Currently viewing the tag: "Postal"

By Tad DeHaven

The U.S. Postal Service is in financial trouble. Undermined by advances in electronic communication, weighed down by excessive labor costs and operationally straitjacketed by Congress, the government’s mail monopoly is running on fumes and faces large unfunded liabilities. Socialism apparently has its limits.

While the Europeans continue to shift away from government-run postal monopolies toward market liberalization, policymakers in the United States still have their heads stuck in the twentieth century. That means looking for an easy way out, which in Washington usually means a bailout.

Self-interested parties – including the postal unions, mailers, and postal management – have coalesced around the notion that the U.S. Treasury owes the USPS somewhere around $ 50-$ 75 billion. (Of course, “U.S. Treasury” is just another word for “taxpayers.”)  Policymakers with responsibility for overseeing the USPS have introduced legislation that would require the Treasury to credit it with the money.

Explaining the background and validity of this claim is very complicated. Fortunately, Michael Schuyler, a seasoned expert on the USPS for the Institute for Research on the Economics of Taxation, has produced such a paper.

At issue is whether the USPS “unfairly” overpaid on pension obligations for particular employees under the long defunct Civil Service Retirement System. The USPS’s inspector-general has concluded that the USPS is owed the money. The Office of Personnel Management, which administers the pensions of federal government employees, and its inspector-general have concluded otherwise. Again, it’s complicated and Schuyler’s paper should be read to understand the ins and outs.

Therefore, I’ll simply conclude with Schuyler’s take on what the transfer would mean for taxpayers:

Given the frighteningly large federal deficit and the mushrooming federal debt, a $ 50-$ 75 billion credit to the Postal Service and debit to the U.S. Treasury will be a difficult sell, politically and economically. Although some advocates of a $ 50-$ 70 billion transfer assert it would be “an internal transfer of surplus pension funds” that would allow the Postal Service to fund promised retiree health benefits “at no cost to taxpayers,” the reality is that the transfer would shift more obligations to Treasury, which would increase the already heavy burden on taxpayers, who ultimately pay Treasury’s bills. (The Congressional Budget Office (CBO) prepares the official cost estimates for bills before Congress. Judging by how it has scored some earlier postal bills, CBO would undoubtedly report that the transfer would increase the federal budget deficit.) For those attempting to reduce the federal deficit, the transfer would be a $ 50-$ 70 billion setback.

Sounds like a bailout to me.

See this Cato essay for more on the U.S. Postal Service and why policymakers should be moving toward privatization.

Bailout Coming for the Postal Service? is a post from Cato @ Liberty - Cato Institute Blog


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When Republicans across the country are attacking the right of public employees to bargain, the Postal Workers (APWU) and the U. S. Postal Service (USPS) today showed that public employees and government can work together to solve financial problems and provide good service. The two sides have reached a tentative agreement on a new contract, which APWU President Cliff Guffey says is “a win-win proposition” for both parties.

In a video to members, Guffey said:

When workers across the country are fighting to protect their right to collective bargaining, our tentative agreement is a testament to a great American freedom: the right of workers to have a voice at work and to negotiate for a better life.  

With the USPS in financial trouble, Guffey said negotiators had to be creative to fashion a fair contract. The tentative new agreement, which will expire on May 20, 2015, will safeguard jobs, protect retirement and healthcare benefits, and provide a 3.5 percent wage increase over the life of the contract. The first raise will be in November 2012, Guffey said.

 “Avoiding layoffs was a top priority,” Guffey said, noting that more than 100,000 postal jobs have been eliminated in the last three years.

The contract also includes provisions that will return to postal employees a significant amount of work that had been outsourced or assigned to managerial personnel. Guffey said:

This will strengthen job security for our members while it saves the Postal Service money.

 There will be no changes to the healthcare benefits of APWU members in 2012. Each year from 2013 through 2016 there will be a slight shift in employees’ share of contributions toward healthcare coverage. This will amount to an increase of several dollars per pay period each year.

AFL-CIO NOW BLOG

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When Republicans across the country are attacking the right of public employees to bargain, the Postal Workers (APWU) and the U. S. Postal Service (USPS) today showed that public employees and government can work together to solve financial problems and provide good service. The two sides have reached a tentative agreement on a new contract, which APWU President Cliff Guffey says is “a win-win proposition” for both parties.

