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Thu February 7, 2013
Ending Saturday Delivery, End Of The Post Office?
Originally published on Thu February 7, 2013 10:28 am
MICHEL MARTIN, HOST:
This is TELL ME MORE from NPR News. I'm Michel Martin. Yesterday we told you about how middle class paychecks are feeling the pinch right now for a number of reasons - healthcare co-pays and premiums, rising gas prices, among other reasons. Today we want to tell you who is doing well. And we'll tell you that conversation in just a few minutes.
But first we want to talk about an institution that has definitely been feeling financial pain over the past few years - the United States Postal Service. That is why Postmaster General Patrick Donahoe yesterday announced plans to cut first class mail delivery on Saturday starting in August. Now, to be clear, this would not affect post office hours or package delivery, just mail that comes in envelopes.
We're talking letters and bills and that kind of thing. Cutting off Saturday delivery is expected to save $2 billion a year for the Postal Service which lost nearly $16 billion last year. But like any change, this one is not being universally applauded. So we wanted to talk more about this with two people who have thought a lot about the Postal Service.
Joining us here in our Washington D.C. studio, is William Burrus. He is the former president of the American Postal Workers Union. That group represents the clerks, maintenance workers, and people who maintain Postal Service vehicles. The union had about 200,000 members. Also joining us from Harrisburg, Pennsylvania is Tad DeHaven. He is a budget analyst for the Cato Institute. That's a think tank with a Libertarian philosophy, which is to say they favor limiting the government footprint in the economy and daily life.
Thank you both so much for joining us once again.
TAD DEHAVEN: Thank you, Michel.
WILLIAM BURRUS: Thank you.
MARTIN: So Mr. Burrus, let me start with you. The postal workers union has been adamantly opposed to this change. Why is that?
BURRUS: Well, because it's going to affect a lot of jobs. It's going to affect the American public and postal employees love serving the public. So they don't want to see their service degraded by the elimination of Saturday delivery. It will have an impact upon the citizens that we serve. And the polls that have been conducted don't truly reflect the slice of America that depends upon mail services.
MARTIN: Well, I think you're referring to the fact that the polls indicate - like, for example, there was a New York Times CBS News poll last year, that found that seven in 10 Americans said that they favor the change as a way to help the Post Office deal with billions of dollars in debt. Well, does the union have a position on what the postal service should do to address this huge deficit?
BURRUS: Yes. I no longer serve as president so I don't advise the union on what actions they should take, but my first reaction would be to take a deep breath. This will save approximately $2 billion a year in postal expenses but this move by the Post Service is not to reduce delivery; it's to save money. That's the underlying objective. And the way to achieve that result is to have Congress do its job.
I don't believe that Pat Donahoe really desires to reduce service to the American public, but this is a means of putting pressure on Congress to do what they're supposed to do. They've had legislation in the House for all last year and refused or failed to come up with a solution. And he has few levers to pull to force Congress to do what it's supposed to do by the constitution.
MARTIN: OK. Let's hear from Tad DeHaven. Tad DeHaven, what do you think?
DEHAVEN: Well, the Postal Service has no choice at this point. They've been cutting costs, but they haven't been able to cut costs sufficiently. And as William just noted, Congress has been dillydallying on getting something done. Over the past six years the Postal Service has lost $40 billion. It's maxed out its $15 billion credit limit with the U.S. Treasury and it's reaching the point where it might not even be able to pay all its bills in full.
So something has to give. And I agree that this move is to sort of spur action in Congress. But make no mistake about it - eliminating Saturday delivery is just a Band-Aid. In the long term, you have a permanent decline in the flagship product of the Postal Service and that's first class mail. The revenue simply isn't coming in to pay the bills, including excess labor cost.
Something has to give. And, yes, it's true that this wouldn't bother most Americans, but I would frame this is a matter of choice or perhaps the lack thereof, because you have this government run monopoly. You know, some people might want mail delivery seven days a week. They might want it six. Or one. Or none. But you don't have that choice because of a government monopoly which, ironically, has been completely undermined by the Internet and all these cheaper, more effective, efficient alternatives.
MARTIN: Hold on a second. You know, we talked to a farmer named Willie Adams. He's out in rural Georgia and he said for somebody like him, this really hurts because this is kind of his connection to the world. It's not just about the - you know, they get trade magazines, farmer's magazines, his - the newsletters, you know, market prices for their products.
And I'm assuming that just in speaking with him that he is of an age where, you know, the Internet is really not his connection to the world. So I'll just ask each of you this question. Is that a reasonable - is that enough of a reason for Congress to essentially subsidize this further? William Burrus, what do you think?
BURRUS: No, no, no. The post service has not received any public funds to provide mail service to the American public and is not seeking such now. The federal government is currently holding approximately $12 billion in over-funding to the retirement system and the healthcare payment that is totally beyond the pale is still on the books. And that's an obligation each year of over $5 billion in payment for healthcare for people that hadn't been born yet.
So Congress can do its job and give the Postal Service a level playing field. Permit to operate within the free market and they can provide mail service to the public. They can continue to - not withstanding the impact of electronic communication.
