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]
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.”
The chances of postal legislation clearing Congress this year are now zero following the House of Representatives’ abrupt decision to quit town Thursday night. A band of five retired and current postal workers nonetheless is nonetheless persevering in a hunger strike as scheduled through Saturday.
“We’re maintaining our guard,” Jamie Partridge, a retired city letter carrier from Portland, Oregon, said in a phone interview this morning. The group, encamped on the National Mall in downtown Washington, began the six-day fast at 9 a.m. Monday to protest efforts to end most Saturday mail delivery; they will keep going on until tomorrow at 5 p.m. The hunger strike is also intended as commentary on what the group sees as a congressionally sanctioned policy to “starve” the U.S. Postal Service by requiring it to pay billions of dollars each year into a fund for future retiree health care benefits. The five are part of a group called Communities and Postal Workers United that mounted a similar hunger strike in June.
This afternoon, participants and supporters are planning a parade up Pennsylvania Avenue to the White House, where they will seek to deliver a giant postcard to President Obama urging him to use his veto pen to block any legislation that lets the U.S. Postal Service go to five-day delivery.
That step is at the top of USPS leaders’ cost-cutting agenda. While the White House endorsed five-day delivery earlier this year, the move still effectively requires congressional approval.
A bill by Rep. Darrell Issa, R-Calif., that would have given the go-ahead never made it out of the House. A proposed compromise to allow continued Saturday package delivery drew some attention, but apparently couldn’t overcome disagreements between lawmakers over other issues. Although House members are scheduled to return to Washington on Dec. 27, it’s a safe bet that they’ll be focused on spending and tax issues, not the Postal Service.
The five hunger strikers occupied Issa’s office on Thursday. One–identified in a press release as John Dennie, a retired mail handler from New York–was arrested by Capitol police and later released, Partridge said.
The Merit Systems Protection Board would be able to mete out a wider range of punishments for Hatch Act violators under a bill that won final congressional approval today and now goes to President Obama for his signature.
Instead of firing violators–the only authorized penalty up to now unless the board unanimously opts for a different route–the MSPB could issue formal reprimands; reduce violators’ pay grades; bar them from federal employment for up to five years; or fine them up to $1,000.
Sen. Daniel Akaka, D-Hawaii, sponsored the bill in the Senate; Rep. Elijah Cummings, D-Md., handled it in the House. “These reforms will make the Hatch Act more fair and more effective,” Cummings said in a news release this afternoon.
The 1939 Hatch Act, (officially known, in case you were wondering, as “An Act to Prevent Pernicious Political Activities”), generally bars feds from partisan political activity. It was seen both by Republicans and Democrats as needing a refresh, although the two sides differed on particulars. The status quo is “clear as mud,” Rep. Darrell Issa, R-Calif., declared at a hearing last year of the House Oversight and Government Reform Committee that he chairs. (Cummings is the top Democrat.) So far, however, Issa has not introduced any legislation.
Also pressing for change was Carolyn Lerner, head of the Office of Special Counsel, the agency charged with Hatch Act enforcement. At the law’s best, it keeps people in political power from abusing their positions, Lerner wrote in a New York Times op-ed. At its worst, she said, it prevents would-be candidates in state and local races from running for office because their jobs are in some trivial way tied to federal funding.
How trivial? Well, in one instance, a Pennsylvania policeman wanted to run for school board, but was told by Lerner’s office that the law wouldn’t allow it. His bomb-sniffing dog, after all, was funded by the U.S. Department of Homeland Security. The newly passed bill would explicitly allow local and states candidate to run for partisan political office. Obama is expected to sign the bill.
SAN DIEGO | Politicians of all stripes pay homage to the Greatest Generation, as newsman Tom Brokaw dubbed the men and women who endured the Great Depression, helped win World War II, and went on create the most prosperous society the world had ever known.
Rep. Darrell Issa, R-Calif., offered a less reverential footnote today, attributing the origins of today’s fiscal crisis to entitlement programs fostered by some of those same people.
“The Greatest Generation created many of what the private sector would call Ponzi schemes,” Issa said at an Association of Government Accountants conference here. “They created Social Security, they created Medicare on their watch, [they] created Medicaid.” All of that, Issa continued, ”without resources or funding.”
“A generation that was doing many things right–coming out of World War II–also planted the seeds for all the problems we have today.”
Issa, who gave the morning keynote address at the conference, voiced that view in response to a question from an audience member.
