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Some 15,600 U.S. Postal Service managers. supervisors and postmasters are getting notice this week that they qualify for the mail carrier’s latest early retirement offer. The offer applies to eligible field employees covered by the Executive and Administrative Schedule, USPS spokeswoman Patricia Licata said in reply to emailed questions from Federal Times. That figure (15,580, to be exact) represents about one-third of the 42,239 field EAS employees on the rolls as of last week. For the Postal Service as a whole, the ranks of the EAS workforce numbered 50,346, excluding the USPS inspector general’s office and the Postal Inspection Service.
Those who accept may opt to leave by the end of December or the end of January. The decision deadline is Nov. 29. The “voluntary early retirement” offer does not extend to Postal Career Executive Service members, Licata said, contrary to earlier assertions by the National Association of Postal Supervisors.
In an announcement posted on an internal employee website late last week, the Postal Service linked the offer to new mail processing plant rankings accompanied by changes to EAS staffing criteria. The “change process” could include a reduction-in-force, the announcement said.
The early-out “is only being offered to lessen the impact on employees who are potentially being impacted by organizational change,” Licata said. Asked whether the Postal Service has a target for the number of takers, she said that “employees make individual determinations to either accept or decline VER offers.”
Under the standard federal package, employees can retire early if they are at least 50 years old with a minimum of 20 years’ service or at any age with at least 25 years’ service. The offer does not include a financial incentive, aka “buyout.”
Two federal employee unions, along with the National Active and Retired Federal Employees Association, are wading into the fight over postal legislation.
In a joint letter to members of a Senate committee released yesterday, NARFE, the American Federation of Government Employees, and the National Treasury Employees Union objected to provisions in a Senate bill pertaining to the federal workers’ compensation program and the U.S. Postal Service’s hopes of revamping its participation in the Federal Employees Health Benefits Program.
You can read the letter here; whatever the merits of the arguments, it’s safe to say that the opposition of three organizations that normally don’t focus on postal issues is likely to lengthen the already long odds of any major postal legislation winning congressional approval this year.
The bill was introduced last month by Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla. Carper chairs the Senate Homeland Security and Governmental Affairs Committee, which has jurisdiction over the Postal Service; Coburn is its top Republican.
“As I’ve said before, our bill isn’t perfect and I expect it to improve as our conversations continue,” Carper said in a statement. “It is my hope that in the coming weeks, Congress, the Obama administration and stakeholders can come together to enhance this plan in order to save the Postal Service before it’s too late.”
To that end, the committee plans two hearings later this month, Carper said in the statement. While a committee spokeswoman wouldn’t comment on specific dates, FedLine is told by one source that the sessions are tentatively scheduled for Sept. 19 and Sept. 26. Possible witnesses include Postmaster General Pat Donahoe; Postal Regulatory Commission Chairwoman Ruth Goldway; officials from the Government Accountability Office and USPS inspector general; and union and mailing industry representatives.
The Postal Service’s Inspector General’s office is launching a review of conference spending at the agency.
The office said that conferences can be an effective method of communication or they can be abused. Agencies have made great strides to reduce those costs by promoting teleconferencing and reducing the number of meetings, the office said in an Aug. 21 announcement.
“We are conducting research to determine if the Postal Service properly accounted for and evaluated Postal Service initiatives to reduce meeting and conference costs,” the announcement said.
The inspector general’s office is also asking attendees at recent Postal Service conferences and events to report if they thought costs could have been reduced and if the amenities provided were appropriate.
Scrutiny of conference spending has increased since an April 2012 inspector general report that detailed a 2010 General Services Administration conference that cost $823,000 and forced out the agency’s top leaders. The Veterans Affairs Department and the IRS have also come under fire for excessive conference spending.
News that the U.S. Postal Service’s financial picture is improving (although it’s all relative when you still post a $740 million quarterly loss) reminded FedLine of a recent inspector general’s report looking at one roaring success: political mail.
This will come as no surprise to anyone who had to empty a mailbox in a battleground state, but last year’s general election was a huge winner for the USPS bottom line. In comparison with the 2008 election season, revenue from a torrent of candidate and other political mailings more than doubled to $508 million, far beyond the initial goal. This was not happenstance, as the Postal Service had assembled a sales team charged precisely with growing that market.
