Tucson Citizen.com
Caveat Lector - Politics, Government and the Free Press – by Mark B. Evans

Tucson, Congress need to butt out of USPS downsizing plan

by on Feb. 24, 2012, under Editorials, Politics

The U.S. Postal Service this week announced that it will go through with plans to close its Cherrybell mail processing plant here. Phoenix will now process Tucson’s mail.

The net effect of that on Tucson will mean a first class letter will arrive at its intended destination about a day later than usual.

That’s hardly cause for the garment rending and teeth gnashing by Tucson’s political leaders the past few weeks.

The elimination of about 150 jobs is despairing yet necessary if the USPS is to survive and continue its critical role in American society and economy.

The USPS is in trouble. It’s losing billions of dollars a year. The U.S. government doesn’t want to subsidize mail delivery. It wants mail users to pay for the cost of delivery.

The inefficient and labor-intensive processing system must change if the USPS is to survive. To do that, it has come up with a modernization plan that will eliminate about half of its nearly 500 processing plants. It also wants to close rural post offices, eliminate Saturday mail delivery and make a handful of other reforms in order to save about $20 billion in annual operating costs by 2015.

Standing in the way are numerous members of Congress spurred on by local and state leaders who want the USPS to reform its operations elsewhere. It’s kind of a reverse NIMBYism. Call it KIMBYism for Keep It In My Backyard.

But the Congress suffers from multiple personality disorder when it comes to the mail. It wants the USPS to pay its own way but it doesn’t want it to raise postal rates, close any facilities or layoff any mail workers, especially not in an election year.

When USPS leaders explain their problem and plans to solve it, it’s as if the Congress sticks its fingers in it ears and says “la la la la la, I can’t hear you, la la la la.”

Corporations are lobbying hard to keep postal rates low while the postal workers union is lobbying hard to preserve jobs. The USPS can’t do both.

The fact is, few Americans actually use the USPS. The overwhelming majority of mailed communication, first class or otherwise, is by business, mostly advertisements, then catalogs and bills.

Blame it on the digital age. The digital transformation is having profound effects on many industries. It’s an effect well known to TucsonCitizen.com where three years ago this editorial would have been written in a bustling newsroom of about 70 people. Instead it was written in a small, quiet office by one of the company’s three remaining employees.

Most of the communication we used to do via the mail is now done via the Internet. People send personal communications, photos, cards and letters via e-mail and social media and more people every year are using the Internet to pay bills or do their banking.

This digital transformation is only accelerating and will further reduce the volume of mail and therefore the number of postal carriers, postal processing centers and post offices needed to deliver it.

Yet there will likely be a need for USPS for many decades to come. Many Americans still can’t afford or don’t want to be part of the digital age and many written communications will still need to be hand delivered.

But the USPS doesn’t need a  bloated, inefficient system to handle that diminishing amount of mail. Like all industries affected by the digital revolution, it needs to downsize and the Congress needs to let it.

Either that, or all those KIMBYs clamoring to keep their processing centers and preserve the USPS like it was still 1980 need to open their wallets and pay up.

About a $1 a stamp ought to do it.

[Ed. Note: A few weeks ago, the Star mistakenly published on its op/ed page a flippant blog post I wrote about the wisdom of closing Cherrybell. The article spurred about 50 people to express their disagreement with my conclusions and their displeasure with me and a few of my ancestors. A little less than half of those communications came by telephone. About 20 came by e-mail and 8 came via the U.S. mail. I can think of few better ways than that to illustrate the point of the trouble the USPS is in and why it needs to reduce the size of its operation.]

This entry was posted on Friday, February 24th, 2012 at 2:07 pm and is filed under Editorials, Politics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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  • tiponeill

    I use the mail quite a bit – and I suspect others do too, and at no time have I seen anyone petitioning Congress not to raise postal rates.

