WASHINGTON -- Postal workers and their supporters plan to rally in congressional districts across the country Tuesday afternoon, hoping to convince their representatives that cuts being considered to the U.S. Postal Service's system and workforce are unnecessary and counterproductive.
So far, their argument has been drowned out amidst grave declarations of a financial crisis at the agency. Earlier this month, the postmaster general warned Congress of a looming default and eventual bankruptcy; a government accountability official declared the postal service's business model "broken"; and even President Obama, in his recent $3 trillion deficit-reduction plan, said the postal service should be allowed to eliminate Saturday delivery in order to save itself. The agency is projected to post a $10 billion loss this year.
But Fredric Rolando, president of the National Association of Letter Carriers (NALC), one of a handful of unions spearheading the rallies Tuesday, said his group has been trying to combat what he describes as misinformation surrounding the postal service's real financial status. He said that large-scale cuts to the system -- including the possible closings of lower-volume post offices -- are not imperative, and could actually end up hurting the service in the long run.
"It's a choice, not a necessity," Rolando said. "Someone is choosing to take our communications system apart. ... That's what you're seeing discussed -- the reduction of delivery days, the reduction in service standards, the consolidation of processing plants. It's just a dismantling of the service as we know it."
Rolando said the postal service's main problem is that, over the past four years, the agency has had to prefund health-benefit premiums for future retirees to the tune of about $21 billion. That amount, he notes, roughly matches the $20 billion net loss the agency has run up over the same time period. The prefunding condition is unusual and comes courtesy of a 2006 law passed by Congress, which requires the postal service to pay 75 years' worth of benefits in just a decade.
According to testimony earlier this year from Ruth Goldway, chairman of the Postal Regulatory Commission (PRC), the independent regulatory agency overseeing the postal service, "Without the [prefunding] requirement, the Postal Service would have broken even financially despite the large mail volume declines that occurred during that time and without use of its borrowing authority." Goldway also noted that the ambitious benefit payment plan was made at a time when the agency was "exceedingly profitable."
But the agency's red ink, coupled with the declining mail volumes of the Internet era, have lawmakers on both sides of the aisle calling for cost-cutting and reform. The sudden imperative to streamline the agency -- perhaps permanently -- worries postal service advocates like Ralph Nader. The consumer activist and frequent presidential candidate believes the postal service's fiscal problems are being overstated by privatization boosters. He, too, thinks cuts wouldn't be on the table right now if not for the mandatory payments into the health fund, a stipulation that Congress could undo with legislation. He told HuffPost that the crisis being discussed on the Hill is "manufactured."
"The postal service has never had fewer champions in Congress," Nader said. "The post office is being pushed to the cliff, into the abyss. The ultimate goal is shrinkage -- continual shrinkage and private businesses pick up the cream."
In a letter to Congress last week, Nader said that reduced services coupled with higher postage rates would be "suicidal." Like Rolando, he argues that eliminating Saturday delivery to save money will end up diminishing the postal service's customer base, thereby accelerating a decline rather than preventing one. He also says the postal service has already been trimming and realigning its workforce through attrition, having shed around 100,000 workers in the past few years.
The exact savings that would come from switching to five-day delivery aren't clear. The postal service itself pegged the potential savings at around $3 billion annually, but the regulatory commission put the number closer to $1.7 billion, according to Mark Acton, committee vice chairman.
"That's still a lot of money," said Acton. "It's the single most lucrative one-stop opportunity for cutting costs in a drastic way."
Unlike Nader, Acton believes the crisis talk is healthy.
"If you travel in the postal community, then you would have known this moment was brewing for months and years," Acton said. "The only way we would eventually reach the point of critical mass where Congress would be motivated and develop a new approach would be when a crisis was upon us."
Acton said lawmakers fortunately have a "full plate of options" when it comes to taking cost-cutting measures. That includes short-term possibilities, including the return to the agency of $6.9 billion in overpayments to a retiree pension fund, as well as the more controversial long-term possibilities, such as the closing of rural post offices and the shedding of employees currently protected by no-layoff clauses. Any such actions would require legislation from Congress.
One piece of legislation that has wide support among workers rallying Tuesday is a House bill that would free up the pension overpayments, allowing the money to be put toward other obligations. The bill would not change the payments made to the health-benefit fund.
A far more aggressive bill has been pushed by House Oversight Committee Chairman Rep. Darrell Issa (R-Cal.). Issa’s legislation would allow the postal service to renegotiate its collective-bargaining agreements, helping the agency pursue more than 200,000 layoffs that Postmaster General Patrick Donahoe has said it needs. The bill would also give the agency more power to shut down its distribution centers and post offices.
Rolando said postal workers will be visiting the home offices of lawmakers on Tuesday to urge a much more modest action -- the return of the pension overpayments. Issa’s plan and others like it, he maintains, would simply put the postal service on a path toward privatization.
"This is the only universal communications network this country has," said Rolando. "To start taking it away is absolutely ridiculous."