Updated May 20,
2010

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Service

Fundamentally
flawed
The Postal Service's proposal
to drop a day of delivery
is not the solution to its
financial problems

he Postal Service laid out a
wide-ranging—some would say radical—plan in March for coping with
its current economic problems and future business challenges. It
featured headline-grabbing initiatives, such as eliminating Saturday
mail delivery, and more mundane, nuts-and-bolts proposals, like
streamlining the regulatory process.

The NALC supports many of the plan’s
recommendations and goals, especially relief from the burden of
accelerated pre-funding of retiree health care and recovery of CSRS
pension fund overcharges.

But other aspects—particularly cutting
service back to five days a week—are foolhardy and the union will
fight them with all our might.

Five reasons to oppose five-day delivery

1. It’s penny-wise and
pound-foolish.
Saturday delivery is
the Postal Service’s key strategic advantage over its private
competitors, UPS and FedEx. Giving away our most important
comparative advantage in the one area of the postal market that is
likely to grow when the economy recovers—e-commerce package
delivery—would be very risky. Over time, the loss of revenue would
outweigh the short-term savings.

2. It will drive customers away.

Slower service—letters mailed on
Friday nights would not be picked up until Monday morning or Monday
afternoon—and less frequent delivery is likely to accelerate the
shift to electronic invoicing and electronic bill paying. Booming
businesses like mail order prescriptions would be threatened.
Reduced service would also threaten one of the fastest growing
segments of the mail—Parcel Select—as UPS, FedEx and other
consolidators would reconsider their use of last-mile delivery
services by USPS letter carriers.

3. It would prompt the emergence of new
competitors.
If the Postal Service
doesn’t deliver on Saturdays, other companies will step in to fill
the void. Within days of the Postal Service’s March 2 announcement,
multiple press accounts quoted executives from niche delivery firms
welcoming the news. Many companies would view the Postal Service’s
exit from Saturday delivery as a business opportunity. Once
established, competitors will demand a “level playing field” and ask
Congress to open the nation’s mailboxes to their services, making it
impossible to enforce the monopoly and maintain affordable universal
service.

4. It would set a bad
precedent.
If the language requiring
six-day delivery were repealed, there would be no legal barrier to
prevent the Postal Service from reducing delivery days further, from
5-day to 4- or 3-day delivery. Indeed, Business Week
magazine called on the Postal Service to shift immediately to 3-day
delivery within days of the Postal Service’s announcement of its
action plan. That would not only destroy half our jobs, but also
likely lead to a death spiral for the Postal Service—less service
leading to less mail volume leading to less service, and so
on.

5. It’s not necessary.
The Postal Service has hidden financial strengths,
with fully funded pension plans and, if the accounting is done
properly, fully funded retiree health benefits. If we can convince
Congress and the administration to fairly allocate pension costs and
correct the $75 billion error made by the OPM when it established
our retiree health fund, eliminating Saturday delivery would not be
necessary. Postmaster General Jack Potter acknowledged as much at a
March 18 hearing before a Senate Appropriations subcommittee. “If
that [recovering the $75 billion and applying it to future retiree
health care] were to happen,” he said, “we wouldn’t have to go to
six-, to five-day delivery.”

IMPORTANT NOTE:
The NALC's proposal will not
threaten anyone's retiree health benefits. The law mandates
the provision of these benefits even if the Postal Service's
retiree health fund had no assets. The retiree health fund is
designed to make sure that postage ratepayers reimburse the U.S.
Treasury for future health benefits. But USPS is being
massively overcharged for these costs
and there are excess postal pension assets in the civil service
retirement fund that should be used to cover retiree health costs
in the future. The reforms we support will save the Postal Service
billions and protect every postal employees' retiree health
benefits.

The latest news on NALC's
fight to save the Postal Service

Letters from grandma, pharmacy deliveries
The North Dakota
Newspaper Association has launched an information campaign about the
threat to six-day delivery. "Expecting a letter from Grandma [or]
medicine from the pharmacy?" asks a flyer. "Don't expect it in
Saturday's mail—that is, if the Postal Service has its way and
discontinues delivery of the mail on Saturdays." The flyer discusses
the misguided plan's implications and calls on customers to contact
senators with messages of support. Click here to see a PDF of the
flyer.

