But before we look at the cuts being proposed, what's so manufactured about this crisis?
In 2006, the postal service generated a profit. That was the last time it did so, because in late 2006, a lame duck Congress passed the Postal Accountability and Enhancement Act, which among other things forced the postal service to fund its retiree health benefit obligations 75 years into the future, and to do so within 10 years. Taking care of retirees is a good thing, and we've seen far too many workers expected to fill the gaps in pensions and health benefits underfunded through no fault of their own. I'm not arguing that the postal service should reverse course so far that it leaves its retirees without health care. But if you needed a single concrete example to demonstrate that this is a manufactured crisis, here it is: Congress put a burden on the postal service that no other government agency or private corporation faces, and when that causes or accelerates problems, it's taken as evidence of certain doom and the need to make deep cuts. According to Sen. Bernie Sanders, not someone who is going to argue for leaving retired workers in the lurch:
[T]he Postal Service should be released from the “onerous and unprecedented burden” of being forced to put $5.5 billion every year into its future retiree health benefits fund. Sanders’s office explains that “even if there are no further contributions from the post office, and if the fund simply collects 3.5 to 4 percent interest every year, that account will be fully funded in twenty-one years.” At the same time, the senator suggests, the postal service should be allowed to recover more than $13 billion in overpayments it has made to a federal retirement systems.So the immediacy of the "crisis" the postal service faces is one created by Congress. But there are legitimate long-term challenges, including one in particular we hear a great deal about: the internet. We're all paying our bills online these days, leading to a precipitous decline in mail sent. Right? Well, there's another factor no one seems to talk about: the recession. It's funny when you think about it, because we know how deeply the recession struck the government at all levels, businesses, and individuals. But again and again we're told that the reason, the reason not a reason, for declining mail is the internet. Yet:
From peak first-class volumes in 2001 to 2007, before the recession began, first-class mail volumes declined from 103.6 billion to 96.3 billion — a total drop of 7%, or just over 1% a year. From 2007 to 2011, first-class volumes declined from 96.3 billion to 73.5 billion — a drop of 23%, or about 6% a year.The internet should also create possibilities. After all, while people pay their bills there, they also rack up a lot of those bills through online shopping, and someone has to ship those packages. UPS and FedEx don't serve as many doors as the postal service, and in many cases they contract with the postal service to provide "last-mile" delivery.
In other words, first-class mail has declined by 30% over the past ten years. About 7% of that 30% happened in the six years before the recession, and the other 23% happened in the four years after the recession began.
(Continue reading below the fold)
For that matter, UPS or FedEx taking a package the last mile can create hassles of its own. I live in an apartment building and work from home. Only our actual mail carrier has a key to the outer door of my building, and I cannot tell you how many times I have gone running downstairs in response to desperate pounding from UPS or FedEx trying to deliver something for the online shopping addict in apartment one. If I didn't work from home, she'd face what she did one day when I was out—a slip from UPS saying they'd be back between the following hours, and be there if she wanted her package. The stress over how to get a package being delivered during working hours by a private carrier who can't get into your building is a not uncommon fact of apartment life. Which is to say, it's not that packages aren't being carried. They are. Surely there's an advantage to exploit here somewhere.
But Congress and top postal management aren't looking for advantages or for growth. They're looking to cut, supposedly in the name of equipping the postal service for the long haul. However, an analysis (PDF) by the financial advisory firm Lazard, conducted for the National Association of Letter Carriers, notes that:
...one of the Postal Service’s own witnesses at a Postal Regulatory Commission hearing on its network optimization plan recently acknowledged the existence of a study that found that the combined effects of all service cuts under consideration would reduce mail volume by over 10% – an amount which would offset most of the proposed savings from these initiatives.That means the proposed cuts—no Saturday delivery, longer first-class delivery times, closed processing centers and post offices, and more—would set off a death spiral, with cuts leading to loss of business leading to further cuts. This wouldn't just affect the postal service, slowing mail delivery and forcing many people in rural areas to drive long distances to get their mail, it would affect the entire economy. We're talking here about tens of thousands of layoffs that would disproportionately affect African-Americans and veterans. And cutting that many jobs, especially in concentrated clumps with closing of processing centers, would hit local economies hard.
But that, with the exception of Bernie Sanders and a few other officials fighting to protect the postal service, is where the establishment political discussion is happening. As the Senate debates S. 1789, a bill that would simply put the postal service on a slightly delayed death spiral rather than an immediate one, a number of individual senators have potentially useful proposals, seeking to protect rural mail delivery, the ability to vote by mail in states that rely on that, prescription delivery for senior citizens who may not easily be able to get to the pharmacy, capping postal executive pay—postal executives are paid more like corporate executives, in many cases far more than cabinet secretaries make—and allowing postage prices to be raised beyond the rate of inflation (our first-class postage is cheaper than in most other countries).
There are also proposals for ways the postal service could expand its services. It could potentially return to a postal savings service for the many people who don't use banks. Sen. Mary Landrieu has suggested the post office could become a place to go for notary publics, copying and handling hunting and fishing license sales. I would love to see fax services at my local post office—the day before tax day, I needed to fax my electronic filing permission. There's a post office less than a five minute walk from my house, but it doesn't offer fax services. I had to go to a private packing and shipping store, where I paid $2 a page. Why can't the post office add fax services and let me pay $2 a page there? In fact, the postal service has tried to expand its services in much larger ways than these, only to be stopped by Republicans not wanting it to compete with private business. This happened with online bill paying, money transfers, phone cards, postal meter cartridges, and more.
So when the postal service tries to expand its services as a private business could do, it's stopped by Congress. But operating in the restricted ways it's allowed, it's assailed for being an unresponsive money-losing dinosaur. Clearly a number of senators have grave concerns about S. 1789 and are trying to blunt its harm with amendments. But this is a slate that needs to be wiped clean. We need a postal bill that rejects the language of crisis and does not seek to manufacture further crisis. As Lazard notes, "A business plan based on degrading your greatest strength is not likely to be a path to success." The postal service needs a business plan that expands on its strengths and takes it into new areas of service.