In a video to members, Guffey said:

When workers across the country are fighting to protect their right to collective bargaining, our tentative agreement is a testament to a great American freedom: the right of workers to have a voice at work and to negotiate for a better life.  

With the USPS in financial trouble, Guffey said negotiators had to be creative to fashion a fair contract. The tentative new agreement, which will expire on May 20, 2015, will safeguard jobs, protect retirement and healthcare benefits, and provide a 3.5 percent wage increase over the life of the contract. The first raise will be in November 2012, Guffey said.

 “Avoiding layoffs was a top priority,” Guffey said, noting that more than 100,000 postal jobs have been eliminated in the last three years.

The contract also includes provisions that will return to postal employees a significant amount of work that had been outsourced or assigned to managerial personnel. Guffey said:

This will strengthen job security for our members while it saves the Postal Service money.

 There will be no changes to the healthcare benefits of APWU members in 2012. Each year from 2013 through 2016 there will be a slight shift in employees’ share of contributions toward healthcare coverage. This will amount to an increase of several dollars per pay period each year.

AFL-CIO NOW BLOG

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One Postal Service employee used his government travel card at adult entertainment establishments more than 50 times. Another paid for an Apple computer and his mortgage. Three others purchased airfare tickets (including tickets to Spain and Italy) for family and friends.

That’s all according to a Postal Service Inspector General report issued last week on non-compliance with travel policies.

The report said that Postal Service employees “did not comply with prescribed travel policies resulting in over $ 600,000 in excessive travel costs for lodging and airfare in FYs 2009 and 2010.” If the Postal Service took action to “curtail employee noncompliance with travel polices” it could “realize an additional $ 600,000 in savings over the next 2 years, or $ 300,000 annually.”

According to the report, the Postal Service “did not cancel 2,491 credit cards issued to former employees, including 53 employees listed as deceased in employee records. At the time of our audit, there was more than $ 37 million in open credit associated with cards of former employees.”

It’s poor timing for the Postal Service, which is planning to cut about $ 2 billion in costs this year but still forecasts a $ 7 billion loss after losing a record $ 8.5 billion in fiscal 2010, according to the Washington Post. The Postal Service also warned this week that it is most likely going to run out of money by the end of the fiscal year.

Lawmakers are paying attention to the abuses, according to the Washington Post.

“It is very frustrating that an organization that was $ 8.5 billion in the hole last year, has not adopted a frugal culture,” Sen. Susan Collins (R-Maine) said. “The proper controls are not in place to either prevent or uncover frequent credit card abuses.”

Sen. Thomas R. Carper (D-Del.) said in a statement that he’d “told the new postmaster general and his predecessor that he and other top postal executives need to do their part as well.”

“If they are going to ask postal employees and customers to make sacrifices to save the Postal Service, then the postal leadership certainly has a responsibility to set a good example when it comes to frugality and basic financial management,” Carper said. “In this case, they have clearly failed.”









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Bleeding hundreds of millions a year.
American Thinker Blog

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Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.

Derived from a quote from Herodotus’ Histories (8.98), that phrase is inscribed on the James A. Farley Post Office building, the main post office building in New York City. The building is a McKim, Mead & White masterpiece and a totem to another time.

I live in rural Georgia. You may have heard we had an unusual snow storm here in the South this week. Georgia is home to U.P.S. We are waiting for them to deliver a Christmas package. Every day the tracking reports “weather delays.”

Understandable?

Maybe.

We had two snow days. Housebound, we wondered would our Netflix delivery make it through. We’re on the 1 DVD out at-a-time Netflix plan. Through the storm they have continued delivery, unabated and un-delayed. I put a DVD in the mail Sunday; they received it Monday; I got the new one Tuesday. I put the return DVD in the mail yesterday; they got it today; I’ll have my new one tomorrow.

UPS update this morning? “Weather delays.” [Update: "Out for delivery today."]

FedEx doesn’t even bother competing in our town. Recently when we were sent a package via FedEx, they left a voice message saying they couldn’t find our house. We suggested they try Google Maps. Our house and driveway are pictured in Street View. It turned out they had the package on the wrong truck. Something about a sticker error.

