With permission from: The National Memo

http://www.nationalmemo.com

Financial Crisis Pits Workers Against Republicans In Postal Showdown

Matt Taylor

Saving the Post Office from financial ruin might seem nearly as hopeless as running for president on the Green Party ticket -- but this time Ralph Nader, lifelong consumer advocate and perennial presidential candidate, has the numbers on his side.

While Congress considers closing post offices and drastic cutbacks in mail service because the United States Postal Service appears to be going bankrupt, Nader insists that the real cause of the agency's distress is fiscal discrimination embodied in a 2006 law requiring the USPS to "prepay" 75 years of health benefits for its workers by 2016. "People were never informed about these huge prepays," he told The National Memo. "No corporation is ever prepaid like that. No government agency ever prepays like that. The federal government owes the USPS $80 billion. And now we’re on the brink."

Misconceptions about the Postal Service abound, according to Nader, who notes that the agency been fiscally independent since the old Post Office was reorganized as the U.S. Postal Service more than 40 years ago -- and forced to rely solely on stamps and postage for revenues. "It hasn’t taken a dollar in tax money since 1970," notes Nader. "What private corporation can say that? What Wall Street corporation can say that? What oil company can say that?"

The Postal Service confronts an immediate shortfall of $5.5 billion, which must be contributed to its healthcare fund by September 30 -- money that Nader says the USPS would have readily available, were it not for those burdensome prepayment requirements.

What Nader does not mention is that the Postal Service has seen a decline in mail volume over the last two decades, owing mainly to email and other technologies that allow bills to be paid online and messages to be received digitally. And that decline seems likely to accelerate in years to come.

"I believe the postal service has passed a tipping point in terms of falling revenues," said R. Richard Geddes, associate professor of policy and management at Cornell University and an expert on postal issues. "That’s because of the increasing use of and comfort with electronic document delivery over the Internet. The Postal Service's mail volume has dropped almost 25 percent since its peak in 2006. That’s an enormous decline in mail volume we haven’t seen since the Great Depression. I believe we’re in a period of fundamental structural change, where its mail volume and revenues are going to continue to decline."

In fact, the 2006 law was meant to shore up financing by relieving the USPS of some pension liabilities while providing for a smaller annual contribution toward eventual retirees' health benefits. But the recession that quickly followed led to a massive drop in postal revenue.

So the Postal Service has structural problems -- a declining revenue stream as fewer use regular mail and especially first-class postage -- and competitors springing up left and right that face fewer restrictions on their ability to innovate as private corporations. But the immediate crisis is indeed a result of the 2006 Postal Accountability and Enhancement Act and its unprecedented financial requirements, which postal union leaders believe were designed to conceal massive federal deficits of the Bush years.

"The federal government has used the USPS as a means of hiding its deficit by implementing the 2006 law to prefund," said Sally Davidow, spokeswoman for the American Postal Workers Union. "The whole purpose is to make the federal deficit look smaller," she said, by transferring revenue into federal coffers from an independent agency.

By removing the burdensome prepayment requirement, Congress could lift the USPS out of its immediate fiscal hole, and prevent the regressive pain that might be inflicted as a consequence. Some Americans depend on the USPS far more than others, as Nader also points out. Ending Saturday delivery and closing regional offices, for instance,"hurts rural people, hurts the poor, hurts the elderly who aren’t Internet-connected," he said.

As the second largest civilian employer in the country, moreover, the Postal Service is "the main source of decent middle class wages with security for minorities," said Nader.

Yet to critics, the Postal Service appears to be an antiquated institution operating in a radically new media landscape -- and one that hasn't always changed with the times, for worse and in some ways for better. "The USPS has a universal service obligation, has to serve everybody. That’s part of the deal," said the APWU's Davidow. "They have to deliver to rural areas, poor areas where people don’t have other communication. UPS and FedEx aren’t required to go to sparsely populated areas."

