, 16 truck drivers and 64 maintenance employees, said Austin Speed, floor steward for the union.
"We've started to resign ourselves to our fate," said Speed, a Georgetown resident who is a mail-processing clerk and who has worked at Nandino for seven years. "This is going to happen unless something happens in Congress," which he acknowledged was unlikely.
In a letter released last month, 30 U.S. senators urged Postmaster General Patrick Donahoe to delay the start of any closings until the effect of the consolidations has been studied. Donahoe is scheduled to retire Feb. 1.
The senators cited a post office inspector general's report that found the postal service had failed to fulfill regulatory and statutory obligations to study the effect of the consolidations on service standards and to inform the public of the effect.
The postal service disputed the inspector general's report by saying it had met its transparency requirements.
Kentucky Sens. Mitch McConnell and Rand Paul were not among those who signed the letter. Walton said the postal service was working on a response to the letter.
As with past consolidations, "we have been able to place impacted employees in other positions without resorting to layoffs," Walton said. "Every effort will be made to reassign impacted employees when implementing this next phase of consolidations."
Speed said the postal service would try not to lay people off. "But the conditions under which you stay on with the postal service can be less than ideal," he said.
For example, Lexington employees will be given the opportunity to go into jobs within a 50-mile radius of Lexington.
"If you can't find a job within that area, you become unassigned," Speed said. "That means you continue on at Lexington, you clock in, you get on a bus to Louisville and do six hours of work and then come home. Or you may be converted into another craft. You may go from being a clerk to a letter carrier or a maintenance worker."
Walton was uncertain what will happen to the building on Nandino Boulevard when mail processing goes elsewhere. A full-service post office will remain there, at least initially.
"We could sell the entire building and lease space back from the new owners, or we could sell the building and relocate the post office to another nearby site," Walton wrote in an email message. "Nothing is off the table at this point."
The Nandino processing and distribution center opened in 1973. Closing it would save $8.7 million, including transportation and maintenance costs, the first year, Walton said last year.
Consolidating the processing at the 82 centers is expected to save about $750 million a year, or $3.7 billion over five years, the postal service has said. The 141 consolidations that have been completed saved about $865 million a year.
The postal service, which receives no taxpayer funding for operating costs, has recorded $26 billion in losses over the past three years and says it faces pressure from declining volumes of first-class mail, rising operating costs, and wage and benefit inflation.
Last week, the postal service relaxed standards that will slow delivery for 14 billion pieces of first-class mail from overnight to two-day service.
The postal service says the relaxed standards will help close a gap between revenue and expenses, including a congressionally mandated requirement to pre-pay billions of dollars in retiree health care costs.
This was the straw that would break the back of our USPS and its ability to provide any semblance of quality service and it was Obama and his GLOBAL WALL STREET PLAYER APPOINTMENT DONAHUE who came up with this RIDICULOUS notion of simply making our USPS a kiosk in existing global corporation stores. They chose STAPLES no doubt because it was going out of business and needed more foot-traffic----foget what is good for our USPS-----
So, this PILOT PROGRAM-----which like any US city development plan is already pre-planned to MOVE FORWARD and is not a real pilot----is the door closing on our POST OFFICES-----it is being totally outsourced to global corporations while actual buildings keep being closed. They deregulate more and more ------now instead of postal employees----STAPLES employees can handle these kiosks. We have private mailing stores handing our USPS----now private STAPLES employees------and VOILA---WE NO LONGER HAVE A CONTAINED GOVERNMENT MAILING SYSTEM----it has been dismantled into a network that no one can assure is protected or can have quality service and that will kill our USPS.
Trump did not do this---Obama and Clinton neo-liberals in Congress did this and they did it to kill our USPS>
The goal for global Wall Street is to end letter carriers that are not private and EXPENSIVE. Paying a private bicycle delivery person to carry a piece of mail across town-----paying a train carrier to transport a letter across the country as had to be done BEFORE OUR WORLD-CLASS FEDERAL POSTAL SYSTEM was too expensive to 99% of Americans-----it allowed only those most wealthy to communicate especially in business.
UPS AND FEDX does not want the USPS LETTER BUSINESS AS THERE IS NO PROFIT TO IT---THEY SIMPLY WANT THAT PACKAGE DELIVERY BUSINESS AND THAT IS FOR WHOM GLOBAL WALL STREET POLS ARE WORKING.
As someone who came out to protest with these post office employees---I do not understand how US citizens can simply watch all these vital services be dismantled, deregulated and privatized away. Are people really thinking they will continue to access online communications?
