Now that postal legislation is stuck in the House, decisions must be made on whether any bill is better than none. The legislative professionals have analyzed the Senate bill and determined that it does more harm than good. As a result, union supported initiatives are underway to bring the House bill to a vote and take a shot at amending it. Whoa! Have you looked at the House bill lately? It includes:
· Five day delivery
· Arbitrator instructions
· A super Board to micromanage postal affairs
· Grants USPS authority to change service standards
· Repeal of no lay off and a few more tidbits favored by the right wing
If the objective is to preserve the Postal Service and good paying jobs you will not find ammunition in the House bill. The competing logic is that calling up the House bill provides an opportunity to address the health care payment that is strangling postal finances, but that is not an immediate employee problem. It may be presumed that relief from the payment will relieve the pressure to consolidate; wrong again. That train has left the station and it cannot turn around.
The Postal Service will not run out of funds in 2012 to satisfy financial obligations beyond the health care payment which they did not make in 2011. Everyone knows that they will not make it in 2012 so let Congress worry about it. If they aren’t concerned, let it be. If the Postal Service doesn’t need the legislation to make payroll and other financial obligations in 2012 why be in a hurry to put major union issues on the table? Perhaps there is a secret plan to convince Issa and Ross of the folly of their proposals, but I sure haven’t seen one and I would advise that you refrain from betting the house on it. Another strategy may be depending on a conference of House and Senate appointees going in their own direction and essentially crafting their own legislation but that would be a huge gamble. The nervous Republican House members are concerned about office closings in their Districts and if that is taken care of before the election they could care less about the other union issues. Any of these options would be bad. It would take the height of optimism to believe that lightning will strike and legislation will be passed that does not include a number of features detrimental to employees, the union and the public.
If regressive legislation is passed, one can expect that the unions will castigate them as ill-advised and detrimental to the interest of the public as has been done with the Senate bill, but the damage will be done and this is not arbitration where sometimes in the distant future a decision will be rendered confirming our position. This is not a debating contest where a judge will declare a winner and lecturing the ill-informed is self-gratifying but nonproductive. The final option is a presidential veto but that brings us back to where we are today.
There is an old axiom “let sleeping dogs lay” and it may be appropriate given the present choices. The financial stability of the Postal Service is the responsibility of Congress and we have gone down the road of pitching in and it hasn’t worked out to well. Let management worry about management issues.
One thing is clear; there is no real danger of privatization. Given the chance, even the most conservative representatives are presenting proposals to keep it solvent. Senator McCain’s amendment to BRAC the Postal Service received scant support. Unless convinced otherwise, we should consider the health plan payment as a non-factor. It serves as a retort in discussions about postal finances and makes good talking points but let it go as a political strategy. Let the government worry about how they will deal with the health care payment on the federal books. That leaves us with the overpayment to the retirement plan. The perfect solution would be to release the $14 billion as a part of reform but this is a separate issue. It’s the Post Offices’ money but OPM will not release it without Congressional approval. As long as the refund is tied to postal reform forget about the possibility that Congress will forgo the opportunity of addressing their pet issues. This refund is being held hostage to a political agenda. The objective should be the release of the money with as little damage as possible.
Mail volume is close to stabilizing and postal finances will survive 2012 without Congressional help and they have a real shot of paying their bills in 2013. Don’t be panicked by the PMG’s announcement that they are losing $25 million a week. This is dominated by the health care payment that he has announced he cannot pay. What the Post Office needs is a healthy credit line to handle the cycles of their financial obligations. As last reported, they were down to less than $1.5 billion from the $15 billion credit authorized by law. With the consolidations on the drawing board, the office closings and other initiates over the next several years, even with the continued erosion of first class mail, they can meet expenses with equal revenue over the next 10 years, if they have access to borrowing capabilities.
Any serious overview of long term sustainability should begin with a restructuring of the rates. The current system relies too heavily on single piece First Class mail. It is expected that total mail volume will return to former levels as the economy stabilizes, but a smaller percentage will be the financial pillar of single piece First Class. Parcels are a bright spot and will hold their own far into the future, but Standard mail must make a greater contribution to the bottom line. This can be achieved through tinkering with the discounts or a general restructuring of the rate scale and require Standard mail to contribute a greater percentage of the total revenue generated to pay for the network and door to door delivery. The day of the free ride is over. Volume will be affected marginally, but commercial mailers must pay a greater share for the services received. A modest increase will still result in the best bargain in the world when one can advertise in the home of every American for less than 20 cents per delivery. What else can you send from Maine to California and have delivered to your home for less than 20 cents?
So the need is to take a deep breath, set aside a legislative remedy for the health care payment unless you are willing to accept the unfavorable add on’s. Congress created the health care mess let them solve it separate and apart from the retirement overpayment. Forget a legislative solution to immediate structural problems that will come with too many strings attached and focus on restoring a healthy credit line. Sometimes in the near future, the mindset must be adjusted to reflect that First Class single piece volume cannot continue to subsidize Standard mail, but this is not a legislative issue so while it makes interesting conversation it is not an immediate problem that has to be addressed.
I defer to the political professionals to chart a course but it is worth considering to:
· Work to prevent the House from considering any postal legislation
· Kill the bill.
· Ignore the health care payment that must be addressed by Congress
· Solicit a friendly Senator to add an amendment to legislation that has Republican and Democratic support to transfer the retirement overpayment to the USPS’ line of credit in annual amounts with limitations on its use.
Remember, this is USPS money that was paid in excess. It does not require appropriations, just internal government transfer.
This is a reasonable legislative solution that does not expose postal employees, the public and the unions to political objectives. The alternative is to close your eyes, lower your head and plow forward. When the dust settles you can reserve the right to say that they screwed up but the dye will have been cast and your critical analysis after the fact will be no more than hot air.
The focus at this time must be controlling the damage and a reasonable alternative is to let the House bill die. If there is a better plan hatched in confidence, I defer to the professionals but to gamble on the outcome is playing with fire. Be careful what you ask for, you just might get it.