While USPS officials earlier this year turned down Federal Times’ request for an interview with team leaders, the inspector general offers some details on how they did it and concludes that there’s still more money to be made. A couple of key factors last year were:
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Only days after it was introduced, a proposed Senate overhaul of the U.S. Postal Service is taking its lumps from both organized labor and the mailing industry.
“This bill is fatally flawed,” Cliff Guffey, president of the American Postal Workers Union, said in a Friday statement denouncing the legislation as a betrayal of USPS employees.
The Association for Postal Commerce, which represents business mail users, has some “significant issues” with the measure, such as its idea for widening the Postal Service’s discretion in applying an inflation-adjusted cap on rate increases for standard mail and other areas where it dominates the market, the group’s president, Gene Del Polito, said in a phone interview Monday.
Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla., introduced the bill Thursday as lawmakers were leaving town for their customary August break, meaning that no action will be possible until next month at the earliest. The two are the chairman and top Republican, respectively, on the Senate committee that oversees the Postal Service. Their bill came after months of discussion; a joint news release makes clear that both believe there’s still a ways to go.
“This bill isn’t perfect and will certainly change as Dr. Coburn and I hear from colleagues and stakeholders, including postal employees and customers,” Carper said. More pointedly, Coburn described the bill as a “rough draft of an agreement subject to change.“
But dialogue takes time and, with time running out for action, that tentative note underscores the growing odds that Congress will once again fail to approve any kind of comprehensive postal fix.
For one thing, the Senate bill differs significantly from the measure approved last month by the House Oversight and Government Reform Committee; for another, the Postal Service is doing a bit better than expected this year.
How much better will become clearer this Friday when the mail carrier releases its third-quarter financial results. But as Federal Times has previously reported, Postmaster General Pat Donahoe said last month that projected losses—originally pegged at $7.6 billion in fiscal 2013—will be closer to $6 billion. That may be relatively good news from a balance-sheet standpoint, but politically it means less pressure on Congress to move. And next year is a mid-term election year, meaning that lawmakers will even be less inclined to take the kind of tough votes that any serious postal overhaul is sure to demand.
Among other features, the Carper/Coburn bill would:
Require the Postal Service to continue Saturday mail delivery for at least one year while pressing the agency to replace door-to-door delivery with cluster boxes or curbside delivery when cheaper.
Require the Office of Personnel Management to recalculate the Postal Service’s pension obligations based on assumptions tailored to USPS employees rather than the federal workforce as a whole. Long story short, this step would likely reduce the amount that the Postal Service would have to pay into the two main federal pension programs and thus free up money for other purposes.
Revamp the federal workers’ compensation program.
The mailing industry is regrouping for battle over the possibility of an emergency rate increase request from the U.S. Postal Service.
After lying dormant for the last 2-1/2 years, the Affordable Mail Alliance, made up of nine trade groups and companies, issued a news release yesterday stating that the USPS Board of Governors “is set to decide on the matter imminently.”
The board, which is scheduled to meet in closed session next Tuesday, ordered postal management to study the possibility of an “exigent” rate increase earlier this spring after abandoning plans to end Saturday mail delivery.
At this point, no decision has been made on whether to pursue that route, USPS spokeswoman Katina Fields said in an email. Although the board and postal management know that raising prices affects mail volumes, Fields said, “we must consider ALL options to cut costs and increase revenue.” Among the items on the agenda for next Tuesday’s meeting is “Pricing.”
Under a 2006 law, the Postal Service can cumulatively raise rates in accord with the annual inflation rate without much hassle. Seeking an exigent increase entails a full-blown Postal Regulatory Commission proceeding at which the Postal Service has to make the case that extraordinary circumstances warrant a larger increase.
When the Postal Service last tried that option in July 2010, it cited the recession’s impact on revenue as a reason for seeking the 5.6 percent boost. But it encountered a fierce backlash from the mailing industry and members of Congress; the commission unanimously squelched the request four months later.
If postal leaders decide to try again, they face the argument that higher prices will hasten a customer exodus. “You’re going to exacerbate the disappearance of mail,” Tony Conway, executive director of the Alliance of Nonprofit Mailers, said in a phone interview today, adding that many of his members are still in shaky financial condition themselves. In yesterday’s release, the Affordable Mail Alliance–which includes Conway’s group–said the result “will be more jobs lost in the private sector in order to maintain an overbuilt postal system, and even less revenue to the Postal Service as mailers flee.”
