For months, Americans have heard dire warnings about the impending collapse of the United States Postal Service due to fiscal insolvency. Now, at midnight today, the agency is bracing for its first-ever default on billions in payments due to the Treasury. Although the Postal Service’s inability to pay the five-and-a-half-billion-dollar payment toward retiree health benefits won’t immediately effect the Postal Service’s day-to-day operations, it is likely to fuel a fresh round of demands to examine the agency’s role in America today. First-class mail volume, which has fallen 25 percent since 2006, is projected to drop another 30 percent by 2016. The agency faces a cash shortage of $100 million this October stemming from declining mail volume that could balloon to $1.2 billion next year.
postal workers say the much-touted crisis facing the U.S. Postal Service isn’t what it seems. Rather, they point to a 2006 law that forced the Postal Service to become the only agency required to fund 75 years of retiree health benefits over just a 10-year span. The American Postal Workers Union says the law’s requirements account for 100 percent of the service’s $20 billion in losses over the previous four years, without which the service would have turned a profit. In late June, 10 current and former postal workers launched a hunger strike to protest the pre-funding requirement.
JAMIE PARTRIDGE: Well, the problem is not about the mail volume going down, and problem is not the internet. The problem is not even private competition. The problem is a pre-funding mandate that Congress imposed in 2006 that the Postal Service pre-fund retiree health benefits 75 years in advance.
The Postal Service had hoped that Congress would help defer the payment that’s due today, but the House has taken no action. The Senate passed a measure that provided incentives to retire about 100,000 postal workers, or 18 percent of its employees, and allowed the post office to recoup more than $11 billion it overpaid into an employee pension fund. The Senate declined to act to stop Saturday deliveries.
Dennis Kucinich talking:
Congress passed a law in 2006 that mandated that the Postal Service pre-fund its employees’ health—its retirees’ health benefits for 75 years, but to do it within a 10-year period. So, this $5.5 billion payment that’s made today that the Postal Service isn’t going to make, that Congress should correct, is a manufactured crisis.
Now, why would interests what to manufacture a crisis? To further privatization. Who’s lobbying against the post office on this? Banks, for one. I mean, think about it. Banks would love to crush the Postal Service, because they wouldn’t have to process checks the way they do now, number one. Number two, banks would head off any attempt for postal services to go into certain banking functions such as they do right now in the U.K.
So this is—you know, the American people have to wake up here about what’s happening with the Postal Service. And, you know, finally, Amy, under the Constitution, guess what? It’s Congress’s responsibility to establish a postal service, Article I, Section 8, Clause 7. And Congress is right now working on disestablishing a postal system.
let’s look who wins if this happens. You know, if you start to cut overnight deliveries, well, UPS and FedEx win. So there are—you know, I can’t say that they’ve lobbied me on this, but you can see who the winners and losers are. And who loses? The American people, because the whole concept of the Postal Service, embedded in that is the idea of universal service, that if you—that if you’re poor, if you live in a rural area, you’re going to get served just like someone who lives in a city and who may be wealthy. But this whole idea of universality, which is a bedrock principle of democracy, is about to go the way of the dodo bird, because Congress has manufactured a crisis with the passing of the 2006 law and wants to compound the crisis with other bills that would break union contracts, restrict—move to five-day delivery and create other reductions, so that you have a downward spiral in the service model and would begin the disintegration of the U.S. Postal Service. This is wrong, and it has to be exposed for what it is: a fraud.
Peter Orszag, the former Obama administration Office of Management and Budget director, wrote an opinion piece for Bloomberg News called “Best Fix for Postal Service Is to Take It Private.”
