Congress ties Postal Service into knots

Where were the voices of opposition in 2006?

For one thing, the significance of the change in the legislation between the House and Senate versions and the final version was not immediately apparent to members of Congress or to observers. And most people don’t want to talk about it: Remapping Debate contacted the vast majority of the members of Congress who served during 2005 and 2006, or currently serve, on the Senate and House subcommittees that oversee the Postal Service, along with a few others who have sponsored postal legislation but do not sit on these subcommittees, to enquire about the origins of the accelerated prefunding payments. Most did not reply for requests for an interview, or replied and declined to comment. A few declined an interview by referring Remapping Debate to other members; others by providing a previously prepared statement on postal reform or links to previous public statements.

A few people were prepared to speak. “I’m not aware,” said Rep. DeFazio, “of any discussion by anybody [at the time that] we were looking at a massive ten year funding obligation…I think a bunch of Democrats got suckered on that one,” a decision that was made by voice vote during the 2006 lame-duck session of Congress. “They didn’t realize how radical the changes were.” DeFazio himself acknowledged, “To tell the truth, I don’t even know if I was there for the voice vote. It was not a momentous day, no one said, ‘Oh my God, we are bringing up the Postal Service reform bill as a voice vote.’”

According to Sen. Carper’s emailed response to Remapping Debate’s inquiry, “While the payments were larger than my colleagues and I would have liked, we had no reason to believe that the Postal Service would not be able to afford them. At that time, mail volume was at its historic peak and the Postal Service indicated the payments were affordable.”

Indeed, the Postal Service had reported at the end of 2006 having delivered more mail and earned more revenue than at any time in its history. But, could the accelerated prefunding problem really have been so difficult to predict if, in February 2007, just two months after the PAEA passed, the Postal Service reported that, as a result of the prefunding requirement, it would likely end the fiscal year some $600 million in the red?

Former Rep. Davis, noting the recession’s role, along with a faster-than-expected decline in first-class mail volume, in exacerbating the Postal Service’s problems, took the position that, “It is not like the government was completely off base with this [prefunding], it is just that if you look over the short term with what has happened, could they have used that money more flexibly? Absolutely.”

The postal worker unions do not appear to have been any more prescient in raising red flags about the Postal Service’s looming revenue problems or in proposing alternative uses for the savings than other participants in the process. The National Association of Letter Carriers, which currently represents 207,000 postal workers, supported the PAEA. It declined to make a representative available for an interview.

The American Postal Workers Union (APWU), which currently represents 211,000 postal workers, opposed the PAEA for reasons unrelated to the accelerated prefunding requirement. Reflecting back on the legislation, however, Sally Davidow, the union’s communications director agreed that the surplus could have been used more constructively: “Were there better uses [for the surplus]?…There are competing forms of communication that the Postal Service could have been experimenting with and trying, and modernizing to remain relevant in the digital age. It doesn’t have the capital to do any of that stuff. Had it not spent those billions of dollars, it might have had capital to pursue new and exciting ways to serve the communications needs of the nation.”

Why didn’t the APWU propose such a plan? William Burrus, the president of the APWU from 2001 to 2010 told Remapping Debate that proposing an alternative would have been “a step too far,” explaining that, in his view, “It is very tempting for a labor union to feel that they are a part of the administration, that they are on the inside making decisions for the industry, rather than focusing on improving conditions for the membership. That is our only role and responsibility.”

Were there and are there alternative routes for the Postal Service’s future?

A trio of recent Postal Service Office of Inspector General (OIG) reports makes clear that the answer is “yes.” Alternatives included letting the Postal Service manage the expansion of broadband service to areas of the country that private internet service providers have not developed and letting post offices serve as a hub for offering all kinds of municipal, state, and federal government services. Other retail ideas considered by the OIG include allowing the Postal Service to offer Wi-Fi and public computer access, banking services, e-bill pay services, and insurance, as well as consumer goods like greeting cards and office products.

Davis told Remapping Debate that, “I would have given the post office a much freer hand. If it were up to me, I’d let them operate as a business and let them compete with these other guys [shippers like UPS and FedEx] a little bit. I think it brings greater competition and more innovation.” Similarly, Baker said, “A private business in this situation would be trying to take advantage of the resources they have and move into other areas.”