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USPS backs away from 5-day delivery plan— but for how long?

Nine weeks after Postmaster General Patrick Donahoe told a press conference that the Postal Service planned to unilaterally eliminate Saturday mail delivery beginning in August, the USPS Board of Governors announced that it was backing away from that plan.

In an April 10 press release following its spring meeting in Washington, DC, the board said the Postal Service would “follow the law” and would halt “implementation of its new delivery schedule”—for now.

“NALC is gratified that the Board of Governors has seen the light on the law,” NALC President Fredric Rolando said, “especially after Congress endorsed six-day mail and the Government Accountability Office affirmed that the continuing resolution mandating six-day mail is the law.”

The continuing resolution (CR), passed by Congress on March 21 and signed into law by President Barack Obama on March 26, funds the federal government through Sept. 30, the end of Fiscal Year 2013. The CR renewed the language that calls for six-day delivery. Meanwhile, the GAO stated unequivocally that Donahoe—despite his claims to the contrary—does not have the legal authority to reduce mail delivery service away from the current six-day schedule.

Although the governors effectively conceded that the postmaster general was wrong to initiate such a plan, their statement reiterated support for an eventual change to five-day delivery—meaning that letter carriers still have plenty of work left to do to make sure six-day mail service receives the legal protection it needs.

“I must credit the hard work of letter carriers, whose efforts to get the message out about Saturday delivery were critical to this positive development,” Rolando said. “But I cannot stress enough that this victory is only the most recent in our ongoing battle. Saturday mail is still far from being permanently protected—the Board of Governors stated that it expects legislation allowing elimination of Saturday mail to be included in legislation later this year. So all of us must remain diligent and continue to fight to retain this competitive advantage of ours that’s so critical to the future of the Postal Service.

“We understand better than anyone how losing Saturday delivery would reduce mail volume and revenue— sending the USPS on a death spiral,” he said. “It would disproportionately affect small businesses, the elderly, rural communities, the one-half of the public that pays bills by mail and the many millions who lack access to reliable Internet service. And it would cost tens of thousands of good middle-class postal jobs.”

It is past time for the Board of Governors to reconsider its entire “shrink to survive” strategy, Rolando said. “Degrading the Postal Service’s last-mile network is a losing strategy. More than a third of all business mailers have told us that they want to keep Saturday mail service, and eliminating it would drive millions of customers away.

“What the Postal Service needs now is a growth strategy,” he said, “and Congress must enact comprehensive reform that overhauls the USPS governance structure and provides greater pricing and product flexibility.”

Above all, Rolando said, Congress needs to reduce or eliminate the crushing burden it placed on USPS in 2006 to pre-fund decades’ worth of future retiree health benefits—a mandate that is shared by no other government agency or private enterprise and that has caused more than 90 percent of this year’s financial loss so far. In fact, figures from the first quarter of Fiscal Year 2013, which covers September, October and November of 2012, show that, absent pre-funding, the Postal Service would have realized a $100 million profit.

The Board of Governors’ statement had one final jab to make by calling for reopening and renegotiating postal labor contracts—“yet another sign that the Postal Service needs new executive leadership,” Rolando said. “Asking the NALC to renegotiate a contract that an arbitrator just settled in January is insulting and unnecessary.”

The 2011-2016 National Agreement, which reduced starting pay by 25 to 33 percent and allows for health care savings, also provides for several labor-management task forces to work on ways to increase revenues and cut costs.

Battling budgets

Also on April 10, as the Board of Governors was wrapping up its spring meeting, the Obama administration released its proposed budget for Fiscal Year 2014, a disappointing document that revived a number of the president’s past postal and federal employee provisions that the NALC continues to oppose.

“Once again, the administration supports in a deficit reduction plan the elimination of Saturday mail delivery, even though the Postal Service receives no taxpayer funds,” President Rolando said. “And once again, the administration has proposed balancing the budget on the backs of federal workers by calling for increasing Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) contributions of current postal employees—by 0.4 percent per year for three years—as well as for eliminating the FERS Social Security supplement for new employees, despite the fact that the postal pension accounts in the Civil Service Retirement and Disability Fund already are fully funded.”

