Wednesday, July 31, 2013

National Association of Realtors

National Association of Realtors: The Digital Real Estate Transaction: Moving Beyond Maps
Date: 06/20/13
Jessica Lautz: Manager, Member and Consumer Research Service, National Association of Realtors
Marty Frame: President, Realtors Property Resource (RPR)

Lisa Mihilich: CEO, Ziplogix

Ken Moyle: Chief Legal Officer, Docusign

Glenn Shimkus: CEO and Founder, Cartavi

John Breyault: Vice-President of Public Policy, Telecommunications and Fraud, National Consumers League

Purpose: Living in a society that has almost completely gone digital, real estate is no different.  Real estate has followed suit and is increasingly focused on how they might improve efficiency in their field.  The National Association of Realtors (NAR) is getting more involved in digital policy and would like to show how real estate has shifted into this digital age. 

Information and Discussion

Use of the internet prior to selecting a house. According to Google, over the past four years, the number of Google searches for buying a home has increased 253%.  Using search engines or the internet in general, is now the leading way to find a home.  Prior to this year, the leading way was to find a house based on an open house or seeing a yard sign.  On average, people perform 11 searches prior to taking action.  Taking action can refer to contacting a real estate agent, visiting the home, getting pre-approved for a loan, etc. 78% of people visit at least, 3 sites prior to taking action, trying to see videos, photos, etc.  69% of people who take action search for the home using a local term, referring to a particular district, place, landmark, etc. in a city/town.  People are, increasingly, searching for their homes on their mobile devices, with the plurality of them (approximately 40%) doing so, while watching television.  Surprisingly, 28% of mobile real estate shoppers do so while standing in line.  Most people use the internet so that they can view videos or virtual tours about the community or see the whole house.  The thinking is that it’s easy to stage a room for a photography session.

Realtors Property Resource.  It was created by NAR for the purpose of providing realtors with the data they need;  it is only available to realtors and there is no cost member benefit.  The purposes of RPR are to provide a more efficient support for NAR by giving high quality property valuations on an easy website to use for realtors.

Ziplogix.  Ziplogix has been partnered with Docusign for 9 years and is also owned by NAR.  Over 600,000 realtors are currently signed up for this service and it is available in 48 states.  They provided a zip form of all of the forms that are needed for a real estate transaction.  They now provide mobile versions of their forms on a mobile web app. 

Docusign and Cartavi.  Docusign is adding 70,000 users/day and is growing 80%/year.  The purpose of Docusign is to allow users to send e-mail or electronic copies of forms, receipts, and other documents to allow other people to sign.  Doing so, will save countless sheets of paper.  Still today, there are 200 billion pages faxed in the United States.  They keep all documents secure and verify the right person is signing by using a Docusign id card; Facebook is often used for authentication.  Docusign recently acquired the company Cartavi.  Cartavi allows all participants in a real estate transaction to log in and be able to communicate in a secure forum.  With the help of Docusign, Cartavi has been able to get all participants to be able to sign all documents in one area.  On average, over 12 people from at least 10 different businesses participate in every real estate transaction.  The goal of Cartavi is to keep as much of real estate as they can, digital.  Having this secure forum, where everyone can sign and look at documents close to instantly, it saves turnaround time from all participants. 

Fun fact.  Three years ago, only 2% of American adults were using tablets.  That is now up to 29%. 

Policy.  The biggest issues in policy for the digital part of real estate has to do with privacy and data security.  There are not uniform standards across the federal government about data security and privacy.  Currently, the companies involved hold their standard up to the state with the toughest laws.  Ken Moyle would like to see a uniform standard across all states.  But he warns that it might not affect as many companies as you’d think, because Europe has very different laws than the United States.  A global uniform standard for data security and privacy is a pipe dream.  The main reason for that is that countries like the United States, Great Britain, India, and Canada have a very different role in government for their courts compared to other countries.    

Tuesday, July 30, 2013

The Affordability of Housing

The Symposium on the Affordability of Housing
Date: 06/19/13
Joel Kotkin, Professor of Urban Development, fellow at Chapman University and the Legatum Institute

Steve Pontell, President and CEO of National Community Renaissance (CORE)

Randy Jackson, President The Planning Center

Purpose: There is good news and bad news about the housing market.  The good news is that we are in a recovery but the bad news is that we are in a recovery.  After the housing crisis in recent years, we have felt the need for an adequate supply of affordable housing.  In many places around the country, income has not kept pace with the rise in housing prices.  The market has failed to produce a supply of affordable housing.  Because of this, federal housing assistance programs are facing considerable strain.  There is a need to have a conversation to identify the causes of the housing market’s inability to provide affordable housing alternatives and to find workable solutions to this crisis.

Information, problems, and proposed solutions

Change in median house prices from 2012-13. The national median for this change was 11.3%.  California had the city with the highest change in median house prices.  This city was San Francisco, the median price for houses in San Francisco rose by 32.6%.  Riverside had an increase of 24.3%.

Median Multiples. One way of measuring the affordability of housing in an area is to determine how many years at the median income, for that city, would it take to make enough to buy a house, in that city.  The national average, in this respect, is 3.1 years. There are some discussions that above 4 or 5 years indicates a problem with affordability.  In Los Angeles, it would take about 6 years, by this measure.  The highest that is measured is in San Francisco, which is nearly 8 years.  Minorities are hurt by this, in part due to a lower median income.  Nationally, African Americans would need about 5.5 years to be able to earn enough to buy a house and Hispanics would need 4.9 years.

Affordability in California and Orange County. The gross rent national average is $871 per month.  In the Los Angeles/Orange County area, it is closer to $1400 per month.  This is one of the higher rates that they found.  27% of people, nationally, spend more than 50% of their income on housing.  In Los Angeles, closer 40% of people spend greater than 50% of their income on housing.  If you want to buy a home in Orange County, you need to have an income of at least $117,000 to be able to adequately afford a house.  In the Riverside or San Bernardino area, this drops dramatically to about $40,000.  In Orange County, to afford a median priced one bedroom apartment, your hourly wage needs to be $26.62 per hour.  In the Los Angeles/Orange County area, overcrowding of apartments is well above the national average.  Overcrowding of a rental property is 1.5 people/room.  The national average is 1.8% of rental properties.  In the Los Angeles/Orange County area, it is 7.5%. 

Problems in housing affordability.  We do not have so much of a supply gap but an affordability gap.  The biggest three issues for housing affordability is that increasingly there are more and more real houses being bought by investors.  There are just enough affordable housing units.  Third, people’s economic strategy does not always include housing.

Coachella Valley project. On one side of the Coachella Valley, it is incredibly wealthy, while on the other it is full of migrant farmers and agricultural workers.  About 70% of the agricultural workers live in Coachella Valley full-time.  About 33% of farm workers in Coachella Valley are living in places not intended for humans.  The Planning Center has announced a competition where various organizations are competing to be able to put up affordable housing.  The winner will get $500,000.  They have partnered with a green energy company, as well.  The goal is to be able to build a safe community that will allow people to live healthy lives in the Coachella Valley.

