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White House Continues Opposition
To Key Provisions of Postal ‘Reform’ Bills
APWU Web News Article #19-05, April 18, 2005
Continued White House opposition to two key elements of postal “reform” legislation was the subject of a hearing by the Senate Homeland Security and Governmental Affairs Committee on April 14. The two provisions — involving releasing funds from escrow and transferring responsibility for military retirement payments — are supported by the USPS, mailers, the APWU and other postal unions, consumers, and lawmakers of both parties.
Members of the Senate committee grilled Treasury Department and Office of Personnel Management (OPM) officials about the administration’s opposition to releasing from escrow overpayments to the Civil Service Retirement System (CSRS), as well as the administration’s opposition to returning to the Treasury responsibility for the military-service retirement pay of postal employees. The Senate bill (the Postal Accountability and Enhancement Act of 2005 — S. 662) includes both of the provisions at odds with White House wishes.
“Any meaningful effort at postal reform must include these provisions,” said APWU President William Burrus.
Committee Chairwoman Susan Collins (R-ME) accused the Bush administration of playing a “shell game,” and said it was unfair to force the Postal Service to “subsidize the federal balance sheet.” Sen. Tom Carper (D-DE) also challenged the administration’s position.
Sen. Ted Stevens (R-AK) issued an angry rebuke to the Bush administration witnesses and said he intended to speak to the president personally about the matter.
Anti-Labor Proposals
The Senate panel also heard from Postmaster General John E. Potter and Government Accountability Office Comptroller General David M. Walker, who renewed their support for proposals the union adamantly opposes.
One proposal, endorsed at the hearing by both Potter and Walker, would make postal workers’ healthcare and retirement benefits, which are currently guaranteed by law, “negotiable” in the collective bargaining process. Another, suggested by Walker, called for adjustments to the wage standards used in contract negotiations.
Neither of the two proposals is included in the pending legislation.
Potter identified several subjects as essential elements of postal reform: resolution of the escrow and military retirement issues, bargaining over employee healthcare and retirement costs, requiring arbitrators to consider economic conditions favorable to management when issuing contract awards, and granting the Postal Service exceptions to the postage rate caps currently mandated in the Senate bill.
“The unwavering advocates of postal reform may be losing an important ally,” observed APWU President William Burrus. “After itemizing the elements that he considers essential to a balanced approach to postal reform, the postmaster general concluded by saying if the proper balance is not achieved, ‘We are better off with no bill at all.’
“This raises the interesting possibility that postal management and the Board of Governors could oppose postal reform as defined in the pending legislation,” Burrus said. “Groups that have been staunch allies on postal reform in the past may end up on the opposite side.”
Not Supported by Facts
In written testimony submitted to the panel [PDF], Burrus asserted that some assumptions underlying the rush to “reform” are not supported by fact.
First, Burrus told the committee, there is no evidence that the growth of electronic forms of communication will erode “hard copy” communication sent through the mail. He noted that growth in mail presort pieces sent to American households grew by five percent between 2000 and 2003, despite a poor economy and the terrorist attacks, and he cited a recent study that concludes, “the more one communicates electronically the more likely one is to use physical mail.”
“The sky is not falling,” Burrus told the senators, “and new technology does not threaten the viability of the United States Postal Service.”
A second faulty assumption, he said, is that the addition of 1.8 million new addresses each year constitutes a burden that will drain revenue from the USPS. “The addition of these new customers is presented as a negative, but any other business would be thrilled by a projected growth of 1.8 million new customers each year,” he said. “Yet in the debate over postal reform, the implication is that each of the new delivery points generates more costs than revenue. I have yet to see specific evidence to support this conclusion.”
Addiction to Excessive Discounts
Burrus reiterated the union’s belief that after resolution of the escrow and military retirement issues, the primary threat to the financial viability of Postal Service is its “addiction to excessive ‘worksharing’ discounts,” which “undermines the institution’s financial underpinnings, and cannot be justified.”
“If the mailing-industry lobby and the USPS get their way,” the brunt of the recently filed postal rate increase “will be born by individual mailers and small businesses,” Burrus said in press statement [PDF] released at the hearing. “Meanwhile, big advertisers and corporations that send billions of pieces of mail each year will pay as little as 10 cents for first-class letters.”
“Incredibly, the Postal Service’s rate increase application,” he continued, “proposes to increase the discounts offered to advertising mailers. While announcing to the world that the price of a stamp will rise” if postal reform legislation is not enacted, he added, “the USPS is quietly planning to give corporate mailers an even better deal than they enjoy now.”
“This corporate welfare drains billions of dollars in revenue from the Postal Service every year, forcing the USPS to raise postage and leaving individual mailers and small business to make up the difference. The Postal Service is a national treasure, and everyone must pay their fair share.”
Burrus also criticized provisions in the Senate bill that would impose a three-day waiting period on injured postal workers before they would be eligible for Workers’ Compensation. “Imposing a waiting period for worker compensation eligibility is unfair and inhumane – especially in light of the risks postal workers continue to face as they process and deliver America’s mail,” he said.
House Panel Approves its Version
The day before the Senate hearing, the House Government Reform Committee unanimously approved its version (H.R. 22) of postal reform legislation, which closely mirrors the legislation it approved last year. Last year’s bill never was scheduled for a vote in the full House.
Before voting 39-0 to send H.R. 22 to the full House of Representatives, the committee amended the bill to require the USPS to transport mail only on U.S. airlines.
No date has been set for floor debate on the House measure, and it remains to be seen whether lawmakers in either chamber will take up the matter without first resolving disagreements with the White House over the CSRS escrow and military retirement issues.
