Manufactured crisis fuels attack on US Postal Service

Graphic with text Save America's Postal Service

The United States government has manufactured a crisis to accelerate the privatization of the US Postal Service, critics charged after the public post office defaulted on a $5.5 billion payment to the health benefit trust fund on August 1, 2012.

The default was caused by a 2006 decision by the US Congress to force the United States Postal Service (USPS) to pre-pay retiree health benefits 75 years into the future over just a ten-year period, something no other government agency is required to do.  Not surprisingly, the recent default in payment is prompting renewed calls for cost-cutting measures including the outright privatization of the service.

Earlier this year, the US postmaster general, Patrick Donahoe, asked Congress to allow the post office to address its financial burdens by reducing service and eliminating jobs, claiming that reductions in mail volume require revamping the agency. 

A House Republican leadership’s bill to ‘fix’ the Postal Service, introduced by Rep. Darrell Issa (R-CA), requires the USPS to close hundreds of plants, shut tens of thousands of rural post offices, end Saturday delivery, and empower a financial control board to tear up union contracts.

Postal unions oppose the proposed cuts arguing that the problem is not mail volume but the onerous financial obligations imposed on the postal service by Congress and the failure of government to properly invest in changes that would allow the post office to take advantage of new digital opportunities to improve and expand universal service.

“The pre-funding payments — not the Internet and not losses from postal operations — are responsible for 82 percent of USPS red ink since the pre-funding mandate was implemented,” American Postal Workers Union President Cliff Guffey said.

“The postal debacle is a manufactured crisis, and it is being exploited by those who want to privatize the Postal Service.”

The American Postal Workers Union says the public postal system can remain viable in the digital age with substantial capital investment and through the expansion of service into new areas. Some of the services the USPS could offer include: a one-stop shop for many federal, state and local government services; standard e-mail addresses for every physical address; electronic bill payment services for the “unbanked;” computer terminals and high-speed Internet access for rent by the hour or by the minute; and conversion services from paper to digital mail and vice versa.