Monday, July 29, 2013

Syria and the Syrian Civil War

Memo on Syria and the Syrian Conflict

Introduction. At the end of 2010 there was a demonstration in Tunisia to protest police corruption and more generally, dissatisfaction of the Tunisian government.  There were a number of protests throughout the Arab world, commonly referred to the Arab Spring.  These protests also arose in Syria, at the beginning of 2011.  During the Day of Rage protests, the Ba’ath Party government ordered by President Bashar al-Assad arrested a number of protesters.  The protesters called for the resignation of President al-Assad and the end of the Ba’ath Party rule.  The reactions of the government to these protesters continued to escalate leading to an armed conflict.  Some members of the Syrian army defected to the Free Syrian Army which is the army of the National Syrian Coalition, often referred to as rebels or the opposition.  Many countries have tried to intervene in the Syrian Civil War, for both sides.  The United States, under President Obama, has tried to stay out of this conflict until evidence was found of the use of chemical weapons.  There have been multiple attempts to bring about an end to the conflict in a peaceful manner.


Ba’ath party: also known as the Arab Socialist Ba’ath Party, founded in Syria, its ideology mixes Arab nationalist, pan-Arabism, Arab socialist, and anti-imperialist interests.  It calls for unification of the Arab world into a single state.  The Ba’ath party has been in power in Syria since 1963 and re-established its power over the government in 1970.

Bashar al-Assad: President of Syria, succeeded his father, Hafez al-Assad, in 2000.  Hafez al-Assad had served as President for 30 years.  Bashar al-Assad was elected in 2000 and 2007, running unopposed each time.  He is a critic of the United States, Israel, Saudi Arabia, and Turkey and has been criticized for human rights violations, economic lapses, and corruption.  He has cracked down on political activists since the Damascus Spring in 2001.

Free Syrian Army:  started with defectors of the Syrian army who refused to shoot civilians, led by Colonel Riad al-Assad.  The Free Syrian Army announced its formation on July 29, 2011 in an online video.  They have stated no political goals except the removal of President Bashar al-Assad.  On September 23, 2011, they merged with the Free Officers Movement and became the main opposition army group.  There are an estimated 15,000 to 25,000 defectors from the armed services.  Their actions support bringing down the government, protecting civilian protestors, encouraging army defections, and carrying out armed action.  They have been supported by the Libyan National Transitional Council (2011), Britain (2012), and Kuwait (2012).  There has been talk from other Gulf States to arm the Free Syrian Army.  A non-governmental organization (NGO) in Washington DC, called the Syrian Support Group also helps fund the FSA.  The FSA has been criticized by Human Rights Watch and the United Nations sponsored Independent International Commission of Inquiry on the Syrian Arab Republic for carrying out war crimes.  Although, they are not as bad as the state forces.

National Syrian Coalition: also known as the Syrian National Coalition or National Coalition for Syrian Revolutionary and Opposition Forces.  Made up of a coalition of opposition groups to the Syrian government.  The main goals of the National Syrian Coaltion is to replace the Bashar al-Assad government, dismantling the security services, unifying and supporting the Free Syrian Army, refusing dialogue and negotiations with the al-Assad government, and holding accountable those responsible for killing Syrians.  They have been recognized by Libya (2011),  the members of the Cooperation Council for the Arab States of the Gulf , Saudi Arabia, Qatar, Bahrain, United Arab Emirates, Kuwait, and Oman, in 2012.  The Arab League (except Algeria, Iraq, and Lebanon) in 2013 recognized the National Syrian Coalition as the legitimate representatives of the Syrian people.  Britain, France, Turkey, and the United States all recognize the National Syrian Coalition as the legitimate representatives.  Over 100 countries have formally recognized them as such.

History/Background/Timeline of events
·         Syria gained its independence from France in 1946
·         Democracy  in 1954
·         Members of the Ba’ath party wanted an Arab state with Egypt
·         Became a unified Arab state with Egypt from 1958-1961
·         Military coup led by Abd al-Karim al-Nahlawi in 1961 seceded from union with Egypt became Syrian Arab Republic
·         Coup led by Arab Socialist Ba’ath Party ends March 8, 1963 and members of the Ba’ath Party dominate new cabinet
·         Intra-Ba’ath coup in 1966 and installs a civilian government on March 1
·         Bloodless coup led by Hafez al-Assad in 1970 that brings Ba’ath leadership  back together and establishes power of the Ba’ath Party until now
·         2000, Constitution of Syria is amended lowering minimum age of the President, Bashar al-Assad runs for President, unopposed
·         2001- Damascus Spring from July 2000-August 2001, arrest of leading activists
·         January 26, 2011, Hasan Ali Akleh set himself on fire, inspired by Tunisian Mohamed Bouazizi’s suicide protest
·         February 4-5, 2011, Day of Rage, hundreds of Syrians march in Al-Hasakah, Hasan Ali Akleh’s hometown, Syrian security forces arrest dozens
·         March 15, 2011, protests take place in major cities, Daraa is the main city
·         March 25, 2011, 20 protesters reported killed in Daraa; protests spread to other cities and the death toll climbs to 70
·         March 27, 2011, 200 political prisoners are released by the Syrian government
·         April 2011, U.S. imposes sanctions on Syria
·         April 22, 2011, 112 demonstrators killed during anti-government protests; activists call it the Good Friday Massacre
·         May 2011, Syrian army enters Baniyas, Hama, Homs, Talkalakh, Katakia, and Al-Midan and Douma districts of Damascus
·         June 6, 2011, 120 Syrian security force members are killed in Jisr al-Shughour
·         June 20, 2011 Bashar al-Assad promises reforms and new parliamentary elections
·         June 30, 2011, protests in Aleppo
·         Mid-July, 2011, pro-government protesters attack U.S. and French embassies in Damascus
·         July 31, 2011 security forces kill 136 in Hama; Arab League and several Gulf Cooperation Council members condemn the Syrian government
·         August 30, 2011, security forces kill 9 people during the Eid ul-Fitr celebration
·         November 3, 2011, Arab League peace plan is accepted by Syrian government
·         December 19, 2011, security forces kill 70 army defectors
·         December 23, 2011, suicide bombs hit security facilities in Damascus killing 40
·         February 4, 2012, Syrian government forces launches attack in Homs killing 200
·         April 12, 2012, Syrian government and the Free Syrian Army agree to U.N. backed ceasefire
·         April 15, 2012, reports of ceasefire violations emerge
·         April 21, 2012, UN Security Council adopts resolution 2043 for United Nations Supervision Mission in Syria
·         April 25, 2012, 71 deaths in Hama after rocket strikes
·         May 1, 2012, UN places blame on both sides for ceasefire violations
·         May 30, 2012 Free Syrian Army sets a 48 hour  deadline for Bashar al-Assad to agree to an international peace plan; 57 soldiers die in Syria
·         June 6, 2012, 78 civilians die in al-Qubair after government shelling
·         June 22, 2012, Syria shoots down a Turkish fighter jet; Turkey vows retaliation and NATO condemns act
·         June 27, 2012, Syrian opposition fighters attack a military facility and pro-regime television station
·         July 3, 2012, Human Rights Watch reports Syria has torture as a state policy against civilians
·         July 19, 2012, Russia and China veto a U.N. Security Council resolution that would have placed new sanctions against President Bashar al-Assad’s regime
·         August 5, 2012 Syria’s Premier defects citing genocide
·         September 4, 2012, U.N. reports 100,000 people fled Syria in August of 2012
·         September 15, 2012, U.N. envoy warns Syria conflict is threat to world peace
·         September 7, 2012, France announces they will fund Syrian opposition
·         November 13, 2012, France recognizes National Syrian Coalition
·         November 20, 2012 Britain recognizes Syrian opposition
·         December 11, 2012, U.S. recognizes Syrian opposition
·         January 6, 2013, Assad announces new peace plan
·         May 17, 2013 Obama rules out unilateral action on Syria; Moscow confirms weapons supply to Syria; Human Rights Watch says it found government torture rooms
·         Human Rights Watch reports 4,300 civilians killed in Syrian airstrikes
·         United Nations reports that 93,000 have been killed in Syria

