Appointed rounds

In 2003, the Bush Administration's blue-ribbon commission to study the United States Postal Service issued a list of recommendations for addressing that organization's chronic problems.  According to the National Association of Letter Carriers (the Postal Service union), the commission pushed several "anti-labor" initiatives, including limitations on collective bargaining rights, erosion of pension and health benefits, and a three-day wait for "continuation of pay" benefits for injured workers.

In 2007, the NALC triumphantly announced that both the House and the Senate had passed a bill by voice vote, signed promptly into law by President Bush in late 2006, that vindicated the NALC's position on every important issue except one:  a compromise had to be reached on the three-day day in injured-worker benefits.  The NALC crowed that it had beaten back the forces of privatization in favor of a vision for modernizing the Postal Service.  The new law, its president said, “preserves our collective bargaining rights, maintains universal, six-day delivery and significantly improves the Service’s long-term financial stability.”

The reference to long-term financial stability apparently concerned squabbles over the Postal Service's funding of pension and retiree health benefits obligations.  In 2003, a pension funding reform initiative had required the establishment of an escrow account.  What's more, the Postal Service objected to Bush administration demands that it cover $27 billion in military pension benefits that had been earned by veterans before they joined the Postal Service.  The 2006 bill gave the Postal Service some flexibility to use part of the retiree-health-benefit escrow account to cover operating expenses, while removing the obligation to fund the military benefits.  Instead, the union "prevailed over the White House" in establishing

a 10-year schedule for using the escrow and military pension savings to dramatically reduce the Postal Service’s massive unfunded liability for retiree health insurance, while also providing some flexibility for other uses. 

In so doing, we secured more than $100 billion for the Postal Service in the decades to come and protected the interests of our current and future retirees, whose health benefits will be fully funded.

Today, the Postal Service is facing a financial crisis and once again beating back the inexorable forces of privatization.  Anti-privatizers suddenly are filling the Net with articles explaining that the Postal Service would be doing fine financially if not for a ridiculous obligation imposed by the dreaded Bush administration in 2006, unfairly requiring it to pre-pay 75 years' worth of retiree health benefits over only 10 years, a burden of about $6 billion of year.  Absent this requirement, they claim, the Postal Service could easily meet its operating expenses.  In addition, although the Postal Service may be in arrears on its obligations to fund future retiree health benefits, it claims to have overfunded its ordinary pension fund, and would like to raid that overage to cover its current shortfalls, a tactic they clearly learned from Bain Capital.

While the wires are burning up with arguments over whether the Postal Service should be privatized, there are the usual quarrels over whether the Constitution requires a postal service (it certainly authorizes one, but I have to laugh at this uncharacteristic originalist fervor), as well as over whether the Postal Service should continue to enjoy a monopoly on non-urgent ordinary letters (competition is allowed only for express service and packages), and over whether the Postal Service still provides a useful service at a reasonable price.  Some supporters go beyond these arguments to the now-familiar complaint that operational reforms would threaten the jobs of deserving middle-class workers, especially minorities.  Some even argue that closing down a number of stand-alone post offices (perhaps replacing many of them with kiosks within big-box stores) would threaten a vital community-gathering spot, as if communities could not figure out how to gather without federal intervention.

European countries are experimenting more freely with postal service modernization.  The Swiss, for instance, scan mail and offer the recipient a choice of e-transmission or physical delivery of a hard copy.  So much volume has been lost in the U.S. to electronic media that the Postal Service now finds itself relying increasingly on high-volume junk mail to make ends meet.   Even there, pro-labor forces find fault:  large companies like FedEx bring in significant revenue by pre-sorting bulk mail and winning a discount from the Postal Service in the amount it would have cost to sort the mail in-house at union rates; FedEx then does it more cheaply with minimum-wage workers.  The Postal Service finds itself increasingly entangled with FedEx, which has taken over the Postal Service's overnight mail operations for a fee, but in return has contracted with the Postal Service for the final leg of deliveries of many consumer packages.

Recent efforts in Congress to break up this mess have been stalled by opposition either to the closing of rural offices, or to the lay-offs of workers, or even (allegedly) by Congressman who would prefer to induce gridlock so that privatization will be the only answer.  The various interest groups certainly seem to be at cross-purposes.  I'm not sure whether the Postal Service should be abolished, but I sure can't see any reason why its monopoly on ordinary mail should be preserved.  Until that happens, how can we reach any sensible conclusions about whether its product is worth its price?