Austerity: the Postal Service Outrage
Posted by randyshannon on February 11, 2013
You are probably hearing that the Post Office is “in crisis” and is cutting back Saturday delivery, laying people off, closing offices, etc. Like so many other “crises” imposed on us lately, there is a lot to the story that you are not hearing from the “mainstream” media. (Please click that link.) The story of the intentional destruction of the U.S. Postal Service is one more piece of the story of crisis-after-crisis, all manufactured to advance the strategic dismantling of our government and handing over the pieces to billionaires.
Here are a few things you need to know about the Postal Service “crisis”:
- The Postal Service is the second largest employer in the United States after Walmart. But unlike Walmart, which gets away with paying so little that employees qualify for government assistance, the Postal Services is unionized, pays reasonable wages and benefits and receives no government subsidies. (Good for them!)
- Republicans have been pushing schemes to privatize the Postal Service since at least 1996. In 2006 Republicans in the Congress pushed through a requirement that the Postal Service pre-fund 75 years of retiree costs. The Postal Service has to pay now for employees who are not even born yet. No other government agency – and certainly no company – has to do this.
- Unlike other government agencies (like the military) since 1970 the Postal Service is required to break even. Once more: the Department of Defense is not required to break even.
- While required to break even the Postal Service has to deliver mail to areas that are unprofitable for private companies to operate in. A letter sent from a small town in Alaska is picked up and transported across the country to a farm in Maine for 46 cents. While the Internet and recession have eaten into some of the Postal Services letter business, magazines, books, newsletters, prescriptions, advertising, DVD services like Netflix and many other services still depend on the Postal Service for delivery. And many people for one reason or another still send letters. In a democracy these people are supposed to count, too.
- But along with requiring the Postal Service to break even, Congress has restricted the Service’s ability to raise rates, enter new lines of business or take other steps to help it raise revenue. In fact, while detractors complain that the Postal Service is antiquated, inefficient and burdened by bureaucracy, the rules blocking the Postal Service from entering new lines of business do so because the Postal Service would have advantages over private companies.For example, Republicans in Congress forced the Postal Service to remove public-use copiers from Post Offices and even blocked the Postal Service from setting up a secure online system that allowed Americans to make monthly bill payments.
The Postal Service is a public service for We, the People, not a business. The Service is hamstrung by people who pretend it is supposed to compete and then won’t let it. They won’t help with taxpayer dollars and say it has to compete in the marketplace (again: the Department of Defense is not required to break even.) Then they give it rules that no private company could survive. Then when it gets into trouble, say that government doesn’t work, start laying people off, selling off the public assets, and saying it has to be “privatized” (so all the gains will go to a few already-wealthy people instead of to the public).
Manufacturing A Crisis
So Republicans have hamstrung the Postal Service, forcing it into “crisis” and are now “solving” the crisis by working towards dismantling and privatizing it. Here is how it works:
- Require the Postal Service to “break even.” (Again: the Department of Defense is not required to break even.)
- Require them to serve all areas of the country. (Which is a service to democracy and should continue.)
- Keep them from raising or lowering rates as needed.
- Keep them from using their competitive advantages to compete with private businesses.
- Require them to pre-fund 75 years of health benefits.
- When the Postal Service has the inevitable resulting financial “crisis” complain about government and unions and demand their buildings be sold, employees laid off and the service be dismantled and given to private companies.
If you don’t see the pattern yet, try this:
- Cut taxes,
- Double military spending,
- Obstruct all efforts to fix things,
- Wait a few years, then scream loudly about a “deficit crisis” and say we have to severely cut back on government — the things we do to make our lives better.
This is not the way an informed democracy is supposed to operate.
The postal service “crisis” is just one more instance of the ongoing pattern of government by lies, hostage-taking and manufactured crises. This is one more assault on a government service.
The “fiscal cliff” was a manufactured crisis, engineered to force cutbacks in the things We, the People do to make our lives better. The “debt ceiling” was a manufactured crisis, engineered to force cutbacks in the things We, the People do to make our lives better. The 2010 “tax deal” was a manufactured crisis, engineered to force cutbacks in the things We, the People do to make our lives better. Etc., etc., on and on…
And the Postal Service “crisis” is one more manufactured crisis.