United States reactions
·         May 18, 2011 Imposed sanctions on Bashar al-Assad and six other senior Syrian officials; additional sanctions were imposed by the Treasury Department against Syrian intelligence services
·         Secretary of State Hillary Clinton stated al-Assad had lost legitimacy
·         July 31, 2011, President Barack Obama stated that the United States will stand with the Syrian people
·         August 10, 2011, new sanctions were imposed on Syrian telecom companies and banks
·         August 18, 2011, President Obama issued a written statement asking al-Assad to resign; an executive order was issued blocking property of the Syrian government, banning new investments or exporting services to Syria, and bas imports of Syrian-origin petroleum or petroleum products
·         August 20, 2012, President Obama warned that the use of chemical weapons in Syria would be a red line
·         June 13, 2013, the Obama administration announced it would be shipping small arms to Syrian rebels citing clear evidence that the Syrian government had used chemical weapons
Peace plans

Arab League peace plan:  the goal was to halt the crackdown on protesters, allow observers in the country, and issue a ceasefire.  The ceasefire broke down.  On December 19, 2011, the Syrian government allowed observers into the country.  As part of the plan, the Syrian government also released 3,500 prisoners. 
UN resolution proposal: The Arab League asked the UN Security Council to adopt a resolution, based on the Arab League’s plan, including a call for al-Assad to step down.  Russia and China vetoed the resolution.  A non-binding resolution was later agreed to, but Russia and China voted against it.
Russian proposal: Russia announced its own peace plan that calls for al-Assad to cede power.  There were informal talks in Moscow on January 30, 2012.
Kofi Annan peace plan:  offered a six point plan to end the conflict. Points were as follows:
1.       Find the concerns of the Syrian people and address them
2.       Commit to stop the fighting on both sides; the Syrian government should commit to immediately ceasing troop movements and end the use of heavy weapons
3.       Ensure timely provision of humanitarian assistance
4.       Release peaceful political prisoners
5.       Ensure freedom for journalists
6.       Respect for freedom of protest

U.S.-Russia peace proposal: Joint proposal issued in May 2013, joins to a series of Middle East peace proposals. Tries to find a diplomatic solution to the conflict.

Updates on Syria:

Support from Russia, Iran, and Hezbollah have helped President Bashar al-Assad and the Syrian government to reverse the gains made by the opposition

The Syrian military has intensified their attacks in the Idib province while have reportedly been advancing into insurgent strongholds, such as Jobar, Qaboun, and Harasta.

Divisions among the opposition groups have deepened. Recently, members of al Qaeda linked groups reportedly killed Kamal Hamami, a member of the Free Syrian Army’s Supreme Military Council.  Members of Islamist militant groups, including al Qaeda linked groups, fight alongside other Syrian rebels, including the Free Syrian Army.  Members of al Qaeda linked groups have been blamed for several assassinations of more moderate rebel units.  Members of the Islamic State were accused of beheading two Free Syrian Army fighters.  As the Syrian government has pushed back advances by the opposition, infighting between the opposition has increased with a series of killings and kidnappings.    

Growing uncertainty with the various opposition groups and distrust from much of the West.
The conflict seems to be growing.  Mohammad Darra Jamo, a commentator who worked for Syrian state media, was assassinated in Lebanon.  The Israeli army has reported that Syrian suspects infiltrated an unmanned military post on the border between Syria and the Golan Heights. A car bomb exploded in the heart of the Hezbollah territory, growing fears that the spillover from the Syrian conflict will go to other countries, too.

The United Nations has estimated that the number of people fleeing the conflict in Syria has risen to an average of 6,000 per day during 2013. 

British newspaper reports say Prime Minister David Cameron has retreated from the idea of arming Syria’s rebels

Increased concerns in the Western world that weapons supplied to opposition could land in the hands of anti-Assad Islamist fighters with al Qaeda.

British newspapers report that British military commanders advised Prime Minister Cameron that sending small arms would not sway the conflict

A French diplomat reported that it would only send arms if they can be certain it will not strengthen Islamist fighters

Obama administration planned to use the CIA to covertly train and arm the rebels.  The training has not started due to concerns by Congress.

Concerns about arming the Syrian rebels:

The Free Syrian Army is an umbrella organization; there are hundreds of different groups are under that umbrella.  Not all of the battalions are under the command of General Salim Idris (who has been identified as its chief general of the opposition).  Most of the more organized and well-equipped factions reside in the north and the lesser groups are in the south.  Moderate rebel groups often fight alongside more extreme or Islamist groups.  There is not a way to completely distinguish that the arms will only be used by non-al Qaeda linked groups.

There have been some reports of “moderate” rebel groups have sold some weapons they have received to more extremist groups, in order to make more money, in an attempt to buy different weapons.  Even if there is a guarantee that the weapons are being delivered to the “good” rebel groups, there is not a guarantee that is where they’ll stay.

Qatar has been suspected of supplying heat-seeking shoulder fired missiles to Syrian rebels.  The Obama administration warned of keeping these missiles away from the Syrian opposition.  These shoulder fired missiles found their way to rebel groups, such as Jabhet al-Nursa (known as the Nursa Front), which have al Qaeda links.  Qatari officials assured the Obama administration that they were not arming the hardline Islamist groups. 

There are concerns that rebel groups that receive arms are less likely to reach cease fire agreements.  
According to a study done on civil wars, rebel groups that receive external support from a third party lasted significantly longer than civil wars that did not receive external support.  Governments are typically less likely to offer opposition a peace settlement when there is foreign support for the opposition. 