Cutting service would hurt global, local
businesses
In Sacramento, the Postal Regulatory
Commission heard from global and small business owners and others
who rely on six-day mail delivery. Sharif Sleiman of eBay said USPS
handles about 80 percent of his company's packages, generating about
$1.7 billion in Postal Service revenue. Six-day delivery is one
factor that makes USPS so attractive to eBay sellers, he said. Click
to read coverage in The Sacramento Bee, Capital Public Radio and Sacramento's
CBS13. There were seven total public hearings on the proposed
delivery-day cut scheduled.

"We are a service"
In
Las Vegas, the Postal Regulatory Commission held the first of its
seven national public hearings on the Postal Service's penny-wise
and pound-foolish proposal to slash service by dropping a day of
mail delivery. "Destroying good jobs by cutting Saturday delivery at
a time when we have a job crisis makes no sense," Nevada State
Association of Letter Carriers Vice President Rich Griffin
testified. Click the links to read more hearing coverage in the Las Vegas Sun and the Las Vegas Review-Journal.

More than just mail delivery
The Postal Regulatory Commission also plans to
look more closely at the overall social value of the USPS. Among its
evaluation topics are the community and public safety impacts of
letter carriers. Click here for the write-up on DMNews.com.

Taking our time, getting it right
The Postal Service
has criticized the PRC’s decision to leave open until
October 12 its docket on the question of dropping a day of delivery,
but a blogger argues that the timeframe is necessary. The Rag Content blog gets it: "The Postal Service
... cannot rush this process or [condemn] the Commission for taking
its time in listening to all parties. Due diligence is needed." Click here to read more.

"Do not mail" registry
rejected
On Monday, the Spokane,
Washington city council rejected 6-to-1 a non-binding resolution
asking the state legislature to create a registry that would allow
people to decline bulk mail. Carriers argued the idea would
hurt the already struggling Postal Service as well as businesses
that depend on mail marketing. "We’re talking about a lot of
jobs, not just postal service, but also in the private sector,"
Spokane Branch 442 President Martin Mueller told the council. Read more online in the Spin Control blog of the
Spokane Spokesman-Review.

GAO report attacks postal labor, stiffs
Congress
The Government Accountability Office issued its report
on potential changes in the Postal Service’s business model.
President Rolando expressed the union’s deep disappointment in the
report’s failure to deliver what Congress asked for, criticizing the
GAO for instead producing “a full-throated attack on collective
bargaining.” The full statement is here.

Only Congress can authorize a service
cutback
President Rolando says USPS's "reckless drive to end
Saturday delivery...distracts us from the real solution, eliminating
the crushing burden of a deeply flawed health benefits pre-funding
policy. Their website and public relations campaign appear designed
to fool mailers and the American people that 5-day delivery is a
done deal." Click here to
read the statement.

Pulling USPS out of the red
On Federal News Radio's "Your Turn," NALC President
Fred Rolando explained how the USPS plan to get rid of Saturday
delivery would not address the real problems the Service faces—that
doing so would simply make the USPS less attractive to those who
want to send something during the weekend, and it would eliminate
future revenue generation. Click here to read more and to listen to the
interview with FNR senior correspondent Mike Causey.

The plan is already backfiring
In Maryland, the Economist magazine plans to
experiment with private delivery this summer in anticipation of a
possible end to Saturday mail delivery. A plastic wrapper on
magazines delivered this week in the suburbs of Washington, D.C.,
explains the test to subscribers—and provides a clear, tangible
demonstration of how the USPS plan to cut Saturday delivery is
backfiring—it is pushing business out of the Postal Service.

