Members of the U.S. Postal Service’s board of governors risked losing their jobs if the agency persevered with ending Saturday mail delivery following passage of a final fiscal 2013 spending bill.
That was the warning delivered by an outside law firm April 5–four days before the board pulled the plug on the plan.
Proceeding with five-day mail delivery “would entail a number of risks,” Jeffrey Bucholtz, a partner with King & Spalding, wrote in a 17-page opinion prepared for the Postal Service’s legal department. “First, violating a federal law would likely supply cause for the President to remove the Governors.”
While the Supreme Court has never precisely defined the grounds for removal, Bucholtz continued, “it has said that the good-cause standard enables the President to ensure that an independent officer ‘is competently performing his or her statutory responsibilities in a manner that comports with’ applicable legislation.”
The odds of successfully moving ahead with five-day delivery faced other possible roadblocks, he added, including a legal challenge from the comptroller general and other lawsuits that could spring up around the country. Although judges could rule either way on such cases, he said, “the Postal Service would have to run the table and win every case in every court.”
The memo, marked “PRIVILEGED AND CONFIDENTIAL,” casts new context on the board’s about-face on five-day delivery. In last month’s statement announcing that it was halting implementation of the new schedule, the panel, chaired by Mickey Barnett, a lawyer and former New Mexico state senator, didn’t reference the removal threat. Whether that factored into its decision is unclear.
A seat on the board carries real power over the operations of an enterprise that affects virtually every American. But the pay is $30,000 annually plus expenses, a relatively modest amount by Washington standards for what in recent years has become an increasingly time-consuming job.
In a brief interview Friday, Barnett said the removal risk had no effect on his stance. “My term’s up at the end of December,” Barnett said following the board’s public meeting on release of the Postal Service’s second quarter financial results. Speaking on behalf of the board, Postal Service spokesman Dave Partenheimer had previously pointed back to last month’s statement. There, the board said that Congress left it no choice but to drop the plan for now and that it didn’t want to unduly burden postal customers with “ongoing uncertainties.”
The memo was one of two that Bucholtz prepared on the five-day delivery question at a cost to the Postal Service of about $51,000. The central issue was whether a decades-old congressional ban on curtailing mail delivery days still applied under the stop-gap spending measures known as continuing resolutions.
Under the CR that was in place in February when the Postal Service announced plans to end Saturday mail service with projected savings of $2 billion per year, Bucholtz had opined in a Feb. 28 memo that the agency could legally proceed. It was a whole different story under the full-year CR signed in late March. That measure did incorporate the ban, he said in the April 5 memo. As an independent agency, Bucholtz said, “the Postal Service should tread carefully in the highly controversial area of potential open disobedience of a federal statute.”
“Without support from Congress or the President, efforts to avoid compliance with enacted law are not likely to succeed.”
Of course, the Postal Service, citing a lack of money, has twice flouted a separate legal requirement that it pay about $5.5 billion annually into a fund for future retiree health care. Those defaults have generated little concern from politicians. At an April 17 congressional hearing, they also helped prompt the following frank exchange between Barnett and Rep. Darrell Issa, R-Calif., who chairs the House Oversight and Government Reform Committee, according to a transcript.
Issa: “You obey a law that costs you $2 billion and you ignore a law that says you owe us $5.5 billion a year and you’ve done it for two years. Why would you pick one law to obey, that cost — you know, that you choose to obey, that actually costs you $2 billion? Where’s the fiduciary balance there? If you’re going to break a law, why is that the law that you broke? Or didn’t break?”
Barnett: “Mr. Chairman, thanks for that question, because I, we do have a reason. The board has discussed it extensively. The real problem with the going from six to five-day, knowing it will be challenged in court and not knowing what the result would be, is the tens of thousand dollars that many, many businesses would have to implement in software updates and changes in their procedures. It also involves approximately 23,000 employees that would be directly affected . . .”
[Post updated Friday, May 10, with Barnett comments]
Under orders from his board, Postmaster General Pat Donahoe is gamely trying to reopen pay talks with employee organizations after the collapse of efforts to end Saturday mail delivery.