Friday, July 26, 2013

Random briefings in Washington, D.C.: National Journal Live Policy Summit: Health Care Reform Innovation

Part of my internship in Washington, D.C. entitles me to attend briefings, hearings, etc. to learn more about various topics.  I'm supposed to write a memo each time I go to these. To be nice to everyone, I will share the notes that I take at these briefings.  Maybe you'll learn something from them.  They're fairly interesting but fairly long.

NationalJournal Live Policy Summit: Health Reform Innovation: New Concepts in Care Delivery

Maria Harris Tildon: Senior Vice President, Public Policy & Community Affairs, CareFirst BlueCross BlueShield

Neera Tanden: President, Center for American Progress, former senior advisor for health reform at the Department of Health and Human Services

Bruce Bagley: Interim President and CEO, TransforMED

Chet Burrell: President and CEO, CareFirst BlueCross BlueShield

Marci Nielsen: CEO, Patient-Centered Primary Care Collaborative (PCPCC)

Kavita Patel: Fellow and Managing Director of Delivery System Reform and Clinical Transformation, 

Engelberg Center for Health Care Reform, The Brookings Institution

Purpose: When President Barack Obama spoke about the Affordable Care Act, he described that one of his goals was “bending the cost curve downward.”  By focusing on delivery system reform, these goals may be achievable; it may ease financial pressure on Medicare, and make healthcare reform more likely to succeed.

Information, problems, and  proposed solutions:   

Accountable Care Organizations. Accountable Care Organizations (ACOs) are home medical programs that link insurance payments to healthcare providers to the quality of care they deliver.  Typically, ACOs care for a group of patients and aim to reduce costs for a population of patients. Providers receive more provider reimbursement based on the quality of care and the total reductions in the total cost of care for the population of patients.  BlueShield of California has over 40,000 patients in their ACO program and has saved more than $15 million since its inception.  There is a concern that there will be too much concentrated power with ACOs.

Patient-Centered Medical Home (PCMH). PCMHs are a type of ACO.  The concept of a PCMH is to embrace the relationship of patient and physician and make it, as the name suggests, patient-centered.  Typically there is a team of health care professionals who are assigned to a certain group of patients.  The health care professionals focus on the entire well-being of a patient, instead of focusing on the specific ailment. The panelists held up PCMHs as a model that works in the real world. Tanden stated that for every $1 spent on PCMHs, yields $1.50.  Since PCMHs are responsible for the overall well-being, they keep all of the medical data and all of their patients and have to be able to access it at all times.  The primary care physicians involved in PCMHs , when referring to specialists have to choose when to refer to a specialist, who to refer to, and why.  CareFirst found that the physicians would try to find the specialists’ quality of care and the cost of the specialists.  People are concerned that physicians may choose lower cost specialists who may provide less quality with their care.  CareFirst has not seen that much of it happening.  They argue that their physicians are shopping wisely. 

Bundled payments. Commonly referred to as episode payment, it is the reimbursement of health care providers on the basis of expected costs for clinically-defined episodes of care.  It is the middle ground between fee-for-service reimbursement and capitation. The panelists would like to see guidelines established the accepted costs for each episode and then nuance the payments based on the sickness/ailment. Out of the various suggestions for delivery system reform, the Congressional Budget Office (CBO) has the most optimism for bundled payments.  The elimination of fee for service for everyone is probably not realistic.  Getting Medicare patients off of fee for service has been encouraged.  The problem seen with bundled payment at this time, is the lack of transparency from health care providers in terms of cost for each episode.  Another concern is that doctors could monopolize prices, without releasing the information about how much it should really cost.

The Center for Medicare & Medicaid Innovation (CMMI). CMMI supports the development and testing of innovative health care payment and service delivery models. CMMI can stand to be more aggressive with its use of ACOs and bundled payments.  CMMI did issue a grant to bring more Medicare patients into the PCMH model.  The panelists believe that while CMMI is critical to health care reform, we may not be able to keep it at the national level and might have to find more reforms locally and at the state level.

Workforce problems/solutions. There has been estimates, that because of the people who are going to be insured for the first time that we will need 50,000-80,000 more primary care physicians. The panelists would like to see appropriate care taken care of at the appropriate place.  They argue for more teamwork between professionals and patients, with an understanding that patients are only patients when they are actually in the health care office setting and have a real life outside of having their ailments. The panelists suggest that we should have a real discussion about skill-task realignment.  Additional training given to various health care professionals may reduce the demand for primary care physicians. Another suggestion is that by focusing on the overall well-being of the patients, we might also reduce the demand of primary care physicians.

Healthcare costs. Healthcare costs have fallen and there is much debate over what is the chief cause of this decrease in costs.  Some argue that it’s some of the reforms that have been rolled out and others say that it is because of the great recession.  Most agree that it is a combination of the two. 

CareFirst. CareFirst has a PCMH program that serves about 1.2 million people.  There are about 420 panels, primarily made up of 8-10 (no more than 15) Primary Care Physicians who serve them.   CareFirst is focused on primary care being done in an effective and responsible way. It Is team-based rather than hero-based. Each panel is responsible for the aggregate costs and well-being of each patient.  CareFirst requires the panels to have a global budget and will cover the cost of every visit made by every patient.  Each visit is debited to the panel.   The panels are encouraged to not schedule unnecessary services because of this.  The Primary Care Physician Panels are encouraged to focus on the well-being of the patients because they get added pay (certain percentage of the money saved) if they come in under budget.  The physicians also receive extra for coming up with health care plans for their patients to help them stay healthy.  They found that 94% of the costs were to specialists.

Overall health care reform. The panelists believe that we are close to an overall behavioral change between patients and physicians within the next 3-5 years.  There are arguments that we should give states and localities more flexibility to achieve similar outcomes.  All of the panelists agree that there is not one universal model that is going to be perfect, but rather we should focus on a combination of reforms. 

Thursday, July 25, 2013

A super long post about Postal Service Reform

I have been working in a Congressional office working on Postal Service reform.  It's not the sexiest topic by any means.  I had a lot of fun with it.  Here is basically my project.

Priorities for United States Postal Service (USPS) Reform:
·         Maintain six-day delivery
·         Reduce debt by USPS and return the USPS to viability
·         Solve or reduce debt caused by the Retirement Health Benefit Fund (RHBF)
·         Stop postal office closures
·         Generate new revenue for the USPS

Relevant Organizations:
American Postal Workers Union (APWU): member of the AFL-CIO, President of the APWU is Cliff Guffey.  APWU represents employees of the United States Postal Service (USPS), who are clerks, maintenance employees, and motor vehicle service workers.  APWU represents more than 220,000 employees and retirees, and nearly 2,000 private-sector mail workers.  Members belong to a local union in their city or town.  Locals elect their own officers and conduct day-to-day business.  These officers report to regional coordinators who then report to the National Executive Board.  The APWU has the APWU-COPA that raises voluntary contributions to assist the campaigns of legislators who support working families.  The APWU’s President has appeared for Congressional hearings on various issues related to postal reform. The APWU gave $3,657,735 in contributions and spent $681,000 on lobbying in 2012.  Most of the money given to candidates in 2012 by APWU was given to Democratic candidates.  The top recipient was Representative Stephen Lynch (MA-09) at $20,000.  The APWU gave $6,000 to Representative Loretta Sanchez in 2012. 

