Ralph Nader: cutting postal services is "suicidal" for USPS

Ralph Nader, the renowned consumer advocate and five-time candidate for President of the United States, has warned key US Congressmen that cutting postal services is a “suicidal prescription for further decline” at the US Postal Service. Nader wrote to the chairmen of the US Senate and House government oversight committees last week declaring that the financial troubles at USPS were an “entirely manufactured crisis”.

In particular, he urged Senator Joseph Lieberman and Representative Darrell Issa to sort out the “perverse” annual healthcare payments required of USPS by Congress in the Postal Accountability and Enhancement Act (PAEA) of 2006.

The Postal Service’s current $19.5bn debt could be entirely blamed on the $20.95bn that Congress has so far required the Postal Service to pay into the fund to cover healthcare benefits for its retirees for the next 75 years, he suggested.

Nader said it was an “incredibly unreasonable burden” for Congress, via its 2006 postal reform legislation, to require USPS to pay $103.7bn for 75 years’ worth of future retiree benefits in just a 10-year period – “something that no other government or private corporation is required to do”.

The letter from Nader voiced sentiments that have been expressed repeatedly over the past two years by postal management, unions and customers – as well as US Congressmen from both parties, though it would appear not enough in the House of Representatives to overturn the situation.

“Not unexpected”

Nader, who is politically a progressive independent, suggested that the decline in mail volumes was a less important factor in the Postal Service’s present troubles than the PAEA benefit payments, stating that the largest volume declines had coincided with the peak of the global financial downturn.

“Critics of the U.S. Postal Service will say that declining mail volume has been a result of the internet age and a move toward digital communications,” he wrote, adding that energy costs and an expanding US population were also factors impacting USPS revenues. “But they aren’t the chief drain on the USPS’s financial resources.”

He said the 10% drop in USPS revenue from 2007 to 2010 was “significant”, but “not to be unexpected”, given that other corporate giants saw revenues dropping by even greater margins during the same time.

Nader also demanded a return of $82bn in funds overpaid into USPS civil and federal retirement funds, as he warned that USPS efforts to rebalance its books with service cutbacks would inflict the “harshest” impact on the most vulnerable in society.

Cutbacks

Nader cast doubt on whether further USPS cutbacks were even needed from here on, with 110,000 jobs already cut in the last four years since the peak of US mail volumes in 2006.

With mail volumes reducing by 22% since Peak Mail, USPS is currently seeking to cut costs by shuttering nearly 3,700 post offices and more than half its processing plants, as well as slowing its First Class Mail service.

But Nader said such a move, along with the prospect of postal rate increases, would prompt a “suicidal” further decline.

“What is the sense in closing such a large number of post offices and cutting back on the service and the sense of community to millions of U.S. citizens in exchange for such a pittance of cost savings – especially when there are other much larger ways that can be adopted to put the Postal Service back on financially sound footing?” said Nader.

He insisted that Congress now needed to focus on maintaining the Postal Service’s universal service mandate, suggesting that the requirements of remaining self-sufficient and fiscally sound while continuing universal service were not necessarily compatible.

Support

The letter to the oversight chairmen last week came as various factions in Congress attempted to garner support for separate postal reform proposals, with a key difference at the moment being between a Republican-led proposal that refuses to sort out the retiree benefits and pension overpayments situation, and Democrat-led proposals that do.

On Friday, the House Republicans’ proposal stepped into the Senate, with Senator John McCain introducing the Postal Reform Act of 2011.

However, as it is the McCain bill stands little chance in the Democrat-controlled Senate, just as the Democrat proposals at present stand little chance in the Republican-controlled House.

Last week Republican Senator Scott Brown, who represents Massachusetts, revealed that he has been involved in meetings with House Democrats seeking bipartisan support in the Senate for their proposals, notably Massachusetts Representative Stephen Lynch, who has been leading House Democrat attempts at postal reform.

Senator Brown said on Thursday that there was “common ground” between the proposals on the table at the meeting, saying: “I was encouraged by a bicameral meeting that took place today with Congressman Lynch and others to forge a bipartisan plan to put the Postal Service on a sustainable financial path. With the Postal Service close to insolvency, we can’t afford to delay some difficult, but necessary, decisions.”