The Obama administration reportedly will seek additional time beyond Sept. 30 for the USPS to make its $5.5 billion annual payment for future beneficiaries. But Rep. Darrell Issa, the California Republican Chairman of the Oversight Committee in the House, wants legislation to renegotiate collective bargaining agreements in order to remove worker protections and make way for some 200,000 layoffs and additional office closures -- which Postmaster General Patrick Donahue has said will be necessary for the USPS to remain viable.

"I firmly believe a big part of what’s going on here is that this is part of the assault on public workers," Davidow said, referring to collective bargaining restrictions legislated in several states since the Republican sweep in the 2010 midterm election. "And there are people who would like to privatize the Postal Service. The potential for profits is in certain specific areas where there’s a high population concentration and high volume."

To resist the proposed layoffs, postal workers rallied nationwide at regional Congressional offices on Tuesday. But this may only be the beginning of a long and bitter battle between Congressional Republicans and one of the largest forces of unionized workers in the United States.

Comments

[Antonio Andolini]

I never thought of the mailman as a member of "one of the largest forces of unionized workers in the United States."

[Rocky]

Surprise, surprise, surprise! Without the USPS I doubt UPS or Fed X would have ever started, it allowed those private companies to skim off the more profitable sectors of the parcel delivery sector.There's no money delivering that PSNH invoice to Mr. Smith in Errol or Dummer. There is a role for Government in society. Rural Electrification is another example.

[Antonio Andolini]

Yes, and when the Internet reaches all of us throughout the North Country, PSNH will just email the invoice.
Have you really gone off the grid, if you still surf the Net?

[jon]

Just received an email from the company that has taken many of PSNH's largest industrial consumers away from PSNH. This company needed to have enough commitment from residential users prior to offering services and they have apparently reached that minimum requirement. The service change is anticipated to my accounts when the next bill arrives and the rate quote is lower rate than PSNH.

Now the bigger question than air inversion impacts from emissions created by Burgess biopower, becomes...what if PSNH files for bankruptcy? What's in store for Burgess biopower?

www.residentpower.com

[jon]

Does Freedom Logistics and Jim Rodier ring a bell with anyone.

"Resident Power’s management team has nearly 100 years of collective experience in the energy markets. The company's management team were involved in the start up of Freedom Energy Logistics (FEL), a NH base corporation in energy consultation and procurement.

FEL has been providing similar services to large commercial and industrial businesses throughout New England providing access to low cost wholesale electricity saving its customers an average of 10-25% on their electricity bills. They procure billions of kilowatt hours and generate millions of dollars in revenues.

FEL serves many of the prominent Towns, Businesses and Colleges in the states of NH and MA. They along with their subsidiaries boast both an excellent savings track record and a stellar reputation.

Resident Power is proud to offer unique, free-market solutions that lower costs and increase the competitiveness and profitability of our customers.

We invite you to learn more about the de-regulated electricity market and the powerful solutions
we offer. Visit our FAQ's page and enroll today!"

[jon]

The issue of PSNH losing large industrial customers has become so significant for PSNH that PSNH has requested that the PUC grant PSNH a "new fee" to cover the cost of PSNH losses due to competition. In other words, make NH industries pay a fee to make up the loss PSNH has encountered due to competition. The PUC, in its infinite wisdom, has denied such requests. Mean while, the PSNH Bow plant, now operating for over 14 years without a contract is facing major upgrades. As these things occur, PSNH has no alternative but to raise residential rates, which in turn will logically increase migration of the PSNH residential base to electricity providers such as Resident Power. A perfect storm is potentially brewing and Berlin could be the eye of the storm with the city's newest largest tax payer facing a huge dilemma in the future. Never say never. What a mess that would be. I bet the mayor wouldn't run again if he saw that comin. ;)

[jon]

Antonio, You may see that PSNH invoice being emailed sooner than anticipated to save on postage. ;)

[Rocky]

PSNH filing for bankruptcy? Wouldn't be the first time! The cost of electricity in New Hampshire is a significant deterrent for companies thinking of moving here. Two to three years ago Ikea was looking at Berlin and New Hampshire to locate a plant, they ended up in a southern State and the stated reason, the cost of electricity. More recently a Canadian company was looking at both Berlin and Groveton, they went away I'm told because of the cost of power, power is around $.06/kw in Quebec, half of our cost.

