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What to make of flawed Brookings study

A Sept. 18 study published by the Brookings Institution, a Washington, DC-based think tank, absurdly calls for Congress to partially privatize the U.S. Postal Service, under the assumption that, as First-Class Mail volumes continue to decline, such a move would help the agency compete with private-sector competitors. Since its publication, the study, written by Elaine Kamarck, has been quoted and referenced in a number of news stories—The Washington Post, The Baltimore Sun and the Los Angeles Times, for example.

NALC President Fredric Rolando wrote a letter to the editor of The Washington Post about the paper’s coverage of the study. The letter ran on Oct. 9:

A postal article that didn’t deliver

The Oct. 5 Fed Page article “Repackaging the mail: Should USPS be sold?” contained misleading assertions. It purportedly was about a Brookings Institution paper on the U.S. Postal Service but astonishingly led with an unattributed policy prescription for downgrading service. “Everyone understands. . . . To stay afloat, the post office needs to get its costs under control, by” closing post offices and ending Saturday delivery, among other things, the article said. But those recommendations aren’t supported by most lawmakers, the Postal Service, the Postal Regulatory Commission and many businesses.

The shift in political sentiment — unacknowledged in this article — reflects sharply improving postal finances; to many lawmakers, it’s illogical to cut services now operating at a profit.

We’re told that Republican lawmakers have sought for years to sell the Postal Service. Which ones? Not one is quoted or even named.

In what may have been an attempt to bestow legitimacy on the idea, the article also noted that a Democrat from Brookings has joined this (unnamed) band of lawmakers who oppose public mail delivery. But later we’re told the Brookings scholar doesn’t support privatizing mail delivery.

The article lacked any serious discussion of how the Brookings plan would work or whether it makes sense. (It doesn’t.) What was the point of this article, beyond touting The Post’s policy preferences?

Fredric Rolando, Washington

The writer is president of the National Association of Letter Carriers.

NALC Chief of Staff Jim Sauber and American Postal Workers Union President Mark Dimondstein were quoted in an Oct. 7 Washington Post story about reaction to the study:

“She jumped to incorrect conclusions about what’s driving the losses,” Jim Sauber, chief of staff for the National Association of Letter Carriers, the largest postal union, said of Kamarck’s report.

“The conventional wisdom is that the Internet is killing the post service,” said Sauber, an economist. “I’m not denying that the Internet is having profound effects both positive and negative. But most of the loss is from the pre-funding [requirement] and the recession itself.”

Still, the unions don’t buy the assumption that the Postal Service is in such free fall that the best option is to sell it.  They also don’t buy the claim that taking its most profitable arm, its package business, private would come close to covering the expenses of its unprofitable arm, universal delivery of the regular mail.

“We would deny the public the right to universal and uniform mail service at reasonable cost,” said Mark Dimonstein, president of the American Postal Workers Union. “It will be about whether someone can make a dollar as opposed to a right that has its foundation in the U.S. Constitution.”

Sauber and Dimondstein say their commitment to saving jobs for their members goes hand in hand with their concern that private companies would simply cherry-pick the most profitable mail routes.

“Who’s going to serve Montana or Utah?” Sauber said. “You can’t make money delivering the mail there. We’d fight like hell to protect the standard of living of our members, but what you would have is a much smaller, weaker postal industry.”

Dimondstein said the exploding e-commerce business survives on the public infrastructure of the postal system: Post offices, mail carriers, mail sorting plants. “There’s not a private entity that could do all that.”

Sauber was also quoted in an Oct. 3 Baltimore Sun story about the study:

[Sauber] said he was stunned by what he calls Kamarck's "shoddy" work.

"She's bought in to a conventional wisdom that's just wrong," he said. "Breaking it up would make no economic sense."

Sauber said the Postal Service has made significant cutbacks after facing severe problems and has posted an operating profit for the last two years. He and other union leaders contend that the agency's $5.5 billion net loss in 2014 is entirely the result of a 2006 congressional mandate that it prefund its retiree health care costs decades into the future — a requirement placed on no other employer.

Sauber pointed to Kamarck's criticism of the Postal Service's failure to end Saturday delivery to save costs as an example of her "misdiagnosing" the agency's problems. He said UPS and Federal Express now use the Postal Service to deliver 30 to 40 percent of their packages for the "last mile" — including addresses in rural areas and inner cities that the companies find it unprofitable to serve.

"They want seven-day delivery," Sauber said.

So was USPS spokesperson Toni DeLancey:

Toni G. DeLancey, a spokeswoman for the Postal Service, said separating and privatizing the agency's package delivery business, "is poorly conceived at best."

"At worst, and aside from being politically and economically unrealistic, the proposal aims to shift an enormous financial burden onto taxpayers — which is unnecessary and unwanted in any policy context," DeLancey said.

And Rep. Elijah E. Cummings (D-MD) weighed in as well:

Rep. Elijah E. Cummings, the top Democrat on the House Committee on Oversight and Government Reform, said he is "dead set" against privatization. He said lawmakers of both parties are working together to draft legislation to put the Postal Service on a sound financial footing.

"This effort must and will continue until we have crafted bipartisan legislation that addresses the Postal Service's urgent needs," the Baltimore lawmaker said.

Click here for a link to the Brookings study.