Good luck with that.
The U.S. Postal Service’s “untenable” financial position “demands urgent action to ensure the near-term viability of our great institution,” Donahoe said in a Tuesday letter to Louis Atkins, president of the National Association of Postal Supervisors. (NAPS provided the letter to FedLine with permission to post it online.)
“In light of these extraordinary circumstances, I request your cooperation in reopening consultations concerning the pay and benefits of the dedicated employees you represent,” Donahoe said in the letter. “I fully understand the significance of this request and would not make it; however, the financial challenges confronting the organization and all who depend upon its very survival make it necessary.”
The USPS board of governors told Donahoe last week to take that unprecedented step after dropping plans to go to five-day-a-week mail delivery this August. In a statement, the board said its goal is to lower total workforce costs and find other ways to make economies. Similar letters went out this week to the two postmaster groups and the Postal Service’s four unions.
“What I‘d like to do is sit down–before we do anything–as a group and have a session where we kick around some ideas,” Donahoe said at a Wednesday congressional hearing. “There may be some opportunities in there we should look at.”
But after years of cutbacks and downsizing, employee groups aren’t feeling very receptive. At least three of the four postal unions are so far objecting to a return to the bargaining table. And NAPS’ executive board has already decided that reopening pay consultations is not in members’ best interest, the association said yesterday in a politely worded news release. Last year’s round resulted in a third straight year without a salary increase for executive and administrative schedule (EAS) employees, the release said, adding that supervisors, managers and postmasters must pay more for health insurance.
Finally, hiring freezes stemming from the Postal Service’s financial crisis have left the mail carrier understaffed by as many as 5,000 supervisory and managerial positions, the release says. “Our members have performed admirably under these trying conditions, moving the mail every day throughout the country and have given back more than their fair share.”
For U.S. Postal Service employees, the disclosure that an envelope addressed to Sen. Roger Wicker, R-Miss., may have contained a poison could revive unnerving memories of the 2001 anthrax attacks that killed two workers at the Brentwood mail processing plant in Washington, D.C. According to USA Today, the envelope is undergoing further analysis to confirm the presence of the toxin known as ricin. Here’s what the Postal Service is saying so far, in a statement provided by spokesman Dave Partenheimer this morning.
“The U.S. Postal Service is working diligently with authorities to determine if there was in fact a hazardous substance inside an envelope addressed to a U.S. senator, and, if so, what type of substance was present.
“The Postal Inspection Service is working with appropriate health and law enforcement agencies on this incident. We have no reports of other such letters in the mail.
“Our primary concern right now is the safety of our employees, the safety of our customers and the safety of the U.S. mail.
“More information will be shared when it comes available.”
The U.S. Postal Service’s board of governors is set to meet tomorrow, according to a spokesman, and a thorny choice will likely dominate the agenda: Let Postmaster General Pat Donahoe proceed with a previously announced plan to end Saturday mail delivery this August, with a projected savings of $2 billion annually. Or back off—at least for now—to avoid a probable lawsuit, not to mention antagonizing members of Congress whose help is needed to pass any long-haul fix for the Postal Service’s finances.
Among some observers, the betting is that the board will opt for door number two.
“That’s the strong rumor—that they’ve gone wobbly,” said Tony Conway, a former USPS executive who now runs the Alliance of Nonprofit Mailers and supports the reduced mail delivery schedule. At the Association for Postal Commerce, another private group that represents business mail users, President Gene Del Polito also expected a “back off” decision by the five-member board.
But George Gould, a consultant who formerly worked for the National Association of Letter Carriers, said the panel is divided on which way to go. When Donahoe announced the five-day delivery plan back in February, Gould said, part of the strategy was to draw lawmakers’ attention to the need for postal overhaul legislation.
The plan got their attention, Gould said, but not in a positive way. Thus far, no comprehensive postal bill has been introduced. But by another line of thinking, he said, sticking with the five-day plan would be a way to “keep the pressure” on lawmakers.
