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.

Observations:

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. 

Recommendations:
·         
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






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