This person worked inside the White House. Think about that. I mean, we really have a government that’s just going to the highest bidder, which is all these private interest groups that are hovering around like vultures trying to pick off a Postal Service which actually is one of the strongest services that government provides through, you know, people who are involved in delivering mail. This really needs to be challenged, because this is about privatization at its core. So, thanks to Mr. Orszag for being so candid about things that I’m sure he supported when he was one of the president’s top advisers. So, you know, we need to stand up for the whole principle of government acting as a public service. Government is not there to make a profit.
every institution has to evolve. There’s no question about that. But to say—there’s a difference between allowing an institution to evolve and grow, and destroying it. And right now the attempt is being made to destroy the Postal Service. This would impact on all Americans. It would drive up the cost of mail. I want everyone watching this to think about what happens. If the Postal Service is destroyed, what do you think the cost of mail is going to be? What do you think is going to happen when people who live in the inner city, who may not—you know, who may not have a job and may have difficulties being able to survive day to day, how are they going to communicate with each other? I mean, this is, like, unfair. It’s also going to be a disaster for third-class mailers, because their costs are going to go through the roof. I mean, there’s something—we have to have a civics lesson here about the essentiality of Postal Service delivery universally to people in the country and what it means to them.
I don’t have any problem with having alternatives, but you can’t use those alternatives to try to destroy what is the main service. And that’s what I take issue with. And so, the idea that we should just privatize everything? No, absolutely not. You know, they’re trying to privatize the military, privatize other government functions. Every time you privatize something, the cost goes up to the public. It may profit the private sector, but it certainly doesn’t benefit the public. And the Postal Service is a constitutional duty of Congress, and if Congress can’t do it, those members who feel they can’t support the Postal Service, well, they ought to get out of the way and help those and permit those to come forward who support the Postal Service. That’s Democrats and Republicans alike.
Darrell Issa is a brilliant businessman. I mean, he—you know, if we put Darrell Issa in charge of the U.S. post office and had that as his charge to help the post office survive, he’d figure out a way to do it. But he’s on the other side of this. You know, he’s advocating the cause of private business. OK, let’s look at that. But it’s not his decision to make alone.
We have to understand this principle of universal service goes beyond corporate profit. It goes to the essence of what a democracy is about. Think about it. Why did the founders put the post office in the Constitution? I mean, really? You know, they were delivering mail by horseback then. So, there’s—because there was a thought about being able to move the commerce of the country, and not only that, but to be able to help people communicate with each other. That need is no less. Can the post office update itself? Of course. But that’s not what the argument is underpinning this. The argument is whether or not the post office is going to survive and whether it’s—or whether it’s going to be thrown in a trash bin to be picked up by corporate interests, who will get it for essentially pennies on the dollar and then recapitalize it to make hundreds of billions or trillions of dollars in the long run. We cannot let that happen.
Chuck Zlatkin talking:
“We had to say goodbye to the telegraph. And, you know, with email, with all the different kind of social media, we just don’t need the post office anymore.”
it’s an absurd argument. I mean, everybody who orders something on their computer, they still haven’t figured out a way to get the shirt through the computer to you. It’s still delivered to you. And it may be true that people aren’t writing letters to grandma the way they used to, but everyone’s getting their Netflix through the Postal Service.
So, what hurt the post office were factors that could have survived the electronic alternatives. It would still be OK. Even with the economic collapse of 2008, where, you know, businesses used the Postal Service less, the Postal Service would still be OK. It’s these congressional mandates.
But now, you know, we’re talking about 2006, but we’re not going back to 1971, when the Postal Service was formed after the great postal strike of 1970 and postal workers got collective bargaining. What happened then is that the Postal Service had to pay into the employees’ pensions. And there was a study done in 2009 by the inspector general of the Postal Service that said the Postal Service had overpaid $75 billion. In 2010, the Postal Regulatory Commission commissioned their own study that said, “Oh, it was only about between $50 and $60 billion.” So, in addition to these overpayments since 2006 into the future retirees’ health benefits, they’ve overpaid into the pension funds for decades. The Postal Service has been a cash cow for the government, not vice versa.
– source democracynow.org
Chuck Zlatkin, legislative and political director of the New York Metro Area Postal Union.
Rep. Dennis Kucinich, Democratic congressman from Ohio.