For what it’s worth, the Postal Service’s web site (as of this afternoon) still includes a section on the proposed changes. Although Saturday mail delivery would end in early August, package delivery would continue six days a week. Like most board meetings, tomorrow’s will be closed to the public, according to the USPS spokesman, Mark Saunders.
On one front, the episode underscores—yet again—how hard it can be for the Postal Service to wriggle around congressional fence lines. Since the 1980s, lawmakers have included a provision in annual spending legislation that prohibits the agency from ending six-day delivery. When Donahoe unveiled the plan in February, he entreated lawmakers to do nothing to stop it. Because the spending bill signed this month is mostly a continuation of last year’s legislation, however, it maintains the ban on delivery cutbacks even though the Postal Service is nowhere mentioned, according to staffers on both the House and Senate appropriations committees.
But as Conway noted, the Postal Service continues to pursue other cost-cutting measures. In a surprise move late last month, it decided to speed up dozens of mail processing plant closings and consolidations originally scheduled for next year. A separate undertaking to cut hours at some 13,000 postal offices appears to be on track. And although a requirement to annually funnel about $5.5 billion into a fund for future retiree health care remains on the books, the Postal Service has twice defaulted with no outcry from Congress over violating the law. And in a symbolic milestone, the career postal workforce dropped below a half-million earlier this year.
As for that long awaited postal bill, Del Polito said he’s been told that it’s coming in about two weeks. Earlier this year, optimism officially abounded that a deal was within reach.
“I believe that we are very close,” Rep. Elijah Cummings, D-Md., the ranking member on the House Oversight and Government Reform Committee, said at a February congressional hearing, adding that a final agreement could come by the end of March. The committee’s chairman, Rep. Darrell Issa, R-Calif., struck a similarly upbeat note. Sen. Tom Carper, D-Del., who heads the Senate Homeland Security and Governmental Affairs Committee, said he hoped to introduce a bill by the end of last month.
Not surprisingly, the job is taking a little longer.
“The need to enact comprehensive, bipartisan postal reform legislation is more urgent than ever,” Cummings said in a statement last week. “Although I am disappointed that more progress has not been made, I am hopeful that legislation can be enacted swiftly with concerted effort from all sides.” Issa spokesman Ali Ahmad declined comment on when a bill might be coming.
In the Senate, Carper will do what he can to bring Congress and the Obama administration together around “a set of meaningful reforms in the coming weeks to help the Postal Service survive and thrive,” spokeswoman Jennie Westbrook said in an email. To that end, she added, Carper “intends to have legislative language ready in the near future and remains hopeful that he will be able to move a bill in committee soon after.”
My name is Andy and if you haven’t guessed it yet, I am one of the reporters here at the Federal Times. For the last few weeks we have had a new feature on our blog, “Silver Screen Feds,” where we look at famous federal employees in cinema and television. This week my partner-in-crime and colleague Steve Losey is spending time with his family, so instead of doing all the work myself, you guys get a clip-show version of everything we have done so far.
Below are each of our entries in the ongoing series, so feel free to read and enjoy them. Post your own suggestions in the comments and let us know what you think.
In our first entry I took a look at the postal workers who save the day in the 1947 classic “Miracle on 34th Street.” And Stephen examined the tragic flaws that brought down the Environmental Protection Agency’s Walter Peck in 1984′s “Ghostbusters.”
Next, we examined a far less-honorable mailman — Newman from “Seinfeld” — and the surprising heroism of Drug Enforcement Administration agent Hank Schrader in “Breaking Bad.”
In our third entry we picked two federal employees who couldn’t be any more different: Dr. Edwin Jenner, the doomed researcher at the Centers for Disease Control and Prevention in the zombie apocalypse show “The Walking Dead,” and Ranger Smith, the hapless National Park Service ranger who can’t stop Yogi Bear from stealing them pic-a-nic baskets.
In our fourth entry we took a trip back to the Roaring Twenties and the lawless days of Prohibition, to look at the best and worst Treasury agents who ever busted up a still on-screen: Legendary lawman Eliot Ness from the 1987 film “The Untouchables,” and deeply disturbed Agent Nelson Van Alden from HBO’s series “Boardwalk Empire.”