[Antonio Andolini]

PSNH is already soliciting customers to switch to ebilling, as are many others.

[Rocky]

I was just reading about utilities installing new wireless electronic meters that not only don't require a meter reader to visually take readings, but the meter breaks down the total consumption into time sensitive "peak demands" from which the utility will charge a higher rate based on their need to meet "that demand". Right now our analog meters average out our usage over a month the new meters will identify when loads come online in a time sensitive manner. Large load demands such as clothes dryers or water heaters will show up as spikes and allow the utility to adjust your bill accordingly, heaven forbid that they both come on at the same time.

[Antonio Andolini]

Of course,if you don't have a computer (yes, some households still do not)or access to the Internet, ebilling doesn't work. Some of us still write out a check, put it in the envelope, put on a stamp and turn it over to members of "one of the largest forces of unionized workers in the United States." Just think, even if the power goes out, this old-fashioned process still works.

[Antonio Andolini]

Indeed, Rocky. I recall these "smart" meters being promoted as somehow helping us become more "green."

[Rocky]

Antonio, the more broke you are the greener you become. That's why some advocate higher taxes on gasoline.

[Antonio Andolini]

Timely reminder of when it should not be the role of government:
http://townhall.com/columnists/johnstossel/2011/10/12/government_the_job_killer

[Rocky]

It's no wonder that Stossel is on FOX, he mixes facts and fiction very well and produces metaphors for the poorly informed to accept as gospel.

[Antonio Andolini]

So many of those advocates are the "SOBs drivin' in their SUVs." "I'm sick of these SOB's drivin their SUV's trying to run over me when I'm in my beat up car" Cadillac Blues by Johnny Bassett and the Blues Insurgents.
I was thinking this power problem could lead to a spike in generator sales. Then I realize generators need gasoline or propane or natural gas (which will, of course, be "smart-metered".) Are solar-powered generators practical up here? Hmm...gotta go write a business plan.

[Antonio Andolini]

Listen my children and you shall hear of the fleecing of consumers far and near. (with apologies to Henry Wadsworh Longfellow.)
I'm plenty broke, so am I saving the planet?

[Rocky]

Payback on solar (PV) is 15 to 20 years, but as an investment, it might be better than your 401K.

[Antonio Andolini]

Rocky, isn't mixing fact and fiction and producing metaphors "modern" journalism?
You're right, though. I should spend more time tuning in to the Reverend Al Sharpton and Larry O'Donnell.

[Rocky]

There's nothing "modern" about it, it's as old as civilization. Sharpton drives me crazy.

[Antonio Andolini]

What's going on in the photo? It looks like a ferry boat. I've heard of mail runs around Lake Winnipesaukee or mail coming over to islands on ferries, but I didn't think you had a uniformed USPS person with scales and all. "Gee, honey, I went to mail that package like you asked, but while I was waiting in line the boat left, so I didn't get the lawn mowed."

[Rocky]

Post Offices are in weird places, look at Errol in LL Cote's place. I have no doubt that they have some on ferry boats.

[jon]

games psnh is clearly showing they play as a result of competition; lower rates and increase stranded costs. could they be less obvious at least?

http://www.unionleader.com/article/20110930/NEWS02/709309959/-1/news

[Antonio Andolini]

I've known businesses that also house a PO. The rent that USPS paid one business owner was then used to cover the mortgage, heat and lights for the whole place. When the business closed, two other local businesses fought to get the PO in their place.

[Antonio Andolini]

Gee, Jon, they're just here to Service the Public of New Hampshire, aren't they? What was their slogan? Something about being in our lives...