USPS’s controversial deal with Staples headed to showdown over legality
By Lisa Rein July 8, 2015
Peter Menge, along with national leaders and local members of the American Postal Workers Union (APWU), make their way from Farragut Square to a Staples store in Northwest Washington to protest the USPS-Staples deal. (Marlon Correa/The Washington Post)The U.S. Postal Service’s outsourcing of stamp sales and other retail services traditionally offered by post offices to Staples has been a simmering wound with postal unions, with nationwide protests and calls for a boycott of the office-supply retailer.
[Postal Service partnering with Staples in another move with national retailers]
Now, one of the biggest labor battles in recent years is headed to Washington, where the National Labor Relations Board will rule in August on whether the Staples deal violates the Postal Service’s collective bargaining agreement with the American Postal Workers Union.
USPS launched a pilot program with Staples in 2013 to offer counter services in 82 stores. After the pilot ended last year, Staples became an approved shipper for the Postal Service. With both programs, Staples employees staff counters inside stores and offer a range of post office services. The shipping program is now operating in about 1,000 stores.
The cash-strapped Postal Service said the arrangement would help save on labor costs, the biggest expense on its balance sheet. But the deal was met with angry protests from the APWU, which represents about 200,000 employees, about half the postal workforce.
[Unions plan nationwide protests against Postal Service’s Staples deal]
The union said the Postal Service violated its collective bargaining agreement by illegally subcontracting work to Staples without bargaining first with the union. APWU called last year for a boycott of Staples stores and the company’s Quill.com Web site.
The average wage of a post office employee is $25 an hour. A sales associate at Staples makes about $8.50 an hour.
The union filed charges last fall with one of the NLRB’s regional offices, in Baltimore. The regional director ruled against the Postal Service in late June, finding that the union’s claims had merit and violated the National Labor Relations Act, according to the board. The Baltimore region director filed a complaint against USPS and ordered a hearing in August.
Local Politics Alerts
Breaking news about local government in D.C., Md., Va.
“This ruling represents an important step forward in the battle against the privatization of our nation’s public Postal Service,” APWU President Mark Dimondstein said in a statement.
“Every person who organized their friends and neighbors to boycott Staples and warned them about the dangers of allowing a private company to take over the mail helped us get to this point.”
[Postal unions, advocacy groups join forces to ‘save’ USPS]
Postal Service spokeswoman Darlene Casey said the agency could not comment since the issue is the subject of litigation.
USPS is required to file a response to the complaint by next week. An administrative law judge from the labor board is scheduled to hear the case at 10 a.m. Aug. 17 in Washington.
Here in Baltimore our USPS employees are demoralized-----so many of what was strong USPS jobs have been outsourced to as usual job classifications paying poverty wages. The number of employees in each post office is so small ------the public gets annoyed at waits---employees have no opportunity for breaks----I get classified mail with ONE DELIVERY WITH A NOTE TO PICK UP MYSELF---all of these policies are short-cuts taken for no reason-----and make people hate to use the service---as with our public transit---as with defunded and dismantling of public schools so people don't want to use it. THAT IS WHAT HAPPENED ESPECIALLY DURING OBAMA-----
So, the damage was done by POST MASTER DONAHUE-----our USPS cannot function with those changes these several years and Obama knows this. Obama knows as well with this coming economic crash those POST OFFICE pensions and health benefits will not be there and that would be as early as 2017-----HE IS DOING NOTHING TO SAVE THE USPS---and whether a stamp rate increases or decreases has nothing to do with SAVING THE POST OFFICE.
Every US citizen is hurt by these attacks on what is the only communication outlet that would be affordable to all-----but low-income and working class will be hit earliest with no ability to communicate----
Every US citizen is hurt by these attacks on what is the only communication outlet that would be affordable to all-----but low-income and working class will be hit earliest with no ability to communicate----a primary concern for far-right authoritarian dictatorships----yes, Trump will continue CLINTON BUSH OBAMA------JUST AS HILLARY WOULD HAVE.
As New Postal Leader Takes Charge, Obama Calls for Major USPS Reforms
- By Eric Katz
- February 3, 2015
President Obama renewed his longstanding call to overhaul the U.S. Postal Service in his fiscal 2016 budget, saying the agency must be reformed to ensure its future viability.
Just one day after the Postal Service swore in its new postmaster general -- Megan Brennan -- Obama called for sweeping changes to modernize the cash-strapped agency, which the White House said would save a total of $36 billion over 11 years. Obama’s recommendations borrowed from recent legislative proposals that have failed to make their way through Congress, pulling no punches on the most controversial elements of postal reform.
Obama proposed the Postal Service cut Saturday mail delivery after volume declines to a level the White House expects USPS to hit in late 2018, a structure similar to the one put forward last Congress by Sen. Tom Carper, D-Del., and former Sen. Tom Coburn, R-Okla. The president’s plan would also allow USPS to phase out to-the-door delivery in favor of centralized or curbside delivery, while codifying the current policy of not closing rural post offices.