    This is just, once again,  Repubs trying to destroy a government service and “privatize” it. They won’t be happy until they have “privatized” everything from the Fire Department to our roadways.

    A better solution would be to allow the USPS to act in a more businesslike manner and raise rates. I would be happy to pay more – I know that it would cost much more if I was forced to use another service like FedEx.

    I bet they can do it for less than a dollar a letter.

    As an added bonus, our all mail voting system won’t be as subject to fraud and won’t have a Phoenix postmark.

    (Although the Repubs would dearly love that, too)

  • takak

    This sounds more like a PR release rather than journalism.  You didn’t mention the largest reason the USPS is losing so much money: the Postal Accountability Enhancement Act (PAEA).

    This act requires the USPS to do something no other company or government entity is required to do: pre-fund future retirees’ health benefits for the next 75 years.  Read that again, yes it’s ridiculous.  They have to set aside money for people who aren’t even born yet.  $5.5 billion per year.  That more than covers the $3 billion they are now trying to save.  Also, a preliminary audit has shown that the USPS has overpaid into pension funds to the tune of about $75 billion.  People, do your research and speak out before it’s too late.  There is a very simple solution here: move the pension overpayments into the future retirees’ health benefits accounts.

  • Your_Uncle_Karl

    It seems inevitable that the USPS will have to change in fundmental ways, just as we all have to adapt as the times change.  Not that we have to like it, though. 

    There was a nice piece on NPR recently about how the PO once served as an agent for social change in so much as it was a place where minorities and even hippies could expect not to face discrimination in hiring and promotion.  This stood out in contrast to the private sector at the time.  A good example of the capacity of government to do good.

  • BajaDemocrats

    “Standing in the way are numerous members of Congress spurred on by local
    and state leaders who want the USPS to reform its operations elsewhere.”

    - You have it half right. Congress mandated the the USPS be a standalone entity expected to fund itself fully from fees from the services it provides. But then it also mandated that executive management be left to the hands of Congress. The USPS can’t make any major changes in service without approval from Congress. How can ANY business be expected to thrive & prosper when any major executive decision requires and act of Congress???

    They proposed ending Saturday mail delivery over a year ago, and still no action from Congress. Ending Saturday delivery is an easy step to save a lot of money with minor disruption in service. Do UPS or FedEx deliver on Saturday? And as takak pointed out, Congress mandated prepayment of pensions for 75 years – insane! And it was done for one reason: greed. Think all that pension prepayment money is stuffed under a mattress? No, the government issues an IOU and takes it to cover deficit spending without adding to the national debt on the ‘official’ books. Finally, there should be some government subsidy to fund unprofitable operations that serve a vital need to citizens. Notice the article mentions closing rural post offices? I sell on eBay & Amazon. I take my packages to the little post office in Cochise, a 10 minute drive. I highly doubt that little post office makes a profit. So, close it and expect the hundreds of customers to drive 30 miles to the post office in Wilcox, with today’s gas prices? I imagine the same is true with many inner city post offices. Local post offices serve a vital need to many citizens, and the mandate of the US Postal Service is to serve ALL citizens, and serve them equally.

  • http://www.facebook.com/profile.php?id=1358689446 Judith Clark

    I think we are manipulated in many ways and this is a prime example. What motivates our politicians to ruin something that has been so successful? Money. It comes down to someone making money off of the demise of the USPO. Follow the money back to the lobbyists and you’ll see what I mean.

    • tiponeill

      Actually their goal is to destroy all government services

  • http://profile.yahoo.com/BR6CZ3QTIWLVST75SHGPVIRKSY Realist

    These are decent paying Federal jobs that help the battered local economy. Not fighting to retain these jobs while arguing to station F35s or unmanned drone centers here in Tucson would be ludicrous. The USPS criteria for closing down should be census data which shows that the Tucson and S.Arizona have been growing steadily in population and is in need of the service. So ignore Evans bogus arguments and email Kyle and McCain to have them support the Tucson processing Center!

