Sunday, February 10, 2013

Sat. Postal Service on the Chopping Block

Saying the move would save $2 billion and lessen red ink, Postmaster General Patrick Donahue announced Wednesday the Postal Service will kill virtually all Saturday service – pickups and deliveries – six months from now. Only parcel deliveries would remain, and some post offices would stay open on Saturdays.

Donahue portrayed his move as one supported by public opinion polls, postal customers, Congress and even workers whom he claims to have consulted. He also said he would work with postal unions on further cost-cutting moves.

But aides to National Association of Letter Carriers President Fredric Rolando said he was informed, not consulted, by Donahue before the public announcement – a point Donahue conceded. And two key lawmakers Donahue portrayed as agreeing with his cut, Sen. Thomas Carper, D-Del., and Rep. Elijah Cummings, D-Md., said that’s wrong.

The three postal unions, the Letter Carriers, Mail Handlers and the American Postal Workers Union, blasted Donahue’s design. Rolando noted Congress has backed six-day delivery for decades. He said if Donahue has no alternative to an end-run around lawmakers, Donahue should quit.

Donahue’s “disastrous idea would have a profoundly negative effect on the Postal Service and on millions of customers,” Rolando said. “Slowing mail service and degrading our unmatchable last-mile delivery network are not the answers to the Postal Service’s financial problems.

“If the Postmaster General is unwilling or unable to develop a smart growth strategy that serves the nearly 50% of business mailers that want to keep six-day service, and if he arrogantly thinks he is above the law or has the right to decide policy matters that should be left to Congress, it is time for him to step down.”

The Mail Handlers called killing Saturday delivery “a serious blunder” that “would eliminate a key component of the Postal Service’s longstanding mail network and service to the American people. Instead of cutting service, the USPS should be emphasizing, and capitalizing on Saturday delivery to grow the business.”

Postal Workers President Cliff Guffey called the end of Saturday delivery “a step towards privatization” of the Postal Service. His union plans a lobby week on that and other issues Feb. 18-22.

The cut in Saturday pickup and delivery, except for parcels, would mean that a first-class letter mailed Friday and now scheduled to reach a nearby city on Saturday would instead get there on Monday. And since USPS has closed 100 sorting centers nationwide and plans to close 100 more, other delivery times could lengthen.

The practical impact of ending Saturday service would be to save approximately 45 million worker hours per year, the USPS chief said. That’s the equivalent of 22,500 fewer full-time jobs.

But Donahue ducked the question of whether 22,500 workers would actually lose their jobs. Instead, he said the savings would come because USPS would have to pay less overtime to its current 600,000 workers.

About 12% of USPS annual personnel costs go for overtime, he said. He admitted USPS uses overtime to cover its routes, instead of hiring new full-time workers. He said it also gets by with part-timers at lower pay -- $14-$16 hourly -- with no benefits.

Donahue explained USPS attorneys told him federal law right now lets him shut down Saturday service, where before it did not. Every year, Congress pays the Postal Service for the prior year’s expense for sending congressional mail for “free.” The legislation also mandated continuing six-day-a-week service.

But the temporary money bill that keeps the government going through March 27 does not have the six-day-a-week mandate – and Donahue spent much of his press conference denying he was taking advantage of a “loophole” in the law to cut service.

“If there is any disagreement, let’s get that resolved,” he repeatedly said.

The shutdown of Saturday service is needed, Donahue said, because USPS officially ran a $15.9 billion deficit last year and virtually exhausted its line of credit with the U.S. Treasury last October. Cash flow is better now, he acknowledged, but gave no figures. He also put the deficit at closer to $20 billion.

He also said most of the red ink is from $11.1 billion USPS owes in pre-funding future retirees’ health care costs. Donahue claims he is lobbying Congress to modify – not eliminate -- that requirement, along with $5.5 billion more it will owe this year. Postal unions have lobbied long and hard for eliminating the health care payments, saying the USPS health care plan is fully funded to cover future costs. 

> The article above was written by Mark Gruenberg of the Press Associates, Inc.  It is reprinted from the Workday Minnesota website.

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