The White House pitched increasing revenue by providing postal management with more flexibility in creating new business opportunities, as well as boosting cooperation with state and local governments to offer services at post offices. Additionally, the budget plan called for making permanent the emergency price increase set to expire this year.
Obama also proposed restructuring the Postal Service’s requirement to prefund the health care of retirees. His plan would defer the fixed payments due in 2015 and 2016. Those payments would then be restructured into a 40-year amortization schedule starting in 2017. The proposal would provide more than $13 billion in relief to USPS through 2016.
Postal Service officials and some lawmakers have sought a much more aggressive approach to addressing the retiree health care issue, calling for a requirement that eligible retirees use Medicare as their primary health care provider.
The White House changed the language on modifying the delivery schedule, after calling for an immediate transition to five-day delivery in its fiscal 2015 blueprint. That proposal, the phasing out of door delivery “where appropriate” and making permanent the controversial “exigent” rate increase have proved major sticking points in Congress. Former House Oversight and Government Reform Committee Chairman Rep. Darrell Issa, R-Calif., attempted to mimic Obama’s fiscal 2015 proposal in legislation last year. The measure cleared Issa’s panel along party lines but never received a full vote on the House floor.
The proposed 2016 budget would return to USPS any surplus payments it has made to the Office of Personnel Management for USPS’ share of the Federal Employees Retirement System. The Postal Service has complained that the lack of a USPS-specific calculation for those costs has led to significant overpayment, which the White House estimated at $1.5 billion. The White House called on OPM to create a new postal formula for the payments moving forward.
The Obama administration has included similar postal reform measures in previous budgets, though the president tweaked his 2016 plan to mirror some of the developments in Congress.
Also on Monday, newly sworn in Postmaster General Brennan sent a letter to employees, praising their dedication and promising a future “filled with opportunity.”
“We have a lot of momentum as an organization today,” Brennan wrote, “despite our financial challenges. We continue to take prudent steps to bring our costs and revenues into better alignment. However, the way we are structured today and the way we serve the public today will not be adequate to fully meet the demands of tomorrow's marketplace.”
Cuts will be among the necessary changes, she said. Or, put another way, will help create “the most efficient and productive network to support our growth in products.” Reforms will also include, however, more investments, faster innovation and greater empowerment of employees.
This is indeed to where the USPS jobs are going----no one is telling those millions of Federal employees they are the ones who will be downsized and out----BYE BYE to what was a strong veteran employment.
From UBER and LYFT-----to all our buses, taxis, and delivery trucks------there is no intention of creating jobs for drivers at UBER OR LYFT-----it will go the way of our USPS drivers----watch out UPS TEAMSTERS.
No Driver Needed?
Sep 28 2015
OIG Blog Category: Mail Processing & Transportation
Self-driving vehicles might seem like a plot device in a science fiction movie -- think iRobot or Total Recall – but actually, they’re already here. Google and other companies have been testing driverless vehicles for several years, and some aspects of semi-autonomous vehicle technology, like automatic parallel parking, are available in some new cars.
Analysts expect autonomous vehicle technology to hit the roads big time in the next few years, which could signal major changes for the shipping and transportation industries and supply chains. Earlier this year, Daimler became the first manufacturer to be granted a road license for an autonomous heavy-duty truck. The trucking industry –critical to U.S. Postal Service operations – could benefit from these technologies. Autonomous vehicles are designed to improve safe driving, and testing indicates they are involved in fewer accidents. The technology is expected to cut down on fuel costs by facilitating more efficient control of speed, including rate of braking and acceleration.
That’s not all. The technology could enable automated truck convoys, which would consist of a driver in a lead truck setting the pace and taking over the steering, acceleration, and braking of a line of trucks following closely behind. Drivers in those trucks can rest until their respective turns to lead, thus improving productivity.
Self-driving vehicles could take on the tasks of loading and unloading goods in warehouses. Kiva, a warehouse automation system that Amazon acquired in 2012, uses autonomous vehicle technology to transport movable shelves, retrieving products for the worker who keyed them into the system.
Autonomous technology could also revolutionize last mile delivery. DHL said in a 2014 report that it could eventually use specialized driverless cars to deliver packages to its centrally located, self-service Packstations. The company even suggested that one day the Packstations themselves could act as driverless cars, traveling across town delivering directly to wherever the customer is.
Some analysts believe that in the future, customers could rent shared autonomous vehicles and pre-program destinations for daily deliveries. Such a service would allow small businesses to offer a delivery service without having to maintain a fleet of delivery vehicles.
Driverless cars still face many hurdles – cost, technology, and regulatory, to name a few – before they are commonplace on U.S. highways. However, the technology has already shifted from hypothetical to reality, and it promises major changes in industries critical to the Postal Service. How do you see this technology changing the delivery market?