  • remkmm

    The U.S. Postal Service ended the first three months of its 2012 fiscal year (Oct. 1 – Dec. 31, 2011) with a net loss of $3.3 billion. Without the requirement to prefund retiree benefits, the net loss would have been a positive net gain of $200 million for the quarter ended December 31, 2011, compared to a net income of $226 million for the quarter ended December 31, 2010. It made a profit last year too, of slightly more, $300 million, although it’s hard to remember hearing anything about it when you take into account for the prefunding requirement.
    Back in 2006, the last time it tried to save the post office, Congress wanted to make sure that there would be plenty of money to pay for the health care of retired postal workers.  The Postal Accountability and Enhancement Act (PAEA) therefore required the Postal Service to pay about $5.6 billion a year over a ten-year period, 2007 through 2016, into a fund to cover retiree health care — for the next 75 years.  That remedy has practically killed the patient.
    The trust fund payments are the cause of the USPS losses since 2006. Without them, the USPS would have been profitable over that time period. All of the current USPS debt is money it has had to borrow from the Treasury so that it can then loan it back to the Treasury for the “trust fund”. It’s a shell game designed to take “off budget” postal revenues, and apply them to an “on budget” trust fund, artificially lowering the federal budget deficit.
    The USPS Inspector General, David C. Williams, said that the fund is in better shape than comparable funds in any other government agency or private-sector business.  “Prefunding retiree healthcare is rare in the public and private sectors,” wrote the Inspector General. “We have been unable to locate any organization, either public or private, that has anything similar to the Postal Service’s required level of prefunding of retiree health benefits.  The Postal Service is currently funded at 49% of its estimated current liability.  The federal government does not prefund its retiree health benefits AT ALL, and the military is funded at a 35% level.  Only 38 percent of Fortune 1000 companies who offer retiree health care benefits prefund the expense at all, and the median funding level for those organizations is 37 percent.”
    Furthermore, Inspector General said the programs are flush with funds. He said the Postal Service has “significantly exceeded” the amount that the federal government and the nation’s most profitable corporations have socked away for pension AND retiree health care. “The USPS has built a war chest of over $326 billion to address its future liabilities.”
    No other company or agency has the same obligation to prefund retiree healthcare benefits.
    Even if one accepts a need for some level of prefunding, the 2006 law was based on assumptions as to volume and workforce levels that no longer apply, yet no adjustments have been made to the payment levels. If the USPS had been allowed to run like a business since 2006 (i.e. without prefunding and Congressmen micro-managing its operations), it would be a profitable enterprise facing the recession with ample cash reserves. Between the “mythical” trust fund with its very real $44.1 billion, and the undisputed $6.9 billion FERS overpayment, the supposedly “insolvent” USPS effectively has almost $51 billion. With this future retiree health benefit account earning 3.5 to 4 percent interest every year, it could be fully funded in the next 21 years without the need for additional funds.
    Republicans refuse to drop the accounting gimmick that places USPS operations “off budget”, while its retirement funds are “on budget” This allows them to cry “BAILOUT” if the USPS asks for some of its own money to be returned to fund its operations. Congress created the “crisis”, not the USPS unions or managers, and Congress needs to correct its mistakes before it destroys the US Postal Service. Don’t blame the salaries of postal workers: their selection by high exam scores, training and accountability, plus good wages and benefits has produced high productivity and a low quit rate. The postal workforce has, in fact, shrunk from nearly 800,000 in 1999 to 550,000 career employees today. Most of those job cuts had to do with increased automation, but many have come at the price of service – despite the post office’s original constitutional mandate.
    Let’s be clear: these short-term accounting efforts will not solve the long-term financial problems facing the U.S. Postal Service.  In order to do that, the Postal Service needs to adopt an entirely new business model which makes it much more entrepreneurial, pro-business, and pro-consumer compared to where it is today. 

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