I’ve always been a fan of the U.S. Postal Service. I can match complaints about their service one-for-one with complaints about the private enterprise people. The postman puts our packages on our porch or under the eaves; UPS leaves the truck parked on the street, runs up the hill and lets the package on the step out in the rain. Our postman waves, the UPS man grunts.

Sadly, mine is apparently a minority opinion.

The U.S. Postal Service is fast approaching bankruptcy. I don’t expect the Congress to bail them out. Or data gathering sensors to save them. Privatization of public services has never worked out for me. I’d rather see subsidized broadband but that one will never happen. Polls like this one will provide cover for reduced services and a continuing spiral down.

I don’t know why Netflix chose the U.S. Postal Service to deliver its movies. But I’m glad they did.


The Moderate Voice

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Postal workers agree to third contract extension as bargaining continues, and more news from the “Bargaining Digest Weekly.” The AFL-CIO Collective Bargaining Department delivers daily, bargaining-related news and research resources to more than 1,300 subscribers. Union leaders can register for this service through our website, [email protected].

NEGOTIATIONS
APWU, U.S. Postal Service: The Postal Workers (APWU) and the U.S. Postal Service agreed to a third contract extension, as negotiations continue. If the two sides are unable to reach agreement within 60 days of the contract’s expiration date, they will enter binding arbitration as required by the 1970 Postal Reorganization Act.

AFT, Bethel Park School District: Some 400 teachers in Bethel Park, Pa., are returning to the classrooms today as mandated by state law, after a six-week strike but no agreement. The Bethel Park Federation of Teachers/AFT and the school district will now enter binding arbitration.

WORK STOPPAGES
BCTGM, Roquette America: In Keokuk, Iowa, Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) Local 48G highlighted the 4.5 million city and state dollars Roquette America has received over the years, as the company’s lockout of 240 workers entered its third month. The workers were locked out Sept. 28, after they rejected a contract Local 48G President Steve Underwood described as “so offensive that no self-respecting employee would accept.”

USW, Honeywell: The United Steelworkers (USW) attended a hearing of the National Commission on Fiscal Responsibility and Reform in recent days to shine a spotlight on the lockout of 230 workers by one of the commission’s members, Honeywell CEO David Cote. Members of USW Local 7-669 were locked out of the Honeywell uranium plant in Metropolis, Ill., in June, after rejecting a deal that would slash health and pension benefits. Local 7-669 President Darrell Lillie said at the hearing, “We think it’s a joke that our CEO can serve on the fiscal commission while he has locked us out, hired hundreds of replacement workers to steal our jobs and now seeks to eliminate our pension plan.”

SETTLEMENTS
IAM, Pratt & Whitney: In Connecticut over the weekend, members of the Machinists (IAM) ratified a new contract with Pratt & Whitney that will allow the closure of two engine repair plants in the state while preventing the layoff of the 3,400 workers. Up to 500 workers can accept an early retirement package, while others will be offered jobs at other Pratt & Whitney locations.

UFCW, Multiple supermarket chains: Grocery workers in the Puget Sound area of Washington State ratified a new agreement with supermarket chains Safeway, QFC, Fred Meyer and Albertsons. The majority of workers are members of United Food and Commercial Workers (UFCW) Local 21, and others are represented by UFCW Local 81 and Teamsters (IBT) Local 38.

Disclaimer: This information is being provided for your information only.  As it is compiled from published news reports, not from individual unions, we cannot vouch for either its completeness or accuracy; readers who desire further information should directly contact the union involved.

AFL-CIO NOW BLOG

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By Tad DeHaven

The U.S. Postal service has announced a net loss of $ 8.5 billion for fiscal 2010. Since 2006, the USPS has lost $ 20 billion, and the organization is close to maxing out its $ 15 billion line of credit with the U.S. Treasury. Although the USPS has achieved some cost savings, they haven’t been enough to overcome a large drop in revenue due to the recession and the greater use of electronic alternatives by the public.

The USPS is required to make substantial annual payments to pre-fund retiree health care benefits. Last year, Congress allowed the USPS to postpone $ 4 billion of its fiscal 2009 into the future. However, Congress did not provide similar relief on this year’s required payment of $ 5.5 billion.

