In nine months in office, the new Republican House majority has amply proven the emptiness of its early promises: to create jobs, run government more like a business and respect small-town America. But there’s no better object lesson in Republicans’ real priorities than their bid to end the Postal Service as we know it.
The United States Postal Service (USPS) transports hundreds of billions of pieces of mail a year to addresses everywhere in the United States. It does so with no government subsidies – if you don’t use the postal service, you don’t pay for it. Now, like the US economy, the USPS faces a crisis brought on by Republican policies, which Republicans insist only more right-wing policies can solve. USPS has informed Congress that it can’t pay $5.5 billion due to a federal retiree health fund September 30, raising prospects of default. Republicans, led by Rep. Darrell Issa, are demanding layoffs and service cuts. Here’s how the Republican plan – burning the Postal Service to save it – contradicts the stories Republicans tell us about themselves.
1. Republicans are Demanding More Unemployment
Every month brings a new round of Republican press releases announcing that the latest anemic job growth shows the failure of Obama’s extreme liberalism – even as the numbers are worsened by the ongoing decline in public sector employment. Republicans are ordering up more job-killing, pushing legislation (with the postmaster’s support) that would shred the no-layoff language in the four unions’ contracts and allow for 100,000 pink slips (on top of tens of thousands set to retire and not be replaced). At a hearing last year, Issa told the postmaster that USPS has “more or less a third more people than you need” on payroll.
Those layoffs would be particularly damaging for the groups that disproportionately get hired at the post office: African Americans and military veterans. The Postal Service has a multi-decade policy of preferential hiring for veterans. While USPS has been quick to say such preferences would insulate veterans from layoffs, unions retort that if entire post offices are closed, everyone who works there loses their jobs. “If you lay off 100,000 individuals, at least 25 to 30,000 will be veterans,” says American Postal Workers Union (APWU) president Cliff Guffey.
North Carolina A & T State University professor Philip Rubio points out that USPS is “at the hub of a 1.3 trillion dollar mail industry,” which increases the damage to the overall economy if mail service is limited or compromised.
So far the vocal House Republicans have been adamant about seeing USPS shrink and its workers’ protections shredded. Unions and USPS advocates have suggested a range of reforms to address the budget challenge: allowing USPS to mail alcohol; expanding the range of government functions post offices can perform; letting the cost of some forms of mail rise faster than inflation; removing potentially illegal business discounts. But the largest, and simplest, would be to undo an unfair mandate a Republican Congress placed on the Post Office in 2006.
2. Republicans Are Making Government Run Less Like a Business
Republicans love to contrast the supposedly fair and efficient ways of the private sector with the allegedly bloated, hapless ways of government. That claim’s dubious merits aside (just compare Medicare and private health insurance), it’s not the advice they’ve applied to USPS.
Instead, in their last month in the majority in 2006, House and Senate Republicans passed a “postal reform” law requiring USPS, over a decade, to pre-fund its health benefits for the next 75 years.
The Republican-imposed pre-funding requirement, which postal unions never asked for, has proven to be less a booster shot than a kiss of death. No health plan, public or private, operates under such an extreme mandate – and no government or business program is required to be fully funded 75 years ahead of time in order to be considered solvent. Republican demands to lay off 100,000 workers now so that pensions are funded for 75 years is just as cruel a joke as insisting on throwing millions of Americans off of Social Security now to improve its financial outlook for 2086.
Guffey says the bill “was designed to destroy the post office…if they hadn’t had that burden, the post office would be in the black.” Rubio argues that the bill was well-intentioned, pointing to its prominent Democratic co-sponsors. But he agrees that “it put the post office in a bad way.”
The cost of pre-funding to the Postal Service over the past four years exceeded $20 billion, the full amount of USPS losses over that time. Labor (four unions, of which APWU is the largest) and management (the Postmaster General) agree that the 75-year requirement is unreasonable, especially in a recession, and should be curtailed.