National Association of Letter Carriers (NALC): affiliated with the AFL-CIO, current president is Fredric Rolando.  NALC has 2,500 local branches representing carriers in all 50 states also including, Washington, D.C., Puerto Rico, the Virgin Islands, and Guam.  NALC represents non-rural letter carriers employed by the United States Postal Service.  NALC represents 300,058 active and retired members, 214,084 are active letter carriers.  NALC operates from its national headquarters in Washington with state associations and branches throughout the nation, along with a regional network of national business agents.  NALC gave $3,088,669 in contributions and $240,000 on lobbying in 2012.  Most of the candidates that NALC spent money on in 2012 was Democratic candidates.  NALC gave Representative Loretta Sanchez $8,500 in 2012.    NALC spent the most money on Janice Hahn and Ron Barber whom they spent $20,000 on each. 

National Rural Letter Carriers’ Association (NRLCA): represents rural letter carriers employed by the United States Postal Service, mission is to improve the methods used by rural letter carriers, to benefit their conditions of labor with the United States Postal Service, and to promote a fraternal spirit among its members. NRLCA represents 104,717 members.  NRLCA spent $902,925 in contributions and $500,000 in lobbying in 2012.  NRLCA spent most of its money giving to Democratic candidates.  The candidate who received the most money from NRLCA was Representative Stephen Lynch who received $20,000. 
National Postal Mail Handlers Union (NPMHU):  represents 47,000 active mail handler craft workers who load, unload, prepare, sort and containerize mail for delivery by the United States Postal Service.  The mission of the NPMHU is to come with an agreement with the U.S. Postal Service that establishes wages, cost-of-living adjustments, working conditions, and fringe benefits.  The group is a member of the AFL-CIO federation.  Members of the NPMHU join a local union with jurisdiction in their city, town,  or area.  They work with regional groups and go all the way to a national group which is headquartered in Washington, D.C.   NPMHU gave $417,500 in contributions and $30,800 on lobbying in 2012.  The top recipient was Representative Stephen Lynch who received $20,000.

National League of Postmasters (NLP): Professional and premier organization for postmasters.  Postmaster is the head of an individual post office.  NLP represents the interests of postmasters.  The purpose is to provide a place where postmasters and other members may assist one another in matters connected with their career employment in the USPS. 

National Association of Postmasters of the United States (NAPUS): The larger of the group between the postmasters. NAPUS has 80% of the postmasters in its group. NAPUS has state organizations called chapters in all 50 states and Puerto Rico and the U.S. Virgin Islands. Each chapter has elected and appointed officers. NAPUS spent $382,807 on contributions and $190,000 on lobbying in 2012. They gave JoAnn Emerson $9,500 and Steny Hoyer $9,500 in 2012. Those were the two highest recipients of NAPUS money.

National Association of Postal Supervisors (NAPS): Management association representing first-line supervisors who work both in facilities where postal employees process and deliver mail, to mid-level and senior managers in every functional area of the Postal Service as well as postmasters. NAPS has branches in all 50 states, Guam, Puerto Rico, and the U.S. Virgin Islands. NAPS spent $593,650 on contributions to candidates and $80,000 on lobbying in 2012. NAPS spent $20,000 on contributions to Rep. Stephen Lynch who was the largest recipient for contributions from NAPS.

Action during the 112th Congress by Rep. Loretta Sanchez

On August 4, 2011, Representative Stephen Lynch (MA-9) introduced H.R. 1351, the United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011.  Representative Loretta Sanchez had signed on as a co-sponsor on 06/21/11.  H.R. 1351 attempted to amend provisions for calculating the amount of the postal surplus for the supplemental liability under the Civil Service Retirement System.  If there was a surplus after recalculating the supplemental liability, they would transfer it to the Postal Service Retiree Health Benefits Funds.  Despite a total of 230 co-sponsors for the legislation, H.R. 1351 died in committee.
H.R. 1351 was supported by the following groups: NAPS, APWU, NALC, NPMHU, NLP, NARLCA, and NAPUS.

Representative Sam Graves (MO-1) introduced H. Res. 137, expressing the sense of the House of Representatives that the United States Postal Service should take all appropriate measures to ensure the continuation of its 6-day mail delivery service.  Representative Loretta Sanchez signed as co-sponsor on 03/16/11.  H. Res. 137 urges the United States Postal Service to take all appropriate measures to ensure the continuation of 6-day mail delivery service.  H. Res.  137 had 222 cosponsors but still died in committee.
H. Res. 137 was supported by the following groups: NAPS, APWU, NALC, NPMHU, NLP, NARLCA, and NAPUS.

H.R. 466, to amend title 39, United States Code, to extend the authority of the United States Postal Service to issue a semipostal to raise funds for breast cancer research was introduced by Representative Joe Baca (CA-43) on January 26, 2011.  Rep. Loretta Sanchez signed as a co-sponsor on 03/02/11.  H.R. 466 would have extended for four years, the authority of the USPS to issue a semipostal to contribute to funding for breast cancer research.  H.R. 466 had 141 cosponsors and died in committee.

H.R. 6121, the Victory for Veterans Stamp Act of 2012 was introduced by Representative John Larson (CT-1) on July 12, 2012.  H.R. 6121 would have created a stamp that gives money from the proceeds equally to the post office, the postal debt, and to help veterans.  Rep. Loretta Sanchez signed as co-sponsor on 07/12/12.  H.R. 6121 received 116 cosponsors and died in committee. 

Congressional Action during 112th Congress
There have not been any bills related to postal reform that have been passed by Congress.  The only bills that are even partially related are bills to re-name post offices.  The biggest pieces of legislation that have been attempted to have been passed are as follows:

H.R. 2309 Postal Reform Act of 2011: Establishes the Commission on Postal Reorganization, requests reduction of mail service days from 6 to 5, imposes a limitation on USPS contributions to postal employees' health and life insurance premiums, gives power to the PRC to negotiate with the USPS on almost all issues.  Rep. Loretta Sanchez did not co-sponsor this legislation.  This legislation was not supported by any group.  This legislation died in committee.

H.R. 2967 Innovate to Deliver Act of 2011: Provides nonpostal services using USPS infrastructure, invest excess money of the CPF. Rates and fees are at least equal to the costs of providing postal services. Revises prepayment schedule of Retiree Health Benefit Fund to allow amortization of payments over a longer period.  Rep. Loretta Sanchez did not co-sponsor this legislation and this legislation was not supported by any group.