The Postal Service's inspector general speaks
up
"The Postal Service
has been overcharged $75 billion for its pension obligations. Fixing
these overcharges will allow the Postal Service to address its real
challenges and implement its plan at a safer pace. The Postal
Service and its employees deserve justice in this matter and the
ability to fix the real problems." Click here to
read Postal Service Inspector General David Williams' editorial in
the Federal Times.

Congress questions USPS's
'worst-case scenario'
A House
subcommittee grilled Postmaster General Potter Thursday, April 15,
about his plan to drop Saturday delivery as one way to head off a
projected $238 billion loss over the next 10 years—a dollar amount
he admitted in his testimony represented a "theoretical" worst-case
scenario. One lawmaker, Gerry Connolly (D-VA), expressed skepticism
about the reliability of the projected loss, calling it "fake" and
"smoke and mirrors."
Read NALC's recap here.
Read testimony coverage from Reuters here.

Providing immense, irreplaceable public
service
"The Postal Service's economic
turbulence has fostered the fantasy that it is no longer necessary
in an age when 'warp-speed Internet' is constantly juxtaposed
against 'snail mail.' [W]e must recognize that the Postal Service
can and must remain public if we are to maintain the essential
infrastructures of democracy." Click here to read more from The Nation's John
Nichols.

NNA continues support for six-day mail
delivery
National Newspaper
Association Postal Chairman Max Heath says the Postal Service has
underestimated the public’s concern about a change in the number of
delivery days. "This change will affect the delivery of medicines,
home movies and timely bill payments," Heath said. "[It] is more of
a high stakes gamble, with a lower payoff, than experts can see so
far.” Click here to read more, including a statement
from NNA President Cheryl Kaechele.

Is Congress biting the
mailman?
"It is distressing to see
that Congress is apparently willing to go along with financially
squeezing the Postal Service, causing tens of thousands of postal
workers to lose their jobs and ending Saturday mail delivery." Click
here to read more from Talking Points Memo's Dean Baker.

Five-day service faces resistance in
House
"While I understand the
seriousness of the Postal Service's fiscal issues, I remain
supportive of a six-day delivery schedule," House Financial Services
Appropriations Subcommittee Chairman Jose Serrano, D-N.Y., whose
panel controls the small appropriations bill that mandates six-day
delivery, said in an article that appears on
NationalJournal.com. "I will be in conversations in
coming weeks with the senior postal leadership and the postal unions
in an effort to avoid service cuts."

PRC Chairman: Five-day delivery is "not a done
deal"
Postal Regulatory Commission
Chairman Ruth Goldway cut through the Postal Service's media blitz
by clarifying that the decision to cut a day of service cannot
happen until after her panel issues its opinion. "It's not a done
deal by any means," she said. The PRC plans to hold meetings across
the country with everyday customers before consulting with lawmakers
on an ultimate decision. Read about it on The Washington Post's Federal Eye
blog.

President Rolando advances to Congress the
union's stance on postal finances, six-day delivery
NALC President Fredric V. Rolando delivered a
statement to the Senate Appropriations Subcommittee on Federal
Service and General Government in response to the Postal Service's
seven-point "Envisioning America's Future Postal Service."

Click
here to read the complete statement. Click here to
read a related press release.

Cutting Saturday mail
self-defeating?
"This is a country
that increasingly demands speed; you'd think that someone, if only
in an effort not to fall further behind, would be suggesting a
seventh day of delivery be added. " Read more from CNN contributor Bob Greene here.

Postal Service cutbacks could hurt Netflix’s bottom
line
Dropping Saturday delivery would
be a serious blow to the DVD rental service's finely tuned business
model. Click here to read an article by The Big Money's Ethan Epstein.

No actual need to cut service
Postmaster General Jack
Potter told Congress March 18 that recovering the $75 billion USPS
has been overcharged
for the Civil Service pension fund could essentially solve the
Postal Service’s financial crisis, eliminating the need for
draconian measures like cutting delivery days.

