PMG’s Agenda In Peril?

U.S. Postmaster General Patrick Donahoe faces numerous obstacles as he attempts to restructure his ailing agency. His customers are upset because he wants to raise prices. Members of Congress are unhappy with his efforts to shutter unprofitable post offices and terminate letter deliver on Saturdays.

Now Donahoe has another problem: a new cadre of employee union leaders who are more stridently opposed to his efforts than their predecessors. Yesterday, the American Postal Workers Union, which represents 220,000 USPS employees, said insurgent candidate Mark Dimondstein had defeated incumbent President Cliff Guffey in a race that the union itself descrbed as “hotly contested.”

Dimondstein received 26,965 votes, Guffey 21,007. Six other members of Dimondstein’s Members First Team were elected along with their leader. Dimondstein and his running mates have called for Donahoe’s ouster, accusing him of trying to “destroy” the USPS. They have promised to launch “a national coordinated plan” to fight plant consolidation and post office closures.

via Postal Worker Union Mutiny Imperils USPS Chief’s Agenda – Businessweek.

Stop Playing Politics With the USPS

No other public agency is saddled with this impossible requirement.

But Republicans were worried that a potential collapse of the Postal Service would lead to a hugely expensive bailout by the federal government.

Now the USPS is seeking to reduce its required $5.6-billion annual payment for future retiree health benefits. It deferred one of those installments in 2011, missed two in 2012 and another has just come due.

Even John F. Hegarty, president of the National Postal Mail Handlers Union, believes the fiscal woes of the USPS are based on these excessive health-care payments.

“Most losses in the last few years have nothing to do with the failed business model or the obsolescence of postal services,” Mr. Hegarty said, faulting the benefits funding.

Before Congress turns to proposed cost-cutting steps such as ending Saturday mail delivery or regular door-to-door service, it should ease the burden of pre-funding of USPS health-care benefits for decades to come.

It’s time for lawmakers on Capitol Hill to stop playing politics with the U.S. Postal Service.

via Mail fraud? U.S. Postal Service is set up by Congress to fail | SILive.com.

Senator Heidi Heitkamp State Convention Video

I apologize that this wasn’t up sooner.

Letter from the Board of Governors

Dear Postal Customer:

Thank you for your recent input concerning the deliberations of the Postal Service’s Governors regarding pricing strategies. We value your perspective and share your concerns about the business and economic impacts of price increases.

In an effort to balance these shared concerns with the precarious financial condition of the United States Postal Service, and recognizing the uncertain path toward enactment of postal reform legislation, the Governors of the Postal Service voted to pursue a moderate increase in the price of postage.

The mailing industry, America’s businesses, and the public we serve depend upon the affordability of mail—and we have acted to the best of our ability to pursue every responsible avenue of cost reduction available to us under the law. To preserve the long-term affordability of mail, we have consolidated 350 mail processing facilities, aggressively streamlined Post Office operations, reduced 22,000 delivery routes, and reduced our workforce by 203,000 employees and our annual operating costs by $16 billion since 2006.

These measures, while impressive, have been insufficient to restore the Postal Service to financial stability. Our business model is inherently inflexible as we have limited ability to restructure to adapt to a changing marketplace. As a result, the Postal Service continues to contend with a systemic imbalance between revenues and costs. For fiscal years 2011–2013, the Postal Service will record a cumulative net loss of approximately $27 billion, which includes defaults on $16.7 billion in mandated payments to the U.S. Treasury. Even after defaulting on those payments, we will have an intolerably low level of liquidity, caused in part by the fact that we have reached the statutory debt ceiling.

Under current laws, the Postal Service simply lacks the authority to fully pursue financially responsible and appropriate strategies for controlling costs and generating new revenue that are far preferable to price increases.

As a result of these limiting factors and urgent financial needs, and in order to address the extraordinary and exceptional circumstances which have occurred, the Governors have directed the Postal Service to file pricing adjustment requests with the Postal Regulatory Commission by September 26 that include a 1.6 percent increase in market-dominant products (First-Class Mail and Standard Mail) consistent with the increase in the Consumer Price Index (CPI). The Postal Service will also file a request for an additional 4.3 percent price increase in market-dominant products, which is subject to a 90-day review, and which is necessary in order to ensure that the Postal Service will be able to maintain and continue the development of postal services of the type and quality which this country needs. These adjustments are designed to raise $2.0 billion in incremental annual revenue.