H.R. 1351 United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011: Rep. Loretta Sanchez co-sponsored this legislation.  See Action by Loretta Sanchez for more information.

Key Members of Congress
Representative Darrell Issa (CA-49): Chairman of the House Oversight and Government Reform Committee since 2011. As leader of the committee that oversees any legislation related to postal reform, he holds a lot of sway with how the legislation is formed or completed. He introduced the Postal Reform Act of 2011 and Postal Reform Act of 2013. He has been talked about wanting to privatize the Postal Service. While the Postal Reform Act of 2013 has some concessions from the Postal Reform Act of 2011. His bills have been criticized by almost all interest groups related to postal reform as not doing enough to stop the pre-funding requirements, as well as trying to end the the six-day delivery of mail.  It remains to be seen if his legislation tackles any of the key priorities of postal service reform.
Key legislation: H.R. 2748 Postal Reform Act of 2013, H.R. 2309 Postal Reform Act of 2011

Representative Stephen Lynch (MA-09): Member of the House Oversight and Government Reform Committee, ranking member of the Federal Workforce, U.S. Postal Service, and the Census Subcommittee. Lynch's top contributors to his campaign are interest groups for the postal service, including the APWU, NAPS, NPMHU, and NRLCA. Lynch's legislation that he has introduced on postal reform has been praised by various postal interest groups. They have been extremely popular with all of the major groups. Rep. Loretta Sanchez has co-sponsored the bills that Lynch. He has worked on legislation that preserves the viability of the Postal Service, including six-day delivery of mail. Lynch has also put legislation out there to recalculate pension overpayment and a way to re-pay some of the debt that the Postal Service has racked up.
Key legislation: H.R. 961 United States Postal Service Stabilization Act of 2013, H.R. 1351 United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011

Representative Elijah Cummings (MD-7): Ranking member of the House Oversight and Government Reform Committee. Cummings has done work to compromise between Republicans and Democrats to help produce legislation that might get passed. Cummings legislation in postal reform focuses on more revenue production for the postal service, trying to focus on flexibility. But interest groups generally do not completely support his legislation because he also talks about workforce realignment and does not focus on the pension or RHBF.
Key legislation: H.R. 2690 Innovate to Deliver Act of 2013, H.R. 2967 Innovate to Deliver Act of 2011

Action during the 113th Congress by Rep. Loretta Sanchez

H.R. 262, the Multinational Species Conservation Funds Semipostal Stamp Reauthorization Act was introduced by Representative Michael Grimm (NY-11) on January 15, 2013. Rep. Loretta Sanchez signed as cosponsor when it was introduced.  H.R. 262 would reauthorize the Multinational Species Conservation Funds Semipostal Stamp and has been referred to the House Natural Resources and the House Oversight and Government Reform Committees. 

H.R. 630 Postal Service Protection Act of 2013 was introduced by Representative Peter DeFazio (OR-4) on February 13, 2013.  Rep. Loretta Sanchez signed as co-sponsor on 03/07/13.  H.R. 630 recalculates and restores retirement annuity obligations of the United States Postal Service, eliminates the requirement that the United States Postal Service pre-fund the Postal Service Retiree Health Benefits fund, place restrictions on the closure of postal facilities, and creates incentives for innovation for the United States Postal Service.  Or as the NALC puts it, it includes all key provisions to return the Postal Service to financial health in both the short and long terms.  H.R. 630 has been referred to the House Oversight and Government Reform and House Judiciary Committee. 
H.R. 630 is supported by the following groups:  PRC, APQU, NALC, NPMHU, NARLCA, NAPUS, and NAPS. 

H.R. 376 Universal Right to Vote by Mail Act was introduced on January 23, 2013 by Representative Susan Davis (CA-53).  Rep. Loretta Sanchez signed as cosponsor on 04/24/13.  H.R. 376 allows all eligible voters to vote by mail and allows any citizen to request a ballot through the mail in a federal election.  H.R. 376 has been referred to the House Administration Committee. 
H.R. 376 is supported by the NALC.

H.R. 961 United States Postal Service Stabilization Act of 2013 was introduced by Representative Stephen Lynch (MA-9) on 03/05/13 and Rep. Loretta Sanchez signed as cosponsor on 04/23/13.  It has been referred to the House Oversight and Government Reform Committee.  H.R. 961 re-calculates postal surplus in the FERS pension fund using salary and demographic assumptions.  Surplus funds would be used to pay down USPS debt. 
H.R. 961 is supported by the following groups: NAPUS, APWU, NALC, NPMHU, and NRLCA.

H.R. 2459, the Protect Overnight Delivery Act was introduced on 06/20/13 by Rep. Rosa DeLauro (CT-3) and Rep. Loretta Sanchez signed as an original cosponsor.  H.R. 2459 has been referred to the House Oversight and Government Reform Committee.  H.R. 2459 would reinstate overnight delivery standards for market-dominant products.
H.R. 2459 is supported by APWU, NALC, and NRLCA.

Postal Reform Act 2013

Major Points:
·         Modifies the Saturday Delivery Schedule. The Postal Service maintains Saturday delivery for packages and medicines, for at least five years, but phases out delivery of mailing bills and advertisements. 
·         Phases out “to the door” delivery. The Postal Service will begin to stop delivering to the door mail and focus on delivering to clusterboxes and curbside delivery.
·         Brings new managers to manage the Postal Service. Brings in a panel of 5 full-time executives that have a clearly stated goal to turn around the postal service. Once the postal service is able to earn a profit, the panel is then eliminated in favor of the current set-up of the Board of Governors.
·         Changes some rates. Changes rates of postage to cover the cost of postal delivery.
·         Pay and benefits. Requires postal workers to pay the same premium contribution for health and life insurance benefits that other federal workers now pay.
·         Revenue. Allows the Postal Service to sell advertising space on vehicles and facilities.  Also allows the Postal Service to offer state and local services, such as the sale of fishing or hunting licenses.
·         Retiree Health Care Benefits. Starting in 2014, all future payments to the Retiree Health Care Benefits will be based on an actuarial calculation designed to achieve full funding by 2056. 
·         Pension Accounts. Stops projected surpluses in the Postal Service’s pension system from going to pay for the operating losses of the Postal Service, but allows it to be used to pay for other benefits.

Changes from 2011:
·         No BRAC- there will not be a BRAC commission to ensure closure of postal service facilities that are losing money or to ensure that area and district facilities are consolidated. In 2011, there was a commission similar to BRAC to decide if postal service facilities should be closed.
·         Changes the Retiree Health Care Prefunding way of calculating to fully prefund the retiree health care benefit in 2056. In 2011, the bill would have deferred some payments but not set it up for an actuarial calculation.
·         Saturday Package Delivery is Protected. For at least 5 years, the Postal Service would maintain package and medicine delivery on Saturdays.  Other Saturday mail is not protected. In 2011, there was no such protection.
·         Pension surpluses. There would be an annual schedule to use projected pension surpluses to pay the retiree health care benefits, as opposed to a one time change.