SAN DIEGO | Not that there was much doubt on this score, but Rep. Darrell Issa, R-Calif., this morning confirmed that Congress won’t act to head off a U.S. Postal Service default on a $5.5 billion payment into a retiree health care fund that is legally due Wednesday.
The default “will occur,” said Issa, who chairs the House Oversight and Government Reform Committee and is the lead sponsor of a USPS overhaul bill. The payment was originally due last September, but Congress pushed back the deadline until Aug. 1. Issa’s comments came in an interview after he spoke at an Association of Government Accountants conference here.
Leaders of the financially struggling Postal Service have said they lack the cash to cover both this Wednesday’s payment and a similar installment due Sept. 30.
Asked why lawmakers didn’t grant another delay on the payment due Wednesday, Issa replied: “You can only be in denial so long.”
After a year with “essentially no real reforms” and too little action to shrink the Postal Service’s workforce, he added, the result is that lawmakers are unwilling “to kick the can down the road, at least at this time.”
By the way, just because the Postal Service misses the August and September payments (cumulatively worth $11.1 billion) doesn’t mean those obligations disappear. Unless Congress decides otherwise, the agency will remain legally on the hook for them regardless of its practical inability to pay.
In a statement released today, USPS spokesman Dave Partenheimer reiterated that the mail carrier will continue to deliver mail and pay its employees and contractors. Health benefits to current retirees will not be affected.
“However, comprehensive postal legislation is needed to return the Postal Service to long-term financial stability,” Partenheimer said. ”We remain hopeful that such legislation can be enacted during the current Congress.”
The Postal Service has at least one other financial management headache on the horizon: A workers comp payment in the neighborhood of $1.3 billion that’s due to the Labor Department in mid-October. In a new report, the Postal Service’s inspector general says that a $100 million cash shortfall is expected around that time. Earlier this year, Joe Corbett, the agency’s then-chief financial officer, indicated that such a shortfall could be finessed. But it’s one more chore that he and other USPS executives would presumably prefer not to have on their plates.
[This post has been updated.]
One way or another, it looks like a major congressional battle is headed our way over the U.S. Postal Service’s long-sought goal of ending most six-day mail delivery. One possible flash point is the postal overhaul bill (H.R. 2309) sponsored by Reps. Darrell Issa, R-Calif., and Dennis Ross, R-Fla., which would allow postal officials to begin moving to five-day delivery within six months of the legislation’s being signed into law.
The House’s Republican leadership had hoped to bring the Issa measure to the floor this month; earlier this week, the National Association of Letter Carriers said its “most urgent goal is to prevent this devastating bill from ever becoming law” and announced that it was setting up a toll-free number for members to contact individual lawmakers in opposition.
With mail volume in steady decline, curtailing six-day delivery is at the top of the Postal Service’s cost-cutting agenda. The projected savings are close to $3 billion per year. But the NALC, whose members obviously have a lot to lose, says that step would “destroy” 200,000 jobs. In today’s fractured Congress, this is one of those rare issues that can bring lawmakers together across party lines, raising questions about whether the Issa/Ross bill can pass. A slim bipartisan majority of 222 House members have signed on to a non-binding resolution sponsored by Rep. Sam Graves, R-Mo., urging the Postal Service to stick with the status quo.
And late Wednesday, a Ross spokesman confirmed an online report by The Hill newspaper that chances of action on the bill this month are now slim. “It appears, although we have the votes, leadership does not intend for postal reform to come to the floor before [the] August recess,” the spokesman, Fred Piccolo, told FedLine in an email.
But there’s another front in this fight. Even though the Postal Service receives no tax dollars for operating expenses, it still has to abide by the wishes of congressional appropriators. And both the House and Senate versions of the fiscal 2013 financial services and general government spending bills would require continuation of six-day delivery.
Six-day delivery “is one of the most important services provided by the federal government to its citizens,” the Senate Appropriations Committee wrote in an explanatory report accompanying its version of the bill. “Especially in rural and small-town America, this critical postal service is the linchpin that serves to bind the nation together.”
The Senate bill would also put new restrictions on the Postal Service’s freedom to close mail processing plants, raising alarms from the Coalition for a 21st Century Postal Service, a mailers’ group. Although individual members have different views on the potential benefits of cutting mail service, “we are united in our conviction that the Postal Service must reduce its operational capacity,” the coalition said in a letter to top members of the appropriations committees this week. “Bringing in additional issues can only generate additional uncertainty and potential delay in the passage of reform legislation that is so critical to returning the Postal Service to financial stability.”
