USPS and unions disappointed at passage of US postal reforms

Postal reform legislation passed by the Senate yesterday falls short of what is needed to restore long-term viability at the US Postal Service, its governors and CEO have said. The Postal Service will have to alter its cost-cutting plans should the 21st Century Postal Service Act (S.1789), as amended this week, achieve sign-off by the House of Representatives and President Obama.

The USPS Board of Governors issued a statement last night warning it was “totally inappropriate” of US lawmakers to add requirements for the Postal Service to keep “unnecessary” postal facilities open.

Among the provisions of the bill are requirements for extra reviews of USPS facility closures, some protections for retail and mail service standards, and delays on actively closing post offices and mail plants.

The amendments added a one-year delay on shuttering rural post offices and the Senate exerted pressure – though not mandatory – for no facilities to close before Congressional postal reforms are enacted, which could take months.

USPS had wanted to start the closure process from the end of next month, with its plans aiming to ultimately consolidate more than 230 mail plants and as many as 3,700 post offices.

The Postal Service, which is currently $13bn in debt and losing about $25m a day thanks to ongoing declines in its mail volumes, will also be prevented by the Senate bill from abandoning Saturday deliveries for at least two years.

“Not enough mail”

The Board of Governors’ statement said last night there was ‘simply not enough mail in our system’ to keep the current retail and processing networks, with mail volumes declining more than 20% in the last five years.

Patrick Donahoe, the Postmaster General and CEO at USPS, attempted to be diplomatic, saying USPS “would have preferred the Senate allow the Postal Service to move further and faster in addressing its cost reduction goals”.

But he said USPS calculations suggested that if S.1789 becomes law, the Postal Service would still be making losses “in both the short and long term”.

“If this bill were to become law, the Postal Service would be back before the Congress within a few years requesting additional legislative reform,” said Donahoe.

USPS executives are looking to cut annual operating costs by more than $20bn by 2015 from the current $75bn, but needs legislation changes to achieve half of those cuts.

Donahoe, who would have his own salary reduced under an amendment that passed yesterday, insisted his team’s current cost-cutting plan, which would be altered by Congressional proposals, was “fair and responsible” to customers, employees and communities.

“We are hopeful that the legislative process will continue and that enacted legislation will put the Postal Service on a sustainable path to the future.”

The Postmaster General has told lawmakers he supports many of the provisions of the House postal reform legislation, which is currently awaiting a floor debate in the lower chamber of Congress.

The House bill would be more radical in cutting costs than the Senate bill, with controlling Republicans particularly keen to protect the federal budget from shouldering USPS financial burdens, and supportive of an immediate ending of Saturday deliveries. But, a key aspect of the House bill not supported by USPS executives is its proposal for an appointed Commission to take control of cost-cutting at the Postal Service.

Unions

While postal management said last night that the Senate bill does not do enough to cut costs at the Postal Service, unions were disappointed that the bill “embraces a downsizing strategy” and holds out the potential for ending Saturday deliveries.

National Association of Letter Carriers president Frederick Rolando criticised the bill for restructuring, rather than abandoning, requirements for USPS to prefund future retiree healthcare liabilities. The restructuring would still leave the payment obligation “too heavy to allow the USPS to regain a sound financial footing”, he said.

Rolando, whose union represents more than 200,000 letter carriers, said the bill made it “almost impossible” to save Saturday deliveries after the two-year moratorium, claiming that 80,000 jobs would go if USPS moved to a five-day delivery week.

“We’re disappointed, but we are determined to fight on,” the NALC president said. “It may take months to get a bill through the House of Representatives, but we will not rest in this struggle to defend a strong and viable Postal Service.”

Rolando said the rival House bill to save the Postal Service was “truly regressive”, but insisted union demands to save six-day delivery and fix pension and healthcare funding had a “lot of bipartisan support” in the House.

The American Postal Workers Union said yesterday that this week’s amendments had improved the Senate bill, though also suggested the bill did not provide the relief needed for USPS to “meet the challenges of the future”.

Cliff Guffey, the APWU president, said: “Although we sought stronger, longer safeguards, this is an improvement over the original bill, which did nothing to preserve service. Protecting service is essential to preserving the Postal Service.”

The National League of Postmasters said it was “pleased” with this week’s amendments to the Senate bill, with its president Mark Strong highlighting extra protections for rural post offices and the tackling of pension and healthcare overpayment issues.