The Postal Service, with its median pay of $53,090/year for postal service workers has allowed many workers to be able to reach middle class status even for non-college graduates.  Most jobs for the postal service require only a high school diploma.  According to the Bureau of Labor Statistics (BLS), in 2010, the Postal Service employed 522,144 career employees nationwide and over 8 million total, including 66,356 in California (with 2,637 in CA-46 alone).  Over the years from 2010-2020, BLS estimates a growth rate of -26% for Postal Service workers, which they classify as declining rapidly.  BLS estimates that the Postal Service will lose 138,600 career jobs over the years of 2010-2020.  BLS estimates that that the U.S. economy will add 20.5 million jobs in the same timeframe.  Out of 749 detailed occupations, 657 are projected to grow while only 92 are projected to decline. 

The biggest decrease in revenue by the postal service came from 2008 to 2009.  In 2008, USPS generated $74.9 billion but in 2009, that had fallen to $68 billion.  This was partially caused by the recession while it had started in December 2007, did not take a sharp downturn until September of 2008.  Comparing 2008 to 2009, total mail volume fell by 25 billion, first class mail fell by nearly 4 billion, and advertising mail volume had fallen by 16.5 billion.  During the same time, nearly 40,000 career jobs were lost.  Since 2009, revenue has fallen from $68 billion to $65.2 billion and 100,000 career jobs have been lost. 

In 2006, H.R. 6407 the Postal Accountability and Enhancement Act (PAEA) was passed by the House and Senate and became law.  The PAEA established the Postal Service Retirement Health Benefit Fund (RHBF) and shifted away from the “pay as you go” model of paying for retirement benefits.  The Postal Service was required to prefund the health benefits of current and future postal retirees.  The RHBF was funded with $17 billion from the Civil Service Retirement System (CSRS) and $3 billion that had been put in escrow from the suspension of the annual CSRS payment.  The PAEA required the Postal Service to make annual payments into the RHBF over a ten year period and to pay off the rest of its liability in the years 2017 to 2056.  The Government Accountability Office (GAO) in a recent report titled “Status, Financial Outlook, and Alternative Approaches to Fund Retiree Health Benefits”, stated that the payments to the RHBF were significantly frontloaded.  The fixed payments in the first 10 years exceeded what actuarially determined amounts would have been using a 50-year amortization schedule.  Due to these large upfront payments, the Postal Service has gotten deeper into debt.  Out of the $41 billion that the Postal Service owes, about $33 billion is because of this frontloaded payment schedule.  Taking the RHBF payments out of the equation, the Postal Service operates at a profit in 2007 and 2008, while managing less than $3 billion in the years of 2009 and 2010.  In 2011 and 2012, the debt is $5 billion in each of those years.  Without the payments to the RHBF, the Postal Service lost just over $8 billion from the year 2006-2012.

Postal reform seems unlikely without dealing with the scheduled pre-funding payments for the RHBF.  Almost all union groups agree that the PAEA’s scheduled pre-funding requirements need to be repealed.  Unfortunately, at this time, any legislation concerning the scheduled pre-funding requirements would not pass either the House of Representatives or the Senate.  The Postal Reform Act of 2013 addresses the RHBF by basing it on actuarial calculations designing it to achieve full funding by 2056.  The draft letter for the Innovate to Deliver Act of 2013 cuts pre-funding costs by less than six percent over the next 10 years.  The Office of the Inspector General (OIG) and the USPS have announced a proposal that they call the Seal and Grow Approach.

The Seal and Grow Approach is a variation of the “pay as you go” method.  The USPS would stop prefunding and pay its share of premium payments for retirees as they become due.  The existing fund would be left to grow with interest until the USPS’s liability was fully funded.    The OIG estimates that it would grow from $44 billion to $90 billion in 21 years.  The OIG also stated in a 2009 report that the USPS could pay about $1 billion per year to prefund its retiree health benefits and still achieve the same level of funding.  The OIG found that 38 percent of Fortune 1000 companies prefund retiree benefits at a median level of 37 percent.  The Department of Defense prefunds its retiree health benefits.  While the Department of Defense has a 100 percent target funded percentage, it was funded at just 38%.  The OIG thinks it would be sufficient to prefund at just 30%. 

Easing on the pre-funded requirements for the RHBF is unlikely to pass Congress.  Even if it did pass Congress, there is still a need for the Postal Service to make money to maintain its viability. 

Ensure the appointment of those with extensive large business experience to the Board of Governors of the
United States Postal Service.  Move away from the practice of Senate leaders recommending appointees to the 
board and instead focus on those who have proven track records working in large businesses, non-profits, or 
with working with unions.  Work with the Board of Governors to nominate a Chief Innovation Officer (as called 
for in the Innovate to Deliver Act of 2013) from the Board of Governors.  Finally, make sure that the Board of 
Governors does not have a vacancy on the Board of Governors for any more than 90 days.
·        Allow for the shipping of beer, wine, and spirits as long as it is in accordance with state law.  The general guidelines for shipping alcohol via FedEx would be applied here.  There would need to be an alcohol shipping agreement and identify alcohol shipments.  Some state laws require that there has to be an adult signature at the time of delivery for every package containing alcohol.  Alcohol that is illegal in states (i.e. Everclear) to purchase should not be shipped to states where they are illegal to purchase.  States that have laws prohibiting out of state beer, wine, alcohol would not be shipped to.
·         Allow for the sale of hunting and fishing licenses at Post Offices (as stated in the Postal Reform Act of 2013)
·         Advertising. With over 1 million visitors to the USPS’s website per day and 72,000 visitors per day for the USPS’s mobile website, it would be beneficial to allow for the sale of advertisements on their website.  Advertisements on vehicles could also be beneficial.  Advertisements in facilities could also be added to the list of beneficial revenue streams. 
·         Allow for postal service employees who work at postal facilities to be trained to be public notaries.  In addition to being trained, public notary services will be offered at a competitive fee for the area at postal facilities.
·         Postal service facilities that have extra computers and access to internet can charge for use of the computer and internet such as printing, e-mail, etc.
·        Postal service facilities can charge for the use of a fax machine at the postal service facilities. 
·         Change the charge for delivery of mail to match the charge in CPI for private sector delivery charges.  Doing so would tie postage rates to cost trends in the Postal Service’s industry.
·         Based the payment for the RHBF on an actuarial calculation that is intended to fund the RHBF at 50% over the next 40 years.  Additionally, delay payments to the RHBF until 2017.  Adopt a modified Seal and Grow Approach.    Calculate payment into the FERS pension fund using postal demographics.  Surplus payments into the FERS pension fund can be used by the Board of Governors however they see fit. Surplus payments in the CSRS can be transferred to any way that the Postal Board of Governors sees fit. 
·         Study over the next 90-120 days how the impact of subsidizing payments from political parties, political mailings, etc. will impact the revenue of the postal service.

