Another Biased Report Calls for Privatizing Mail Processing

Greg Bell, Executive Vice President

Another conservative think tank has jumped on the “privatize everything but the last mile” bandwagon.

In a June 2013 report titled “Postal Reform for the Digital Age,” the Information Technology and Innovation Foundation (ITIF) offers a plan that “would preserve the USPS monopoly on ‘final mile’ delivery while opening up the collection, transport, sorting and processing of the mail to much greater competition.”  In other words, privatize all postal operations except delivery.

Where have we heard that before?

Earlier Privatizers’ Report

In January, a group of self-proclaimed “postal industry thought leaders” published a paper that advocates contracting out all postal functions except delivery — a plan that is often referred to as “the last mile strategy.”  The paper was titled “Restructuring the U.S. Postal Service: The Case for a Hybrid Public-Private Partnership.”  In coordination with the paper’s publication, the National Academy of Public Administration (NAPA), a congressionally chartered non-profit organization, announced that it was conducting an “independent” review of the proposal. 

In May, NAPA published its review of the proposal to privatize all postal operations except delivery and concluded the idea “merits serious consideration.”

The NAPA review didn’t quite endorse the proposal to privatize everything but delivery, but it gave a sense of legitimacy to the concept, which up to now has been dismissed as extreme.

The fact is the NAPA review was financed in part by a contribution from Pitney-Bowes, one of the largest pre-sort companies in the country. Pitney-Bowes owns more than 40 mail processing centers and stands to be a major beneficiary if mail processing operations are contracted out to the private sector.

Any postal study financed by those who stand to profit from privatization or dismantling of the Postal Service cannot be considered independent, neutral or credible.

Now a different group is promoting the same message, advocating the same privatization concept with a similar approach and same end game — to privatize a $65 billion per year public service agency in order to redirect that revenue to private industry.

Different Group, Same Objective

According to the June 2013 report, the USPS has lost nearly $30 billion in the last three fiscal years, due to the decline in first-class mail.

You have to read nearly halfway through the report to find any mention of the Postal Accountability and Enhancement Act (PAEA) and the fact that “Many groups, including the USPS, have argued that the [PAEA] unfairly forces USPS to overfund retirement benefits of current and future employees.”

The fact that no other private business or government agency is required to pre-fund healthcare benefits for future employees is omitted.

If the Postal Service is losing money in the face of declining volume, how do private profit-seeking businesses expect to make money?  The report is clear.  “Private sector work rules are demonstrably more flexible than those currently in place for Postal Service career employees.”  In addition, the report says, “Some of the savings would also come from paying private sector wages and salaries, which are lower than USPS salaries.” 

You might wonder, “What about our contract and our no-layoff clause?” No problem, according to the report.  Congress simply needs to “give USPS the authority to close post offices, sorting facilities and other facilities, to layoff postal workers, and to choose how many days a week to deliver mail.” The Postal Service should give employees notice “and some reasonable severance pay, but it should avoid generous early retirement packages as these make it harder to cut costs,” it says.

Who’s Bailing Out Who?

The report ominously warns that, “Many defenders of USPS, including some mailers, the paper and letter industry, and the postal unions want taxpayers to bailout the USPS.”

Where have we heard that before? From an honorary co-chair of the “think tank,” Rep. Darrell Issa.

Rep.  Issa has been promoting the myth that the Postal Service is seeking a taxpayer bailout ever since he took over as Chairman of the House Government Reform and Oversight Committee and began drafting his version of postal reform legislation. He even suggests that the USPS is funded by taxpayers.

In fact, the U.S. Treasury recently raided federal and postal employees’ retirement funds, borrowing money to prevent the federal government from defaulting on the national debt.

However, the Postal Service has overpaid billions of dollars into these accounts, but government has refused to return the surplus — even while the USPS is closing post offices and mail sorting facilities, reducing services and delaying mail.  

The Treasury also borrowed from the pre-funding account that is pushing the Postal Service toward insolvency.

“Defenders” of the Postal Service aren’t looking for a bailout. Returning overpayments made by the USPS to the Civil Service Retirement Fund (CSRS) and the Federal Employee Retirement System (FERS) is not a bailout.  Treating the Postal Service like every other business and government agency when it comes to pre-funding retiree health benefits is not a bailout. 

Calling these things a bailout is a privatizers’ talking point with no basis in reality. 

It’s by no coincidence that the drafted postal bill released by Rep. Issa includes provisions that would enhance the closing of post offices and mail processing facilitates and eliminate postal workers' protection against layoffs.

These “privatization reports” have Issa’s fingerprints all over them, one way or another.

The continuous effort of those who want to dismantle and privatize the Postal Service underscores the urgency for us to take whatever action is necessary to Save America’s Postal Service.