But despite aggressive cost-cutting efforts since 2010, Fields said, the Postal Service’s financial outlook has worsened because of the continued decline of first-class mail volume and Congress’s failure to pass “comprehensive postal reform legislation.”
Rep. Darrell Issa, chairman of the House Oversight and Government Reform Committee, has just released a “discussion draft” of a bill intended to put the U.S. Postal Service on a more stable, long-term financial footing.
The bill, which has not yet been introduced, bears some resemblance to the measure that the California Republican unsuccessfully pushed in the 2011-2012 session of Congress. It would, for example, temporarily replace the USPS board of governors with a presidentially appointed panel of five outside executives who would have the power to shake up the agency’s top management and take any steps necessary under the law to “ensure the long-term solvency” of the Postal Service, according to a summary provided by Issa’s office.
The measure would also allow an end to Saturday mail delivery while requiring continued package delivery, which, of course, is what Postmaster General Pat Donahoe wants to do anyway.
But the draft drops the idea of setting up the equivalent of a BRAC commission to close post offices and mail processing plants. It would provide some significant relief from the current requirement for the Postal Service to “pre-pay” about $5.5 billion annually for future retiree health care and would also channel projected pension surpluses toward those retiree health care benefits.
While Issa looks forward to a “robust” discussion of the draft bill, he has no timetable for introducing it, spokesman Ali Ahmad said. The Postal Service, which was cool towards Issa’s previous bill, is reviewing the draft, a spokesman said. But there is no sign that release of the proposed bill will end the stalemate over how best to fix the mail carrier. Despite plenty of lip service to bipartisanship, lawmakers remain deeply divided (largely along partisan lines) over how much more deeply labor costs should be cut, whether to let the Postal Service create its own health insurance plan and other issues. No comprehensive legislation has so far been introduced in the Senate, although Tom Carper, D-Del., chairman of the Senate Homeland Security and Governmental Affairs Committee said this week that he still hopes to come to agreement with the panel’s top Republican, Tom Coburn of Oklahoma. In the House, Issa’s draft drew a guarded reception from the oversight committee’s top Democrat, Elijah Cummings of Maryland.
“Although I appreciate the chairman’s efforts to focus attention on the financial challenges facing the Postal Service, I have serious reservations about some of this bill’s provisions,” Cummings said in a statement. “I continue to believe that any bill Congress considers should be a bipartisan, comprehensive solution that solves the Postal Service’s immediate financial problems and puts the Postal Service on sound financial footing.”
[This post has been updated and expanded.]
Last year, following the disclosure that 123,000 Thrift Savings Plan accounts had been hacked, the Federal Retirement Thrift Investment Board launched a wide-ranging assessment of its computer system security.
That “Tiger Team” task force review is now complete, but the board isn’t making the findings public.
Instead, the agency is withholding the entire report on the grounds that disclosure “could reasonably be expected to risk circumvention of the law,” Amanda Haas, a Freedom of Information Act officer with the board, said in a response today to Federal Times’ FOIA request. Haas did not immediately reply to a request for more information on why the board is claiming that particular exemption to the act’s requirement that government records are generally public.
The board began the review after learning early last year that Social Security numbers, addresses and other personal data for the 123,000 account-holders had been stolen from a contractor’s network. The cyberattack actually occurred in 2011, but board officials didn’t learn about it until getting notification from the FBI. The bureau has not announced arrests or charges in the case.
The Tiger Team review was in part intended to identify any computer security gaps and come up with ways to fix them, Greg Long, the thrift board’s executive director, told a Senate subcommittee last July. Long made no mention of law enforcement issues, but acknowledged that–at the time of the attack–the board didn’t have a “breach notification plan” because it lacked the resources to develop one. (Long signed such a plan in June 2012.)
The TSP has some 4.6 million participants, including military personnel, civilian agency employees and U.S. Postal Service workers.
Scott Hodes, a lawyer who was once acting chief of the FBI’s FOIA litigation unit, was not familiar with the report, but said in an interview that the board has to establish a threshold to legally withhold information under the FOIA law enforcement exemption. Even then, parts of the report that don’t meet that threshold must be released, Hodes said.
“They can’t withhold everything.”
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.”