Postal union report slams ‘shrink to survive’ proposals

The report comes on the same day that the Senate’s postal reform bill cleared a procedural hurdle with bipartisan support. 

{mosads}But with all sides agreeing that lawmakers need to act on postal reform, the paper also underscores the different approaches that are being advocated to help an agency that has lost billions of dollars in recent years amid declining mail volume.

NALC has already announced its opposition to the Senate postal reform bill, and a House GOP effort as well. 

In general, postal unions have said that USPS should seek to eat into deficits by growing their business and increasing revenues, an approach embraced in the Lazard paper and by sympathetic senators like Bernie Sanders (I-Vt.).

With online shopping on the rise, the report suggests that USPS, which already completes some deliveries for UPS and FedEx, explore new delivery services. Lazard also notes that the United States currently has lower postage rates than Canada, Great Britain and other developed countries.

The paper also suggests that postal employees will have to sacrifice to ensure the Postal Service’s health – noting that the agency, which now sees labor account for 80 percent of its expenses, will need to have a smaller workforce. 

But it also says that the current USPS proposals are “largely based on one-sided employee sacrifice leading to the loss of jobs and benefits.” 

The Postal Service, which is trying to cut some $22.5 billion in annual costs by 2016, has said that it wants to eliminate Saturday delivery and roll back overnight delivery of first-class mail. 

The agency, which has tossed out the idea of closing more than 200 processing centers and thousands of local post offices, has said it will not shut down any facilities until May 15 to allow lawmakers to negotiate postal reform legislation. 

Under the Senate bill, the agency could be allowed to shift to five-day delivery after two years, and would also get to ship beer and wine. 

After a group of Democratic senators, led by Sanders, expressed concern about the proposal, the legislation now also includes other proposals to allow the agency to increase revenue and more safeguards to overnight delivery and rural post offices. 

But the Lazard paper says the measure is a stop-gap that would merely facilitate the Postal Service’s efforts to cut, shrink and keep the agency’s outdated business model. 

“There is little in the proposed legislation that addresses potential expansion of services, more flexible product pricing or necessary changes to the Postal Service’s oversight and governance – all key elements of a comprehensive plan to create a sustainable and viable Postal Service,” the paper says. 

Sen. Tom Carper (D-Del.), one of the four sponsors of the Senate postal proposal, said the new union report ignored some of the legislation’s provisions that would give the agency growth opportunities.

“Unfortunately, the white paper the NALC and Lazard have issued today is thin on data, analysis, or fresh ideas for modernizing the Postal Service,” Carper, who chairs a Homeland Security subcommittee that oversees USPS, said in a statement. “Rather, it’s thick with tired attacks on the Postal Service and mischaracterizations of the bill before the Senate.”

Carper also chided the paper for throwing out what he called “Band-Aid” solutions, including the idea of scrapping a requirement that the Postal Service spend more than $5 billion a year over a decade to prefund retiree health care costs.

Both USPS and postal unions are on board with that plan, but the Senate bill would instead spread the current payments out over four decades. 

The proposals in the union paper have also met some resistance from other quarters. 

Groups that represent magazines and newspapers, among others, have opposed increasing postage prices. Some Republicans are also cool to the idea of the Postal Service competing with private businesses.