By Danny Sawicki
Danny Sawicki is the Associate Editor of the “Detroit Postal Worker”, a quarterly newspaper for The Detroit District Area Local. In March, he had a Question and Answer session with Senator Carl Levin (D-Mich) concerning the current crisis of the United States Postal Service.
Q-Danny: Let’s start with the proposed consolidations and closings of Post Offices around the country. What are some of the financial alternatives the United States Postal Service could use so these dramatic measures do not have to be incorporated?
Congress needs to consider reasonable options to maintain a viable postal system. We must, at the same time, maintain the obligation to provide universal service. While, as a whole, the USPS needs to be a rate-payer supported organization, not every post office needs to post a profit. In fact, while some post offices are too small to turn a profit, they are still an important part of the postal system and an important part of their community. And, based on the estimate I’ve seen, the projected cost-savings from closing these locations would offset but a tiny part of the USPS’s current financial problems. I am concerned that current proposals to constrain costs by closing post offices and limiting services may unduly limit access to postal services for many residents and local businesses, and that such an approach also could contribute to further decreases in mail volume and revenue and postal service viability.
(2) The American public thinks that these proposed consolidations/closings are a done deal in May, when in fact they are not. Is that correct?
On December 13, 2011, the Postal Service announced a moratorium on the closure or consolidation of postal facilities until May 15, 2012. The intent of the moratorium is to provide Congress the time to consider postal reform legislation. The Senate is expected to take up S 1789, the 21st Century Postal Service Act in the next few weeks. S 1789 would enact several changes in how the Postal Service can close both mail processing facilities and post offices and provides for greater public involvement in these decisions.
(3) In February, you asked the United States Postal Service for more data and information concerning the consolidations/closings, have you had any response and what have they conveyed to you?
On February 23, 2012, the USPS notified me of the potential consolidation of mail processing facilities in Gaylord, Iron Mountain, Jackson, Kalamazoo, Lansing and Saginaw beginning in the summer of 2012. In response to this announcement, I sent the Postmaster General a letter on February 24th requesting more information on this proposal. I have yet to receive a response.
(4) Elaborate on the annual $5.5 billion payment that the Postal Service must make to pre-fund retiree health benefits. How can that be restructured so that the Postal Service can meet its obligations without breaking the bank every year?
The Postal Accountability and Enhancement Act (PAEA) of 2006 established the Postal Service Retiree Health Benefit Fund and required the Postal Service to prefund the cost of its’ retiree health benefits. While ensuring that retiree health benefits are funded is a laudable goal, the resulting requirement that the Postal Service make payments of approximately $5.6 billion annually for ten years has proven unsustainable. S 1789 contains a provision which lowers this prefunding requirement by amortizing the payment over a 40 year period.
(5) Explain the “Universal Service Obligation”. Is that a federal mandated obligation?
The United States Constitution gives congress the authority “to establish Post Offices and post Roads.” The Postal Service is directed in law to “provide a maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not self-sustaining.”
(6) Is it a correct assumption that rural and urban areas will be impacted the most by the consolidations/closings?
I am very concerned about the impacts of these closures on both rural and urban areas. Rural areas in particular may not have ready access to postal services. In many small communities, the Post Office may be one of the few commercial operations. The Detroit Free Press recently reported on the possible closure of the post office in Elm Hall, Michigan. This post office is one of the smallest post offices in America and a big part of the identity of this small community. The Postmaster General estimates that the closure of Elm Hall and approximately 3700 post offices nationwide will save $200 million annually. These savings amounts to 3.7% of the postal service’s deficit and is less than 1% of its annual operating cost.
On April 25th, the amendments of The 21st Century Postal Service Act (S-1789) were passed by the Senate 62-37. Now the amendments will go before Congress.
You can contact Danny Sawicki @ email@example.com