Here is Potter’s key exchange with Sen.
Richard Durbin (D-IL) during a Senate Appropriations subcommittee
hearing March 18:

Sen. Durbin: The
Inspector General says you have overpaid $75 billion into the
Civil Service Retirement System. If this is accurate, could you
use this as a source for retiree health benefits and some of the
other economic issues you’re facing?
PMG Potter: Yes, sir.
Sen. Durbin: ...Are you trying to recover
the $75 billion?
PMG Potter:
...We are working and have appealed to OPM and OMB to re-open this
very matter. If it were to happen, it would literally, I think, we
would be almost fully funded on our retiree health benefits trust
fund.... It would take a lot of pressure off. If that were to
happen we wouldn’t have to go to six-, to five-day
delivery.
Sen. Durbin: ...You’re
saying that if the $75 billion is found you wouldn’t have to cut
the frequency of service?
PMG
Potter: Right.

Click
here to watch the entire video on c-span.org (link opens a new
browser window or tab). The exchange above begins around the 49:30
mark.

Likely to do more harm than
good
As NALC President Rolando made
clear to reporters who called for the union’s reaction to the USPS
plan and in letters to the editors of both The Washington
Post and The New York Times, the NALC agrees with and
can support much of the USPS plan. Many of the actions make sense—so
long as the NALC and the Postal Service work together through the
collective bargaining process. But cutting service is and penny-wise
and pound-foolish, likely to do more harm than good. That was the
message of the letter Rolando sent to every letter carrier in
America on March 17. Click here
to read the letter.

Obama budget backs six-day
delivery
President
Obama’s fiscal 2011 budget proposal requires the continuation of
six-day delivery by the Postal Service.

In setting the amount for “revenue forgone” to
cover the costs of free and reduced rate mail, the spending plan
says payments will be made “provided that 6-day delivery and rural
delivery of mail shall continue at not less than the 1983 level....”

Looking to the future, the proposal, submitted to
Congress on February 1, states, “The Administration will work with
the Postal Service, its employee unions, the Congress, and other
stakeholders to make sure the Postal Service [remains] a pillar of
the American economy and a vital public resource through the current
crisis and over the long haul.”
See the USPS
section of the budget, with key sections highlighted, here.

OIG: $75 billion over-charge for pension
liabilities
In a special report, the USPS Office of Inspector
General strengthens the case NALC has made over the past three years
that the Office of Personnel Management badly miscalculated the
postal surplus in the Civil Service Retirement Fund. The OIG’s
investigative research unit report shows USPS was overcharged an
astounding $75 billion for pension liabilities that should have been
paid for by the U.S. Treasury, since they relate to service
performed before USPS was created in 1971. This means the onerous
prefunding schedule included in the 2006 Postal Accountability and
Enhancement Act is grossly inflated, since OPM shortchanged the
Postal Service Retiree Health Fund in 2007, when the agency
transferred the surplus into the fund. Fact Sheet

Click
the image to download a PDF of this poster

QUICK LINKS

Link: Obama budget backs
six-day delivery

Congress: As of May 20, 180 representatives were co-sponsors of H.
Res. 173, expressing the sense of the House that USPS "should
take all appropriate measures to ensure the continuation of
its 6-day mail delivery service."

OIG: $75 billion over-charge
for pension liabilities. OIG's report is here (PDF).

Statement: President Rolando's submitted
statement to the Senate Appropriations Subcommittee
on Federal Service and General Government

Statement: President Rolando's news
release on the Postal Service's lobbying effort

Fact
sheet: Eliminating Saturday delivery is not the answer
(PDF)

Fact
sheet: Strengthening the Postal Service: Reforming its
retiree health pre-funding schedule (PDF)

Fact
sheet: Save the Postal Service: Demand fairness in USPS
pension and retiree health funding (PDF)

Fact
sheet: Postmaster General says correcting CSRS
overcharge would end efforts to cut back mail service, ease
Postal Service financial crisis (PDF)

Postal
Record:
Reinventing
the Last Mile, March 2010
The right road to a solid future, April
2010
Standing
tall, then and now, May 2010

NALC Bulletin: Get the
latest coverage here.

© National Association of Letter
Carriers, AFL-CIO