Personal take:
After watching the markup in the committee of H.R. 2748, the Postal Reform Act of 2013, I think it’s fair to say that actual postal reform is unlikely at this point in time.  It’s possible in the future but there are too many issues where the parties are too far apart on to even agree to simplistic reforms. In the past two Congress sessions, there has not been a bill that emerged from committee to actually voted on by the House.  The bills that got brought to the floor for a vote, somewhat related to Post Office services, were the bills that were naming post offices. 

When I first took on this project, I thought that the only reason that we’ve not come to a postal reform is because we were looking at the reform much too broadly.  There are going to be obvious disagreements, especially since the Democratic Party is focusing on the overpayment of the RHBF, especially the pre-funding requirements of the PAEA.  This is being taken apart by the Republican Party because this issue is the one that is brought up by every union when discussing the reform of the Postal Service.

Unfortunately, the disagreements between the two political parties or the two sides of the argument, we’re looking at a much bigger gap.  In the Innovate to Deliver Act of 2013 that will be introduced by Representative Elijah Cummings, ranking member of the House Committee on Oversight and Government Reform, it will allow for the shipment of beer, wine, and spirits through the Postal Service.  This type of shipping might be able to add marginal revenue to the United States Postal Service.  Two private shipping companies, UPS and FedEx, allow for the shipping of alcohol based on agreements with the company.  They’re allowed to be shipped if they comply with all of the state laws.  For instance, some states do not allow for the shipment of wine.  Both companies require that someone who is over 21 signs for the alcohol.  Representative Blake Farenthold (TX-27) was appalled at such a suggestion during the markup of H.R. 2748.  He claimed that his daughters would have used mail service alcohol to drink underage.  

Representative Farenthold also claimed that the shipping of alcohol was unconstitutional, claiming that part of the repeal of prohibition would prohibit the transport of alcohol across state lines.  Representative Jason Chaffetz (UT-03) is concerned that Utah would be importing too much alcohol into the state that is not in accordance with state laws.  Representative John Mica (FL-07) made the claim that everyone was actually thinking.  He stated that there was no need for the USPS to ship alcohol because there were already private businesses that offered that service.  Unfortunately, there was not a hearing about the shipping of alcoholic beverages by the private shipping companies.  The Postal Service because it is a quasi-government entity has to go through Congressional oversight.  This is just an example of the problems I see with even trivial postal reform.  Obviously, shipping beer, wine, alcohol, and spirits is not going to solve the problems of the Postal Service. 

On the left side of the political spectrum, there has been claims that Representative Darrell Issa is trying to privatize the Postal Service.  This might be true, it might not.  The way he thinks about the Postal Service was made clear during the markup of his Postal Reform Act of 2013 bill.  He stated that the Postal Service was one of the least creative, least flexible organizations in the government.  He went on and claimed that the Postal Service should not offer any service that private businesses already offer.  Representative Jason Chaffetz echoed this claim adding that the reason for this was because the Postal Service enjoys special tax breaks or because they are allowed to subsidize how they ship packages.  But let’s imagine that the Postal Service actually became privatized.  What steps might they take to maintain financial viability?

My guess is that the first step they would take is to deunionize as much as they can.  Most career employees for the United States Postal Service are members of a union.  Largely, because of the union ties, career employees are able to make more money than they would with similar education and work experience.  Deunionizing the postal service would allow those who want to privatize the Postal Service to pay less in actual wages to employees, not to mention benefits.  Also, because of the unions, there are clauses in their contracts to prevent being laid off.  Without the unions, this would also be gone.  Next step, would be to find a way to stop overpaying into a retirement pension fund or to move the money from the pension fund to cover the debt.  The RHBF would likely have been replaced or removed when they deunionized the workforce.  If it was not, they would probably do what other Fortune 1000 companies do and fund the RHBF to about 30-35%.  Then they would look to compete with other private businesses.  They would add advertisements on their websites.  They would sell advertisements on vehicles and facilities.  They would likely sell facilities to the highest bidder (unlike what is happening now) after they were consolidated or closed.  They would likely do most of my recommendations.  But they would definitely try everything they can to make as much money as possible.  I doubt a privatized postal service would not deliver on Saturday.  That is a competitive advantage.  The real question in all of this is, if you want the Postal Service to run like a business, why are you not allowing them to run like a business?

District and State Impact

The historic Orange Plaza Station, the Orange-Olive branch, and the offices in Huntington Beach and Laguna Woods have been at various times been on the short list of postal offices closing.  Seven Orange County Post Offices have had to trim hours over the last year.  Due to these hours being trimmed, part-time jobs are being cut and benefits are being cut for full-time postal workers.  Additionally, full-time workers do not have as much opportunities for overtime.  The employees are required to do the same amount of work in less amount of time.

Entry level jobs for the Postal Service only require a high school education.  With a high mean and median wages for postal service employees, the Postal Service can offer opportunities for those who lack a higher education a chance at achieving middle class status.  Nationally, over 20% of career Postal Service employees are veterans (108,000)

There are 2,637 total employees in the Postal Service in CA-46.   The mean wage for the employees in CA-46 is $57,840.  Overall, in California, there are 66,356 employees for the Postal Service.  The mean wage for Postal Service employees in California is $58,689. There are 21 facilities in CA-46, of which 10 are owned and 11 are leased.  There is an average of 125 Postal Service employees for each Postal Service facility.  There are 1,760 facilities in California, of which 534 are owned and 1,170 are leased.  There is an average of 56 employees per Postal Service facility in California, overall.  The impact of a closure of a Postal Service facility in CA-46 would lose, on average, 125 jobs.  Entry level jobs for the Postal Service only require a high school education. 

Quick Facts:
·         522,144 career employees for the USPS
·         108,000 career employees who are veterans
·         -26% expected growth from 2010-2020, meaning over 100,000 career jobs lost
·         0- number of bills that have been brought to the House floor related to postal reform
·         $787 million, online revenue for USPS in 2012
·         160 billion total mail volume
·         68.7 billion, total first-class mail volume
·         $85 billion, value of USPS real estate portfolio
·         $46 billion, remaining obligation in the RHBF
·         $22 million/day payments into the RHBF
·         $5 billion, amount required per year for the first 10 years by the PAEA to pay into the RHBF
·         $31.9 billion, payments into the RHBF from 2007-2012, out of $40.9 billion in debt
·         $34 million, debt accrued by the Postal Service without RHBF payments
·         $500 million, amount projected to save under POStPlan by replacing 10,000 career postmasters with part-time workers
·         4.3%, amount first-class volumes are down in first quarter of FY2013
·         4.8% amount periodicals are down in first quarter of FY2013
·         10.3% amount that First-class single-piece volumes would fall in the first year of new service standards according to one study.  A later study showed it would be a 2.8% drop
·         19.7%, amount that periodicals would fall in first year of new service standards according to one study, a later study showed it would be a 2.1% drop