Saturday, May 13, 2017

21.2 - The USPS is under attack again

The USPS is under attack again

Oh lord, they are at it again. And while you may not think this is worth the time I'm going to spend on it, it's important because it's about continuing a basic government service and revealing about the right-wing approach to government and governing.

The GAO, the Government Accountability Office, just reported to Congress that there are major programs receiving scant attention that are draining the Treasury and that could pose long-term challenges to the nation's fiscal stability.

One of three they highlighted was the US Postal Service, the USPS, still popularly called the post office.

And so we have face another chorus of how the Postal Service is on the brink of financial collapse, of fiscal disaster, of crushing bankruptcy; it's on the edge, the precipice, of utter failure and ruin, a chorus that has continued almost unbroken for a decade or more.

I've said all this a few times before, but apparently is needs repeating particularly because you need to realize that despite the claims to the contrary, all of this is not about preserving the Postal Service, it's about destroying the Postal Service.

What is bizarre about this right at the top is that while the USPS is a quasi-governmental agency and yes has been running significant deficits for the last decade, it is not "draining the Treasury" and poses no challenge "the nation's fiscal stability" because the USPS does not get a single penny from the federal government. Not one. It's operations are entirely, entirely, self-funded through the sale of postage and other services. The last time the Postal Service received any subsidy from the government was in 1982.

Which is part of the problem because starting in 1971 with the establishment of the USPS, the agency was essentially cast adrift, left to sink or swim - even as Congress continued and continues to have significant authority over the operations of the agency.

And what has Congress done with that authority? Well, for one thing, it banned the Postal Service from raising the cost of postage beyond the inflation rate.

Why is that a problem? Because in basic capitalist economics, a business has two ways to increase revenue: increase the amount of business you do or raise the price of each unit of that total business. The idea is that a business will keep tweaking those two - price per unit versus number of units - to find the combination that maximizes income.

But the Postal Service, by law, cannot use one of those options. Which means the only way it can increase its real revenue (and actually improve and expand service) is to increase its volume of business - and do it even as a continuing chorus of voices from right-wingers in Congress call for what they say are "cost-cutting measures," such as an end to Saturday deliveries and closing regional mail-processing plants (which will slow transit times), measures that would very likely decrease that volume and so make matters worse. Which maybe is the point.

What else has Congress done with that authority? Here's a big one: In 2006, Congress mandated that the Postal Service fully fund retiree health benefits for future retirees out to 75 years in the future and had to do it within 10 years at a cost of over $5.5 billion per year. Put another way, Congress in essence was requiring of the USPS that within 10 years it be able to fully fund health care benefits for future retirees who hadn't even been born yet.

Opponents of the Postal Service claim that the provision really only requires such funding for current employees, not future ones, but considering that by this requirement, the very day that the USPS hires someone they are supposed to ensure that their retirement health benefits are already fully funded, no pay-as-you-go, no building up an account over time, that is truly a distinction without a difference.

That demand is a requirement for a level of guarantee, a task taken on by, no other agency, corporation, or organization in or out of government in the US. And it remains a major reason for the agency's financial struggles: That GAO report said that
In fiscal year 2016, when USPS was required to make $13 billion in retiree health and pension payments, it made $7 billion in payments - mainly due to not making a required retiree health payment of $5.8 billion.
That is, the agency could have made the required payments - except for that inane retiree health plan requirement.

To top it all off and to show just how transparent the actual goal is - that goal being to destroy the USPS because it is proof that a government agency can do its job well, in this case deliver the mail, over the long haul and do it while having a workforce with a strong union - a few years ago it was discovered that due to a massive accounting screw-up, the USPS had overpaid into worker pension funds to the tune of $50-75 billion. A proposal was made in Congress to allow the USPS to shift the excess funds - not, as some have falsely claimed, to "borrow against that account" but to shift the excess - into the fund for future retiree's health benefits to cover the shortfall. Note first that the Postal Service needs Congressional approval simply to shift funds from one account to another. Note next that the proposal was rejected with the inane claim that it constituted a "bailout."

Face it: Mail is a bargain. You can mail a one-ounce letter, about three sheets - that's six pages of text - anywhere is the US, you could send one from Key West to Point Barrow, from Bangor to Honolulu, for 49¢ - an amount that otherwise might get you half a candy bar.

And when I say anywhere, I do mean anywhere. The USPS is legally required to provide universal service and it makes deliveries to 150 million individual addresses nationwide every week. It has to make mail service available to everywhere - you may have to travel a bit to get to a post box or to where a whole group of mailboxes stand at the end of some rural byway, but mail must be available to everyone. Even if you are way out in the country, even if you are in some neighborhood deemed "too dangerous" for services like taxis, the mail still must be available. That is a requirement which does not exist for the Postal Service's private competitors like UPS and FedEx. They don’t have to do that: They think your address is too inconvenient or otherwise not profitable, they just don't do it. In fact, both those corporations sometimes pay the USPS to deliver packages for them.

Which means, in turn, that there are millions and millions of people who need, who rely on, the USPS's services, including poorer people, folks in rural areas outside the usual delivery areas, people who use post offices boxes, and many more, including some small-scale entrepreneurs who often find that the USPS is the cheapest way to ship goods. (Speaking of which, if you're the type to sneer "I don't need the Postal Service, I use email," then tell you what, next time you go online and order a t-shirt, see if they can email it to you.)

Which means in its own turn that the people who do not depend on the USPS tend to be the rich, the powerful, the connected: people who for their own selfish reasons often are more concerned - despite their smiling, lying assurances to the contrary - with bringing the system down than with preserving it.

Finally, as for the entire issue of "deficits," think of it this way: Some years ago, someone noted that the very concept that a basic modern-world governmental service like a postal system could be "running a deficit" is absurd: By that definition, they said, the Pentagon is running a yearly "deficit" of over $580 billion.

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