President Obama also inserted into his budget one of the worst proposals he made during last year’s “fiscal cliff” talks with Speaker of the House John Boehner: a so-called “grand bargain” budget reduction plan to cut CSRS, FERS and Social Security benefits by calculating cost-of-living adjustments with a less generous version of the Consumer Price Index, known as a “chained” CPI.

“This proposal would add insult to injury for federal and postal employees by further reducing their benefits and cutting Social Security benefits, even though such benefits do not have an impact on the current budget deficit,” Rolando said.

“Moreover, it’s just plain wrong to downplay the crushing pre-funding mandate and instead advocate a call to end Saturday mail,” he said, “a move that would reduce the quality of service for our customers, weaken the Postal Service and slash letter carrier jobs at a time of high unemployment.”

Obama’s budget was due in February but was delayed in part by the admin- istration’s work on last year’s late-breaking “fiscal cliff” negotiations. “Since the House and Senate already have passed budget resolutions of their own, all of these disappointingly rehashed proposals from the Obama administration are intended mainly to coax Republicans in Congress into negotiations over a balanced plan to reduce the deficit,” Rolando said.

Not all of the news from the White House was bad, President Rolando noted. “Obama’s plan does include a number of positive postal reform ideas, such as short-term relief on pre-funding, a refund of an estimated $12 billion postal surplus in FERS, new commercial freedom for the Postal Service to serve state and local governments, and a one-time postage increase.

“Unfortunately, these ideas fall far short of the needed fundamental reform of the Postal Service’s structure, governance system, and business model, and funding provisions for retiree benefits.”

Mixed messages and ‘straw men’

A week before the Board of Governors’ announcement, Postmaster General Donahoe recorded a “State of the Postal Service” video to address what he called “a couple of mixed messages that need to be cleared up.”

“Just amazes me,” Donahoe said: “People say, well, it’s first ‘five day’ [mail delivery], then it’s going to be four, three, two and one. Unless their routes have no mail in them, I don’t know how in the world you would deliver less than five days a week. The idea that there’s plans on moving from six to five and then four, three, two? There’s nothing to that,” he said.

If the postmaster general was amazed, then President Rolando was startled by Donahoe’s convenient forgetfulness. “Where on Earth would anyone get the idea that he would consider further reductions in delivery days?” How about from what he has said? Just look at his USA Today interview back in July 2011:

Asked about the long term, Donahoe said, “At some point, we’ll have to move to three” days a week of mail delivery, possibly in 15 years. —USA Today, July 19, 2011

The postmaster general resorted to a “straw man” argument in his video, Rolando said, by asserting that NALC has said that there are plans to go to four-day, three-day or two-day mail and then denying that such plans exist.

“The NALC has never said there is an actual plan to do this,” he said. “What we’ve said is that this would be the consequence if the Postal Service were to continue to slash service and drive business away from USPS—revenue would decrease, weakening the Postal Service and necessitating further degradation of service.

Missing from the April 3 video was the bravado the postmaster general had presented two months earlier in his Feb. 6 press conference.

“I guess having dozens of members of Congress, a continuing resolution and the Government Accountability Office affirm that Saturday mail is the law of the land must have taken some of the wind out of Donahoe’s sails,” Rolando said. “And perhaps he’d already seen the handwriting on the wall when he acknowledged that an announcement on the matter was pending from his own postal Board of Governors.”

Donahoe’s seven-minute speech was not a complete waste of time for letter carriers, Rolando said. “The video did give us a valuable glimpse of what we continue to be up against from postal management as we fight to protect the Postal Service and its unique competitive advantage—delivery of the mail to every household and business address in America, six days a week.”

Legislative success

President Rolando said he was pleased with letter carriers’ legislative success so far this year. “It is really great to see congressional support building like this,” he said. “It goes a long way toward helping us influence those members of Congress who are in charge of the postal oversight committees in each chamber. And if—or when—these bills come up for consideration, it helps us when a large amount of our friends in the House and Senate are armed with the right information that gives them the confidence to voice any concerns on our behalf.”