And in our latest entry I took a look at the best team of federal employees ever to grace the big screen: Mission control from “Apollo 13.” And keep reading for Stephen Losey’s take on Environmental Protection Agency Administrator Russ Cargill, from “The Simpsons Movie” — the first character we’ve profiled who descends into outright super-villainy.
Even though the U.S. Postal Service isn’t mentioned once in the stop-gap spending bill approved by the House this afternoon, the measure deals a blow to the agency’s hope of ending Saturday mail delivery this August.
For about 30 years, Congress has used annual appropriations bills to continue a ban on any reduction in mail delivery frequency. But continuing resolutions like the one that cleared the House today are basically just extensions of whatever Congress did the previous year. And because this particular CR is ‘silent” on the mail delivery issue, that means the prohibition would remain in force through the end of the fiscal year in September, according to a House Appropriations Committee spokeswoman.
The bill still needs Senate approval, as well as President Obama’s signature. But with all sides now preoccupied with the across-the-board budget cuts known as the sequester, the odds are pretty good that lawmakers aren’t going to act to allow the Postal Service to end Saturday mail delivery this year unless there’s a much bigger deal on an overhaul to get the money-losing mail carrier back in the black.
In an email, USPS spokesman Dave Partenheimer declined comment on today’s House vote, but stressed the view that the plan to end Saturday mail delivery (while continuing Saturday package delivery) “is a responsible and reasonable approach to address our urgent financial situation and America’s changing mailing habits.
“We continue to lose $25 million per day,” Partenheimer said. “The new delivery schedule would save approximately $2 billion annually once fully implemented and would be a significant step towards improving our financial stability.”
Tags: continuing resolution
For anyone with a background in appropriations law and a little time on their hands, FedLine has obtained a copy of the legal opinion that the U.S. Postal Service is using to justify its decision to end Saturday mail delivery this August.
The gist: The long-standing congressional ban on curtailing six-day delivery doesn’t apply at present because the federal government is operating under a stopgap continuing resolution. And even if did apply, lawmakers don’t have to continue the ban when that resolution expires March 27, Postal Service lawyers write in the nine-page opinion.
The underlying reasoning is complicated enough that even Postmaster General Pat Donahoe had trouble explaining it at the Feb. 6 news conference announcing the planned delivery change. You can read the opinion for yourself here.
But while USPS attorneys say the agency is not flouting Congress’s will, the legal niceties may be lost on some lawmakers. “You said you’re satisfied that you have legal authority–I’m not,” Sen. Mark Pryor, D-Ark., told Donahoe at a hearing last week of the Senate Homeland Security and Governmental Affairs committee. “And I’m not sure the committee is,” Pryor added.
Sen. Carl Levin, D-Mich., also wasn’t satisfied. Despite “what’s in the law, your lawyer apparently is saying that you can cancel that sixth day,” he said. And while Donahoe pleaded with lawmakers to stay out of the way, Levin suggested that the agency might actually need additional congressional oversight of its contracts with Federal Express and UPS.
“Every contract in this Postal Service is competed,” Donahoe responded.
“That’s fine,” Levin said, “But it’s also the American way that there be some congressional oversight of your contracts.”
Lest anyone forget, Postmaster General Pat Donahoe remains keenly interested in creating a stand-alone health insurance plan for about 1.1 million U.S. Postal Service employees and retirees.
The latest reminder came at last week’s Senate hearing on the USPS’s financial crisis. Although lawmakers’ attention was predictably focused on the agency’s decision to end Saturday mail delivery, Donahoe also stressed the urgency of pulling out of the Federal Employees Health Benefits Program.
“An astonishing 20 cents of every revenue dollar the Postal Service takes in must go toward health care costs,” Donahoe said in prepared testimony. “By moving away from the federal system, nearly all of our employees and retirees would reap the benefits of getting equivalent or better healthcare coverage and paying less for it.”