Critics of the retiree health care pre-funding requirement argue that no other federal agencies or private companies face such obligations. The argument is largely irrelevant for two reasons. First, the federal government’s financial practices are nothing to emulate. Second, very few private sector workers even receive retiree health care benefits.

In 2008, only 17 percent of private sector workers were employed at a business that offered health benefits to Medicare-eligible retirees, down from 28 percent in 1997. The actual number of private sector workers receiving these benefits is even lower as not all employees employed at the 17 percent of businesses that offers retiree health benefits are eligible to receive them.

The retiree health care benefit pre-funding requirement has become a rallying cry for the postal unions, as any threat to USPS solvency is a threat to the excessive compensation and benefits they’ve been able to extract from the postal service for their membership over the years.

Policymakers should properly view the retiree health care benefit as a symbol of postal labor excess, which continues to weigh the USPS down like an anchor. Therefore, they should avoid allowing the USPS to further postpone these payments into the future, which could lead to a taxpayer bailout. Instead, policymakers should recognize that the USPS’s financial woes require bolder action: privatization.

Postal Service Announces $ 8.5 Billion Loss is a post from Cato @ Liberty - Cato Institute Blog


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Yesterday came news that the US Postal Service lost $ 8.5 billion last year.

Now imagine if this was a private business. Wouldn’t this venture be bankrupt already? Instead we are funneling money to this endless pit.

Why so much money lost? Unions of course. Time to go the route of British, yes the British, and privatize the mail service. We can no longer afford this.

Liberty Pundits Blog

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Sounds like an SNL skit but…

Election


The Moderate Voice

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This is what you call irony:

The American Postal Workers Union has extended its internal election after thousands of ballots appeared to have gotten lost . . . in the mail.

The union’s election committee was supposed to be counting those ballots this week in downtown Washington, D.C., following a tradition mail-in election. But the union announced that only about 39,000 ballots were turned in — and that “a large number of union members had not received their ballots.”

Perhaps they should’ve used FedEx




Outside the Beltway

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So much for the quality of union workers:

The American Postal Workers Union has extended its internal election after thousands of ballots got lost . . . in the mail.

Federal News Radio reports that the union’s election committee was supposed to be counting those ballots this week in downtown Washington, D.C., but that only about 39,000 — a fraction of the membership — have been received. The union traditionally uses mail-in voting to elect national officers, but something went wrong this year.

Many members said they never got their ballots.

These people suck at everything.

Liberty Pundits Blog

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Sweetheart deals and anti-competitive practices.
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By Tad DeHaven

The U.S. Postal Service is in a lurch after Congress wrapped up business until November without giving the USPS a break on a $ 5.5 billion retiree health benefits payment that’s due tomorrow. Combined with an expected loss in the billions of dollars, the USPS could run out of money in October.

In addition, the USPS’s regulator today rejected the USPS’s request for an exigent postal rate increase. The Postal Regulatory Commission acknowledged that the recession has led to a substantial decline in mail volume. However, the PRC rejected the request because the rate adjustments “represent an attempt to address long-term structural problems not caused by the recent recession.”

The PRC singled out “an overly ambitious requirement for the Postal Service to prefund its future retiree health benefit premiums.” The prefunding requirement stems from a 2006 law that sought to address unfunded obligations for retiree health benefits. Last year, Congress agreed to reduce the USPS’s 2009 payment by $ 4 billion in order to help it keep its head above water.

Congress did not provide such relief this year, which some members of Congress have inappropriately criticized as being a “taxpayer bailout.” However, allowing the USPS to defer its obligations only increases the possibility that future taxpayers could be on the hook. Therefore, policymakers who are critical of giving the USPS another break are correct when they state that the government mail monopoly needs to be substantially reformed.

The PRC’s rejection of the rate increase request points to the problem with the government trying to run a business. If UPS or FedEx had to ask a federal regulatory body for permission to raise prices for their services, it’s unlikely that either would survive.

As I’ve previously discussed, the USPS is currently trying to get Congress’s blessing to eliminate Saturday service. While it’s ridiculous that the American people are forced to use a government monopoly that wants to raise prices while simultaneously degrading services, having to get Congress’s approval to alter delivery schedules is a serious problem for a commercial operation.

