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Obama’s FY2013 budget calls for eliminating a day of delivery starting in January
by NALC President Fredric V. Rolando
Feb. 13, 2012 — President Barack Obama today released his budget for Fiscal Year 2013. Of specific concern is the call for giving the USPS the authority to reduce mail delivery service from six days a week to five as soon as early as January 2013.
“Eliminating Saturday delivery is a counter-productive proposal that would degrade services to the public and to businesses, threaten the viability of the Postal Service itself, and begin to dismantle the universal network that has served the country well for 200 years,” NALC President Fredric V. Rolando said.
“Among those who would be most affected are residents of rural communities, the elderly, those who need medicines or other goods on weekends, not to mention small businesses, which are open weekends and need to send and receive financial documents—and which create two-thirds of all new jobs. Eliminating Saturday delivery would pose additional costs on all who are compelled to contract with expensive carriers. Taxpayers wouldn’t save a penny, because they don’t fund the Postal Service; USPS earns its own money by selling stamps and services.
“Even from a strict business standpoint, cutting Saturday delivery is a nonsensical proposal. Sacrificing 17 percent of service to save 3 percent of the budget is not a rational business formula. This would only drive customers away and further reduce revenues.
“In particular, it would jeopardize the Postal Service’s ability to capitalize on the growing business of delivering the goods that people order online. Increasingly, the Postal Service is providing last-mile delivery of those packages for UPS and FedEx, because its universal network allows it to do so more efficiently.
“Last week’s quarterly financial statement by the Postal Service illustrates this perfectly. Postal Service Chief Financial Officer Jim Corbett announced a net operating profit of $200 million delivering the mail in the first quarter of Fiscal Year 2012, an impressive performance the CFO said was in part ‘driven by strong growth in online merchandise sales’—up 7 percent over the first quarter of the previous year. That shows the potential for growth offered by the Internet.
“The best day to deliver those packages? Saturday, when people are home.
“The real financial burden facing the Postal Service is not in providing first-class service to the public, but rather the congressional mandate that the USPS—alone among all government agencies and private firms—pre-future retiree health care benefits for the next 75 years and do so within a decade. The resulting annual payments of $5.5 billion account for more than 85 percent of all the Postal Service’s red ink.
“Last quarter, the $200 million operating profit turned into massive red ink largely because of the $3.1 billion in pre-funding charges the Postal Service reported. This is a problem that Congress created and that Congress could fix immediately.
“It’s unfortunate that President Obama has bought into the postmaster general’s push to start to dismantle the universal network, and we will work with our friends in Congress, our customers and our allies in the business community to strike this proposal from the budget before it comes up for a vote.
“The president deserves credit for addressing pre-funding in a short-term manner in his budget, but this is a long-term problem that requires a durable fix.
“The U.S. Postal Service remains the most-trusted federal agency in the country, six years running. It provides the most affordable postal service in the industrial world. It is the centerpiece of a $1.3 trillion mailing industry that employs 7.5 million Americans in the private sector, jobs that depend on a robust Postal Service. At a time of mass joblessness, we should not put those jobs at risk needlessly. Congress needs to do its job by removing the crushing burden of the pre-funding payments so the Postal Service can continue to serve the public. H.R. 1351, which now has a bipartisan House majority of 228 co-sponsors, addresses this issue—and Congress should vote on it. In the Senate, S. 1853, a postal reform bill, recognizes the value of maintaining six-day service and moves to make that service level the law.”