Creation of a new health plan was a major stumbling block in contract talks with the National Association of Letter Carriers; although labor and management couldn’t reach a deal, a joint task force will keep discussing the issue, according to an arbitration panel’s recent decision.
But the Postal Service hasn’t furnished many details about what it has in mind. And employees may understandably be skeptical of any promises to provide comparable (or better) benefits at lower cost. Fortunately, the USPS inspector general took a look at the subject last year that fleshes out some specifics.
The inspector general’s report, whose conclusions drew a vigorous dissent from Postal Service management, can be read here. It’s of course possible that the USPS human resources team has since made changes to their plan; if so, however, those changes haven’t been made public.
In the meantime, here are a few takeaways from the IG’s review. By the Postal Service’s reckoning, creation of a stand-alone plan would save $52 billion. (The original total was $62.1 billion, but the agency then dropped the idea of freezing its contributions for retiree health insurance, according to the report.) Although the IG doesn’t say over what period of time those savings would occur, the key is requiring employees and retirees to move to Medicare, the taxpayer-funded medical benefits program for people aged 65 and older.
That step alone would save some $37 billion; for older employees and retirees, the Postal Service’s health plan (whatever it turns out to be) would become the back-up insurer to Medicare. The Postal Service would also be freed of much, if not all, of the obligation to set aside billions of dollars now for future retiree care.
But from the employee/retiree perspective, there’s one immediate concern. By law, anyone eligible for Medicare Part B (which covers things like doctors’ visits and lab tests) is supposed to sign up after turning 65 or else face a 10 percent, per year, enrollment penalty.
According to the IG, there were about 88,000 USPS retirees over 65 who hadn’t signed up. Those folks would thus face late-enrollment penalties totaling $53 million per year, or an average of $625 per person. The Postal Service needs to settle that issue, the inspector general said, either by ensuring that the penalties will be waived or by deciding who’s going to foot the bill.
USPS workers and retirees could also pay more under another proposed change that would require anyone retiring after the end of this year to pay a standard deductible before the Postal Service picks up any cost not covered by Medicare. But the Postal Service would also expand coverage options from the two currently offered by the FEHBP to four. In some instances, employees could pay less than they do now. (Check out p. 11 of the IG report for a side-by-side comparison.)
The overall goal here is simple. The Postal Service, like any other money-losing enterprise, is trying to tamp down costs wherever it can. And postal workers generally pay less for their health benefits than other federal employees.
But because congressional approval is required, the Postal Service’s plans need political traction that so far appears to be lacking. At a September 2011 congressional hearing, for example, Office of Personnel Management Director John Berry was notably unenthusiastic about letting the Postal Service leave the FEHBP. A fuller analysis of the potential effects was needed, Berry said, adding that he thought postal employees were “well-served” by the status quo.
In last year’s report, the inspector general recommended that USPS officials lay out to affected employees and retirees, as well as the government, “all potential cost increases, cost savings and cost shifts that would result from a transition to a Postal Service-proposed alternative health care plan.”
In their strongly worded response attached to the report, postal executives both disputed key findings and objected to what they called its “negative tone.” The Postal Service, for example, has proposed relief from the Medicare late enrollment penalties, they wrote. A draft of the report, they added, “totally ignores the fact that total costs will decrease substantially and that out-of-pocket costs for most employees and retirees will decrease.”
The Postal Service has yet, however, to make the kind of detailed disclosure urged by the IG. Until it does, a tough sales job lies ahead.
In announcing plans to end Saturday mail delivery, Postmaster General Pat Donahoe himself posed the key question yesterday: “Is this legal?”
Donahoe’s answer, naturally, was yes, hinging on a rather complicated analysis of the impact of congressional spending legislation (more about that in a moment).
Official U.S. Postal Service talking points obtained by Federal Times offer a more straightforward explanation: USPS leaders are under orders from the agency’s board to accelerate cost-cutting measures; they believe they have the authority to go to five-day mail delivery on their own; and they are hoping that Congress won’t take any action to stop them.