Postal management has succeeded in cutting costs, but still lacks the necessary flexibility that a private firm would possess. For instance, if the USPS wants to close post offices, it has to jump through numerous regulatory and congressional hoops. Last year, for example, the USPS proposed consolidating 3,000 postal outlets, but following a congressional outcry, the number under consideration was reduced to a paltry 157.

While the USPS has been able to eliminate a substantial number of employees through attrition, the USPS’s predominantly unionized workforce continues to account for 80 percent its costs. When weighing a decision on postal union contracts, arbitrators are not allowed to take the USPS’s financial situation into consideration. In addition to extracting benefits that are generous even by federal employee standards, inflexible union contracts also make it difficult for the USPS to efficiently manage its workforce.

Beyond the nostalgic depictions of the USPS being a “national asset” that “binds the nation together” is the unglamorous fact that it provides a service just like millions of other commercial outfits. Electronic communication and other technological advances are making the USPS’s mail monopoly increasingly irrelevant. Instead of haggling over six-day mail delivery and retiree health benefit prefunding formulas, Congress should start focusing its attention on getting the government out of the mail business once and for all.

Postal Service’s Financial Woes is a post from Cato @ Liberty - Cato Institute Blog


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After ACORN’s demise, you might have thought that if if the GOP takes the House and Rep. Darrell Issa becomes the new chair of the Oversight and Government Reform Committee, the California Republican would have better things to worry about. You’d be wrong.

Last week, Issa issued a blueprint for his agenda titled “A Constitutional Obligation: Congressional Oversight of the Executive Branch.” Among the issues he chastised the Democratic leadership for not addressing: the fraud he says was committed by the community organizing group ACORN.

A spokesman for Issa said that ACORN had already been addressed in a bipartisan way in Congress, but left open the possibility that Issa could address the “other entities that ACORN morphed into.” The Inspector General for the Department of Housing and Urban Development addressed such a group in a report issued at Issa’s request last week.

Some media coverage has indicated that Issa plans to go subpoena crazy. House Majority Whip James Clyburn (D-SC) even said that Issa would be “issuing subpoenas everywhere” which he said “will define the next two years of the president’s administration. The White House will be full-time responding to subpoenas about where the president may or may not have been born, whether his mother and father were ever married, and whether his wife’s family is from Georgetown or Sampit.”

But according to spokesman Kurt Bardella, that’s not true.

“Despite what some Democrats say - the notion that we’re prepared to embark on an epic subpoena-led politically-motivated investigatory effort is just wrong and nothing Issa has said even hints at that,” Bardella told TPMMuckraker in an e-mail.

Bardella specifically criticized Clyburn, who he said lied that Issa would make President Obama’s birthplace a topic for the committee.

“Where he got that impression is beyond me, maybe it was from a sock-puppet but Darrell has NEVER even hinted that that was something he was interested in — it’s not — it’s a moot issue as Congress voted without any opposing vote on language that recognized that the President was born in Hawaii,” Bardella said. “That’s a legally binding resolution. How could he investigate something he acknowledged wasn’t an issue - he voted for the resolution.”

Issues Issa would address range from the more serious — like giving Inspector Generals subpoena power — to what critics say are the less-so-serious issues, like investigating the “Climate-Gate” controversy.

Bardella emphasized that issues like the FDA’s effectiveness (“especially in light of the salmonella outbreak and the Johnson & Johnson recalls”), Fannie Mae’s and Freddie Mac’s roles in the sub-prime crisis, health care reform (“Not repealing it, that’s not our job or jurisdiction but rather the implementation of it”), data transparency and postal reform would all be on the docket if Issa were in control of the committee.

“The unparalleled encroachment of the federal government in the private sector and the lives of individual Americans that began during the Bush Administration and continues in the Obama Administration… has led to concerns of an oncoming tsunami of opacity, waste, fraud, and abuse,” Issa’s report says. “This trend must be met by vigorous Congressional oversight of the massive federal bureaucracy.”

“A Constitutional Obligation: Congressional Oversight of the Executive Branch” is embedded below.

Committee Oversight Gov Reform Doc









Darrell Issa - United States House Committee on Oversight and Government Reform - Republican - United States - White House


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