The Truth about Postal Reform

May 1, 2012

By Reed Anfinson
President of the National Newspaper Association
And Publisher of the Swift County (MN) Monitor-News

Now that the U.S. Senate has passed S 1789 to reform the ailing U.S. Postal Service, critics are trying to disable the bill on its way to the House of Representatives.  Business Week recently cited unhappy stakeholders, including postal unions, postal management and some Republicans who mistakenly believe the bill burdens taxpayers.

Rep. Darrell Issa, R-CA, whose own bill awaits action in the House, blasted "special interests." But Business Week says, "Considering how many people are unhappy with the bill, it isn’t clear which special interests Issa is referring to."

S 1789 provides tools which will help ensure the survival of the Postal Service, the circulatory system for a $1.1 trillion mailing industry – making sure cash, greeting cards, packages, newspapers and magazines arrive on time.

Consider some of the alternative fixes.

Issa's bill would immediately end Saturday mail, close half the mail processing centers and thousands of post offices, and put a new board of political appointees in charge to trim workers' benefits and maybe wages. It would direct the Postmaster General to favor profit over service, which experts say will frighten away business mail.

At the other extreme are Sen. Bernie Sanders, I-VT, who wanted to keep everything open, labor unions who say the USPS will heal as the economy heals and the White House solution: raise rates.

For Sens. Susan Collins, R-ME, Joe Lieberman, I-CT, and co-sponsors Tom Carper, D-DE, and Scott Brown, R-MA, the extremes do little to ensure the USPS’ long-term survival.

S 1789 encourages a more flexible, less costly workforce. It would keep mail flowing while cutting costs. It provides for ending Saturday mail delivery in two years, if the USPS takes other significant steps toward financial viability. It would allow plant closures if the USPS maintains local mail delivery speed.

S 1789 provides a different vision. Consider:

• The USPS’ plant-closing plan would amass mail at automated urban centers, where costly machines sit idle much of the day. To optimize machine usage, the USPS would haul mail much farther. But the haul would slow the mailstream, particularly in rural areas far from metro plants. It would create second-class citizens who would get and send mail more slowly than urban dwellers and hamper smaller communities' quests for economic development.

• Many say they wouldn't miss Saturday mail. But the USPS builds its system around senders, not receivers. Who would be hurt by a five-day delivery scheme? Anyone who depends on timely mail delivery. Shutting down the system two days a week – three on Monday holidays – would slow deliveries for those who need prescriptions delivered; citizens who get newspapers by mail; and businesses needing six-day cash flows.  

• Closing small post offices seems a no-brainer. Surely not all are needed. But rather than closing them entirely, USPS could have circuit-rider postmasters to open offices a few hours a day, maintaining communities’ links to the world.

• The Congressional Budget Office says 1789 would cost $33.6 billion. But postage-payers, not taxpayers, carry this burden. Taxpayers face liability as the funder-of-last-resort only if postal revenues dry up – which is more likely to happen if mail slows to a crawl.

Finally, members of Congress may differ on how they see USPS. Is it a corporation or a government agency responsible for binding the nation together?

Fact: it is a Government-Sponsored Enterprise, and more like Fannie Mae than IBM or the Defense Department. It has to use business tools, but carry out a public mission.

The USPS has enormous power in the marketplace. Members of Congress who mistakenly see postal reform as an exercise in deregulation may actually unleash a powerful federal agency which would compete directly with private business, while those who look to raise postage so generous worker benefits can continue could derail the engine that keeps jobs alive.

What’s needed is a clear-eyed vision and a full understanding of the needs of all who the Postal Service serves. Postal management today has an impossible task, expected to accomplish business goals without the cost-controls businesses have, expected to achieve government ends without federal support.

Congress owns this confusion. Only Congress can fix it. “Deregulation,” rate hikes nor abrupt and disruptive approaches to labor costs will get the USPS to stability.

S 1789, on the other hand, provides crucial steps toward resolving issues the USPS faces.



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