If the extreme healthcare pre-funding mandate stays in place, postal workers say it should be paid down using excess payments to their pension fund. Postal workers are among the declining number of Americans with a defined-benefit pension plan, a benefit that used to be common in the private sector. Postal workers have fought to maintain their pension, a guaranteed income every month until death. The recession-induced tailspin of many 401(k)s has proven again the importance of pensions to real retirement security. But the Inspector General determined that the Postal Service overpaid $50 to $120 billion into the fund - money labor and management agree should be allowed to be redirected to pay the healthcare obligation.
Either of these solutions would address the Postal Service’s short-term budget problem, but neither can happen unless Congressional Republicans drop their opposition. Does that sound like running the government more like a business?
In a feat of goalpost-moving, Issa last year described any change to the 75-year mandate from 2006 as “Allowing USPS to postpone billions in obligations,” which “just makes a bailout easier.”
To be fair, there is a way in which Republicans’ designs on the Postal Service will make it more like the rest of the economy: just as Republicans are insisting in statehouses across the country, it will make good public sector jobs fewer and worse.
3. Republicans are Messing with Small Towns
Democrats, we’re often told, look down on small-town people and small-town values, while Republicans are the candidates of Norman Rockwell paintings. But Republicans are trying to airbrush post offices out of the picture. The austerity agenda Republicans are insisting on for the Postal Service would shutter post offices in small towns throughout the United States. “The post office is where the flag flies in America,” says Guffey. It’s the only government building in some places in the United States. In February the Washington Post interviewed residents of Star Tannery, VA, one of the small towns whose post office USPS has said could land on the chopping block. “Closing the post office would be one step toward eradicating small-town life in America,” said one resident. Another told the Post, “We’d lose our identity.”
USPS is often urged to remake itself in the image of FedEx or UPS, but neither of those companies is bound by a mandate to serve every American. They don’t have to go places where it won’t be profitable – and indeed, some of the packages you ship through FedEx or UPS are actually delivered by the Postal Service, because it costs the private companies less to pay USPS to go to far-flung places than to do it themselves. Like providing health insurance to cancer survivors, delivering mail to remote towns is not a service private companies would rush to affordably provide if only government would get out of the way. “If we had private handlers handling our mail, we would be subject to gouging or non-delivery,” warns Rubio, a former letter carrier and the author of a book on the Postal Service. He points to the experiences of Finland, Argentina and New Zealand as examples.
The Postal Regulatory Commission has also called for additional research into the negative impact on rural areas if USPS, seeking savings to stay afloat, goes through with management proposals to cut down to five-day service. Many of the nearly 4,000 post offices proposed for elimination are in small towns – and small-town jobs would be eliminated with them.
Guffey notes that while USPS has been hurt by a long-term decline in snail mail, it’s also a victim of the recession, which has reduced mail advertising spending by decimating consumers’ disposable income.
If our politics were different, maybe we’d be debating how much the government should subsidize the public good of universal mail delivery, or – given persistent unemployment – how many additional postal workers the government should hire to stimulate growth. Instead, we’re debating whether Congress, which doesn’t subsidize the Postal Service a cent, should insist on closing a slew of post offices – and how many postal workers should lose their jobs.
USPS’ four unions -- APWU, the National Association of Letter Carriers, the National Postal Mailhandlers, and the National Rural Letter Carriers -- along with an association of managers, are planning a national mobilization September 27. They’ve called on workers and supporters in every congressional district to send a message to their representatives on recess in support of Rep. Stephen Lynch’s (D-MA) bill to allow postal overpayments to be directed toward the future pension obligations.
“The Postal Service and its employees don’t want a taxpayer bailout,” the unions write on a joint website. “What we do want is the freedom to use our own surplus pension funds to pay down the pre-funding obligation. But this can only happen if Congress changes the current law.”
Rubio says “the current crisis, which really is a manufactured crisis” represents a prime opportunity for right-wing groups that have wanted to bring down the Postal Service for decades. If given the chance, he warns, they’ll let private companies “pick apart the profitable parts of the post office and leave the rest. This is their magic moment.”