Due to the price sensitivity that exists throughout the mailing industry and among users of the mail, we believe seeking a 4.3 percent adjustment above the CPI-U increase for market-dominant products is a moderate course of action given the financial challenges we face. We believe this prudent price adjustment request is reasonable, equitable, and necessary, and it is far less than the double-digit increase that is authorized under the law to help the Postal Service to recover from the extraordinary and exceptional circumstances that have confronted us.

Earlier this year, the Postal Service published a five-year business plan to put the organization on a firm financial footing. If fully implemented, the plan would close a $20 billion budget gap and enable the organization to operate profitably and reduce its debt. The implementation of many of the core elements of the plan is dependent upon gaining additional authority and flexibility under the law.

In particular, the Postal Service is seeking authority under the law to better control our healthcare and retirement costs; implement a more financially appropriate delivery schedule; develop and price products quickly; switch to a defined contribution retirement system for newly hired employees in the future; establish a more streamlined governance model; and obtain a refund of overpayments into the Federal Employees Retirement System.

A decision to raise prices is never one that the Board takes lightly, and this is particularly true in the current environment where volumes are declining. Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges. However, if these financial challenges were alleviated by the timely enactment of laws that close a $20 billion budget gap, the Postal Service would reconsider its pricing strategy. We are encouraged by the recent introduction of comprehensive postal reform legislation in Congress, and despite an uncertain legislative process, we are hopeful that legislation can be enacted this year. Nevertheless, without the legal authority to close the budget gap, the price adjustments announced today are necessary.

America needs a Postal Service that is financially stable, and we will continue to take the difficult steps necessary to meet our obligations as a self-funding organization that serves every American business and residence.

Thank you for your business and for your continued engagement in postal issues.

Sincerely,

Mickey D. Barnett

Chairman of the Board of Governors

United States Postal Service

via Letter from the Chairman of the BOG.

Senate Panel to Consider Rate Hike

The Postal Service’s proposal to raise the price of mailing a letter to 49 cents is sure to face scrutiny from lawmakers as a Senate panel considers bipartisan legislation to overhaul the cash-strapped agency.

Postmaster General Patrick Donahoe’s appearance Thursday before the Senate Homeland Security and Governmental Affairs Committee comes one day after the post office said it wanted to raise the price of a first-class stamp by 3 cents. He’s pressing lawmakers to act quickly on legislation to fix his agency, which expects to lose $6 billion this year.

The Postal Service’s Board of Governors, in its rate hike request, cited the agency’s “precarious financial condition” and the uncertain prospects for postal overhaul legislation in Congress.

via Senate panel to consider Postal Service rate hike proposal | Fox News.

Quickest Way to Postal Disaster

I represent America’s community newspapers. We have worked with the postal administrations of this country since Benjamin Franklin. We believe America needs a viable, universal mail service. America will need that service even as the digital age matures. People love to get mail. They love their local newspapers in the mail, as well, because we cover the “people-news” that makes communities hang together. I fear the impact on our industry if postage rates begin to skyrocket again.

Equally, I fear the impact on America’s rural communities and on the Postal Service’s dedicated workforce. Service has already declined for our newspaper delivery across the country. Higher rates and poorer service means fewer jobs in USPS as well as in all of the $1 trillion industry that collectively uses the mail. That includes community newspapers.

via Quickest path to Postal Service disaster: Make mail more expensive – KansasCity.com.

PMG Promises No Closures, Then Closes Post Offices Anyway

On September 19, Postmaster General Donahoe testified to the Senate Homeland Security Committee about the state of the Postal Service and the dire need for legislation.  During his testimony, the PMG made a pledge not to close post offices or processing plants while Congress debated postal reform.  It’s not a pledge the PMG is likely to keep.  In fact, he was already breaking it even as he made it.

The PMG’s promise about not closing facilities occurred during an exchange with Montana Senator Jon Tester.  (It occurs at 1:16:55 in the video.  The exchange was also reported on KPAX News.)  Here’s how it went:

Senator Tester: Is there going to be further consolidation of mail processing facilities or post offices while we’re doing this legislation and debate in committee?

PMG Donahoe: No [very quiet, barely audible].  The bill as it’s written puts a two-year freeze on mail processing facilities.  We have some scheduled for 2014.  We would not advance any of those things to try to get under the wire.  From a post office perspective, when I visited Montana last year, people told us, “Keep our offices open, keep our local identity.  If you have to change window time, we understand that but give us access to mail.”   And we’ve done that.

Original Story