Not Governing, But Destroying Government
Republicans don’t talk about governing, they talk about killing government, and when they get power they don’t govern, they destroy government. They appoint industry lobbyists to agencies that are supposed to oversee their own industries – and they don’t oversee their industries. They appoint polluters to the agencies that are supposed to protect us from pollution – and they let the companies pollute. And they appoint people who have called for getting government out of areas like education, medical care, etc. to head up and dismantle those departments for the benefit of the companies they came from.
This is not the way our government is supposed to operate. This does not serve We, the People and does not help us make our lives better.
The Push To Privatize Public Assets
Privatization means dismantling government and public assets and turning them over to private companies. It involves “contracting out” or even ending the services that were performed by We, the People (government) to make our lives better. Instead these services are operated for profit, which the citizens (and certainly not the employees) share none of the gains.
To be clear about this: contracting out government services “saves money” by laying off people who have good wages with benefits, and rehiring them at minimum wage with no benefits, while removing the accountability that goes along with a government service. For example, when a city “contracts out” its garbage collection, what happens is all the city employees who had government jobs doing this work are laid off. The private company that contracts to do the service “saves money” by hiring employees at a much lower wage with no benefits. It doesn’t have to meet the standards of government agencies, doesn’t have to be transparent, doesn’t have to use well-maintained equipment, etc. Obviously the city employees and the places they used to shop are worse off, but their lower wages mean everyone else’s wages come under pressure, too. So the “money saved” comes at a great cost to the public.
This same process occurs in all instances of privatizing or “downsizing” government. The public receives less service, wages generally are lowered, but a few people make a bundle at the expense of the rest of us.
Cato Institute Push To Privatize The Postal Service
The Koch brothers’ Cato Institute has been pushing to privatize the Postal Service (and the rest of government) for many years. (Note: Frederick W. Smith, Chairman & CEO, FedEx Corporation was on the Board of Directors of Cato Institute. FedEx is also a funder of the Cato Institute.) In 1996, for example, Cato’s Edward L. Hudgins testified before Congress on Postal Service privatization.
Today Cato employees write about “freeing the mail from the government’s grip” and ” getting the government out of the mail business.” (from Cato’s “Stamp Out the Postal Service.”)
While part of Cato’s motivation for privatizing the Postal Service is their efforts to transfer all public assets to private hands, Their website, Privatizing the U.S. Postal Service, explains their reasoning,
The USPS is in deep financial trouble as a result of declining mail volume, bloated operating expenses, a costly and inflexible unionized workforce, and constant congressional meddling. At the same time, electronic communications and other technological advances are making physical mail delivery less relevant.
America’s postal system needs a radical overhaul. This essay … concludes that taxpayers, consumers, and the broader economy would stand to gain with reforms to privatize the USPS and open U.S. mail delivery up to competition.
Cato’s funders also oppose unions because they enable working people to bargain for a larger share of the pie, and the Postal Service is unionized — the largest remaining union. In “The Postal Service Can’t Afford Unions,” Cato’s Tad DeHaven writes, “A big drag on the USPS’s bottom line is the pesky postal unions.” DeHaven continues,
The USPS has been able to eliminate thousands of positions through attrition, but it still possesses the second-largest civilian workforce in the country, behind only Wal-Mart. With 85 percent of that workforce protected by collective bargaining agreement, the unions have become a giant anchor on an already sinking ship.
The Postal Service is a PUBLIC service, serving We, the People and our democracy. It is our second-largest employer. Like Social Security it demonstrates that government can and does serve We, the People. You should be outraged by what is being done to our Postal Service! It is time to step up and defend all of our democratic institutions.
Here are a few other voices on this issue:
John Nichols writes in The Nation, “Postal Cuts Are Austerity on Steroids“:
The austerity agenda that would cut services for working Americans in order to maintain tax breaks for the wealthy—and promote the privatization of public services—has many faces.
Most Americans recognize the threats to Social Security, Medicare and Medicaid as pieces of the austerity plan advanced by House Budget Committee chairman Paul Ryan (R-WI), and the rest of the Ayn Rand–reading wrecking crew that has taken over the Republican Party. But it is important to recognize that the austerity agenda extends in every direction: from threats to Food Stamps and Pell Grants, to education cuts, to the squeezing of transportation funding.