MARTIN: Tad DeHaven, what about that? I mean, William Burrus is making the point that on the one hand Congress expects the Postal Service to act like a business but then they don't treat it like a business. I mean, they impose all kinds of restrictions and demands that they couldn't impose on a private business, and then expect them to compete. Do you think that that's a fair criticism?
DEHAVEN: Oh, there's no doubt about it, the congressional meddling. Look, if I a private company - everybody talks about when they talk about the Postal Service they talk about FedEx and UPS. Can you imagine the CEOs of UPS or FedEx having to go to a congressional committee and ask them to raise or lower the prices of their products or to change their schedule?
They'd be out of business tomorrow. And there's no doubt it, the congressional meddling, but, you know, this is interesting because William brings up the same canard that his outfit's been using, and that's this retiree healthcare benefit issue. And Congress passed a law in 2006 to force them to pay for this unfunded liability. Now they bottom drops out of the economy and they've obviously had trouble making those payments.
But they frame it as, well, it's not fair because nobody in the private sector has to do that. It's not fair because the federal government doesn't have to do it. Well, here's what they don't acknowledge. That retiree healthcare benefit, that's a benefit that very few people in the private sector even get anymore. And that kind of gets to one of the problems - is you have these excess benefits, excess costs, and you have to reduce them.
The solution from William and the union is, well, just pay as you go, even though the Postal Service is going broke.
MARTIN: Hold on a second. That's Tad DeHaven. He's a budget analyst for the Cato Institute. That's a Libertarian think tank. We are talking about plans for the Postal Service to cut mail delivery on Saturdays. Also with us is William Burrus. He's the former president of the American Postal Workers Union. We invited him to give additional perspective.
William Burrus, I assume you want to answer that.
BURRUS: Yes. That's red meat. Yes. Certainly, if you impose upon the Postal Service an obligation to prefund health care - future health care obligations, you hasten its demise.
I mean, you impose a $5 billion payment on it annually that is not imposed on any other institution, including Congress. Congress receives the same benefits as the employees of the Postal Service. Even Postal employees pay a greater contribution of the employee share than the Congressman do, but...
DEHAVEN: But, William, why won't you acknowledge that this is a benefit that very few private sector workers get?
BURRUS: Well, with the Affordable Health - with the Obamacare, it will be expanded in the private sector, that employees in the private sector will be receiving health care.
MARTIN: Well, how about this, Mr. Presnell? One thing I did want to point out, though, is that, you know, we're sort of informally canvassing the folks who work with us and, obviously, this is a specific, you know, population. They tend to be, you know, pretty young, very tech savvy and so forth. I have people on my staff who say that they haven't opened their mail in a month because they don't need to. They pay all their bills online. They do just about everything online or they don't even need to get to a computer. They can pay their bills off their smartphone. You know, given that, wouldn't you just argue that something has to change?
BURRUS: No, no, no. I think those comparisons are false, because the people that do rely upon the mail service system are American citizens, as well. And their access to the mail system should not be influenced by their neighbors who may or may not need mail service. They have the same rights of communicating with the world as those that are keyed in electronically. So no. I don't think it should be determined by a poll whether or not 51 percent or more don't need mail service. That 49 percent that continue to rely upon it, particularly those in the rural areas of this country - they rely - that's their only link to the outside world.
And it's been over - well, it's been the entire history of the United States. We brought our mail system from England into the United States and copied it, so it predates the United States of America.
MARTIN: OK. Tad DeHaven, final thought from you. What's a socially fair, as well as financially viable, way to address this? And you have a minute to answer that important question.
DEHAVEN: You have to give people choice. And there seems to be this misunderstanding that, if the Postal Service doesn't deliver the mail, nobody will. Look, this is the 21st century. If people want mail, they'll get mail. They might pay more. They might pay less. It depends on what they want because, right now, we have this one size fits all model where the price of a stamp is the same, universally, and there's six day delivery. Let people decide what they want and those people living in rural areas - again, maybe they want it one day a week. Maybe they want it seven. They're also choosing to live there, so maybe it will be more expensive. I don't know.
We have all these wonderful Postal employees out there who, I think, in a private market, would create an opportunity for them to go out and provide these services and be the entrepreneurs of the 21st century...
DEHAVEN: ...on new and innovative means of mail delivery.
MARTIN: All right. We have to leave it there for now. We have to leave it there for now because time is the one thing they are not making any more of, can not deliver it by any means.
That was Tad DeHaven. He's a budget analyst for the Cato Institute. That's a libertarian think tank here in Washington, D.C. We reached him in Harrisburg, Pennsylvania. Also with us in our D.C. studios, William Burrus, the former president of the American Postal Workers Union.
Gentlemen, thank you both so much for a spirited conversation.
BURRUS: Thank you.
DEHAVEN: Thank you, Michel.
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MARTIN: Coming up, the stock market's been soaring, but not everybody's included in the party. We'll talk about why a market rebound has not fueled a middle class recovery. That's coming up next on TELL ME MORE from NPR News. I'm Michel Martin.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.