“The biggest driver of this change is our obligation, consistent with the requirements of Title 39 of the United States Code, to take the responsible steps necessary to ensure our financial stability so that we can provide efficient, reliable and affordable mail delivery service to the American people,” according to the talking points, marked “For Internal Use Only.”
“Given our worsening financial situation, the strong public support for this change, and the plan to maintain six-day package delivery, it is anticipated that most members of Congress understand the urgent need to implement this change.”
At the moment, that hope appears to be debatable.
Reaction to yesterday’s announcement has broken mostly along party lines, with Republican lawmakers supportive and Democrats opposed.
In a news release today, Senate Majority Leader Harry Reid, D-Nev., accused Donahoe of using “flawed legal guidance” to circumvent Congress’s authority and warned that the postmaster general has damaged his reputation with congressional leaders and complicated prospects for comprehensive postal legislation. More encouraging, from the Postal Service’s perspective, was the reaction from House Minority Whip Steny Hoyer, D-Md., who called on Congress to “get serious about comprehensive reform” to put the mail carrier on a long-term path to financial stability. (House Speaker John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., have thus far not weighed in.)
For Capitol Hill critics, the flash point is their belief that the Postal Service is doing an end run around a long-standing legislative ban on reducing six-day mail delivery.
For almost 30 years, that prohibition has been folded into annual appropriations bills. But yesterday, Donahoe suggested that the continuing resolution now in effect offers an opening. Although the Postal Service gets no taxpayer dollars for operating expenses, it does receive a relatively small amount of money for providing free mail to the blind and for overseas voting purposes. Because that money is reimbursement for services already provided—not to fund operations going forward–the prohibition against mail delivery is non-binding, Donahoe indicated.
Left unanswered is why—if this interpretation holds good for any appropriations bill—the Postal Service hadn’t already moved to end Saturday delivery rather than waiting for Congress to drop the prohibition. The unstated answer, perhaps, is that the Postal Service has now been waiting for years, and lawmakers still haven’t acted. In addition, there’s an argument that by continuing to drop off packages on Saturday, the Postal Service really isn’t defying Congress, but simply changing the classes of mail that are delivered.
USPS officials have declined to release the legal analysis that undergirds Donahoe’s position. In a In an email, USPS spokesman Dave Partenheimer also would not comment on the talking points, which he called “documents meant for internal audiences.”
“To be clear, we believe we have authority under current law to make this change,” Partenheimer added. “Also, if there is any question, the continuing resolution expires March 27. We will urge Congress not to take any action to prevent this delivery schedule change.”
But in a letter, Reps. Gerald Connolly, D-Va., and Sam Graves, R-Mo., have asked Donahoe to “immediately” supply the legal justification for the Saturday cutback, as well as all documents related to the decision.
And although USPS executives don’t think they’re under any legal obligation to do so, they’re going to ask the Postal Regulatory Commission to update its 2011 advisory opinion on an earlier, more expansive plan to eliminate virtually all Saturday delivery.
In that opinion, the commission found that the Postal Service had significantly overstated the projected $3.1 billion annual savings from that proposal. Because the Postal Service has only provided a “broad outline” of its newly revamped schedule change, a commission spokeswoman said in a news release this week, the five-member oversight panel “is currently unable to evaluate how the new plan differs from the previous proposal.”
[This post has been expanded and updated.]
It looks like a long road lies ahead in the high-stakes legal battle between Northrop Grumman Corp. and the U.S. Postal Service over a botched automation project worth more than $900 million.
In a joint filing last week, lawyers for the two sides laid out their timetable for conducting the legal fact-finding process known as discovery. Their deadline for wrapping it up (and yes, you are reading this right): Jan. 15, 2016. Along the way, each side may conduct up to 50 depositions a piece, and that doesn’t include expert testimony.
As Federal Times has previously reported, the Northrop Grumman suit filed last May accuses the Postal Service of violating the terms of the 2007 contract intended to improve automated handling of flats. Not surprisingly, USPS officials tell the story a little differently. We won’t rehash all the arguments here, but suffice it to say that each side says the other owes it lots of money.