But the current frontline of the austerity agenda is the assault on the US Postal Service, a vital public service that is older than the country. And it is advancing rapidly.
Dean Baker at CEPR, “Killing the Messenger: The Downsizing and Death of the Postal Service”:
Congress also has to be prepared to allow the Postal Service to win. About a decade ago, the Postal Service had an extremely effective ad campaign highlighting the fact that its express mail service was just a fraction of the price charged for overnight delivery by UPS and FedEx.
The two companies actually went to court to try to stop the ad campaign. When the court told them to get lost, they went to Congress. Their friends in Congress then leaned on the Postal Service and got it to end the ads.
Sen. Tom Carper of Deleware has a good information page: “Postal Reform Myths vs. Facts” (click through for the details):
With all the information floating around about the U.S. Postal Service’s financial crisis and the possible Postal Service default at the end of September, it can be difficult to wade through what is fact and what is fiction. Below are 8 Myths about the current crisis and 8 facts explaining what can and must be done to reform this vital American institution and ensure its services remain for generations to come.
MYTH #1: The U.S. Postal Service is bankrolled by taxpayers.
MYTH #2: The U.S. Postal Service will inevitably see a total financial collapse in the coming months.
MYTH #3: Congressional action to save the U.S. Postal Service amounts to yet another government bailout of a failing industry.
MYTH #4: Allowing the U.S. Postal Service to default will simply force much-needed restructuring and reform.
MYTH #5: A new government control board could better take the dramatic steps necessary to fix the U.S. Postal Service.
MYTH #6: A new government commission – similar to the Base Realignment and Closure (BRAC) Commission – could help the U.S. Postal Service close or consolidate unnecessary processing and retail facilities free from political pressure.
MYTH #7: The U.S. Postal Service must raise rates on certain postal products to help cover its losses.
MYTH #8: Sen. Carper’s bill – the POST Act – wants to end Saturday mail delivery.
Think Progress, “Thanks To Congressional Incompetence, Saturday Mail Delivery Is History“:
Postal access is, ultimately, a rights issue for rural Americans; since they live in areas where internet coverage is inconsistent, post office closures and slowed-down delivery can mean big limitations on communication. A lack of access to postal services can lead to a growth in economic inequality. The new rules for Saturday delivery, set to take effect on August 1, 2013, will continue delivery of packages, but discontinue basic first-class mail.
From September 2011, Brigid OFarrell, writing at the Roosevelt Institute’s Next New Deal blog, “Ten Reasons That the U.S. Postal Service is Not a Failure — and is Vital to Our Country”:
There is a crisis, but it is not because the Postal Service is inefficient and its workers overpaid. It is because the Postal Service:
1. Receives no taxpayer dollars
2. Is funded by the products and services it sells
3. Working with its unions, has already reduced its workforce by 110,000 employees, improved efficiency, and introduced new products and services
4. Handles more than 40 percent of the world’s mail more efficiently and at lower cost than other services
5. Despite the growth of the digital world, continues to support a $1 trillion mailing industry with more than 8 million jobs
6. Has a workforce that is made up of 40 percent women, 40 percent minorities, and 22 percent veterans, many disabled
There is a crisis, but it is not because the Postal Service is inefficient and its workers overpaid. It is because the Postal Service:
7. Is the only federal agency or private company required to pre-fund retiree health benefits for 75 years
8. Is therefore required to pay $5.5 billion annually to the Treasury, an amount not required of any other agency or company
Without these unique requirements, it would have earned a surplus of over $600 million during the last four years. In addition, the USPS:
9. Has over-paid its obligations to the Civil Service Retirement System (CSRS) by an estimated $50 billion (and this money should be returned)
10. Has overfunded the Federal Employees Retirement System (FERS) by approximately $6.9 billion (and would be profitable if these funds were returned)
David Morris at AlterNet takes a good look at the history of the Postal Service and the current problems, in “Why We Must Rescue the U.S. Postal Service From the Brink of Death,” and concludes:
The Postal Service can still be saved. But the grave has been dug. The coffin has been built. And funeral music is in the air. Only the most aggressive effort by AARP, the NAACP, Consumers Union and other affected constituencies can save this most public of all public institutions.