[This story has been updated]
So, how big a deal is the U.S. Postal Service’s freeze on closings of post offices and mail processing plants?
Less than you might think, perhaps.
No doubt, today’s abruptly announced moratorium was made under mounting political pressure from Capitol Hill Democrats. “Cave-in” was how Reps. Darrell Issa, R-Calif., and Dennis Ross, R-Fla., described it in a news release.
But the long-term consequences for the Postal Service’s downsizing plans won’t necessarily be that pronounced. Last week, for example, a USPS spokeswoman told Federal Times that processing plant closings would start in April at the earliest. The five-month freeze would push that timeframe back only until May. As American Postal Workers Union President Cliff Guffey stressed on the union’s web site, the freeze “is a temporary reprieve.”
And by getting in the way of the Postal Service’s cost-cutting agenda, members of Congress have put themselves on the line with an implied promise to come up with a better alternative. Or, to quote from a letter signed by 20 senators last week: “We believe it is very important to give Congress the opportunity to reform the Postal Service in a way that protects universal service while ensuring its financial viability for decades to come.”
But to state the obvious (a favorite pastime here in the nation’s capital), lawmakers have already had that opportunity and thus far failed to deliver. Don’t be too hard on them: Fixing an organization that’s losing almost $100 million per week would tax the savviest turnaround artist.
For the APWU and other postal unions, the answer is to let the Postal Service tap into as much as $75 billion in purported pension fund overpayments. Even when you discount the fact that the Government Accountability Office recently dismissed the idea that any erroneous overpayments occurred, a refund is not in the cards as long as Republicans control the House, which they will for at least another year. Short of some miraculously lucrative new business lines or Americans’ mass rediscovery of the continuing relevance of snail mail, it’s hard to imagine postal revenues rebounding any time soon.
Lawmakers may have thus put themselves in a box. If they can’t find out a way by May, they could have to concede that the Postal Service’s route—however distasteful for thousands of communities and USPS employees—is basically the only one they have.
Once again, there’s so much happening with the U.S. Postal Service that it seems simplest to package (no pun intended) the latest developments together. Here goes:
1) In that rare bit of news that doesn’t revolve around the mail carrier’s cratering finances, the Postal Service today announced that it’s changed a long-standing policy so living people can be depicted on postage stamps. Under the previous guidelines, an individual had to be dead for at least five years to be so honored; starting next year, Americans “will see acclaimed musicians, sports stars, writers, artists and nationally-known figures” on stamps while they’re still with us, according to a USPS news release.
Postal officials are inviting members of the public to submit the top five living individuals they would like to see on stamps via Facebook and Twitter. People can also actually use a stamp to write the Citizens’ Stamp Advisory Committee, c/o Stamp Development, Room 3300, 475 L’Enfant Plaza SW, Washington, DC 20260-3501. And before anyone rushes to nominate their grandkids (or even a favorite mail carrier), keep in mind that the advisory committee is looking for folks “who have made extraordinary contributions to American society and culture,” according to the official guidelines.
2) Back to grim realities: The Postal Service’s four unions are wrapping up preparations for tomorrow’s nationwide “Save America’s Postal Service” day, which will feature rallies in all 435 congressional districts from 4 p.m. to 5:30 p.m. local times. The chief goal is to build public and political support for legislation by Rep. Stephen Lynch, D-Mass., that could open the door for the Postal Service to take advantage of tens of billions of dollars in pension overpayments identified by an outside actuary and the agency’s inspector general. The bill already has 215 co-sponsors, including some Republicans, but has so far gone nowhere in the House, where other GOP lawmakers dispute whether any such overpayments occurred.
3) On Friday, Sen. John McCain, R-Ariz., jumped into the scrum on the other side by introducing a Senate version of a postal overhaul sponsored by Rep. Darrell Issa, R-Calif., that was just approved last week by a House oversight subcommittee. McCain has a history of—at least every now and then—working successfully across party lines, but the debate preceding that subcommittee vote showed just how deep partisan divisions run on postal issues.
4) And, as federal agencies undergo another bout of shutdown jitters, let’s not forget that the Postal Service has a stake in the latest Capitol Hill showdown. Under the continuing resolution that would keep agencies operating past the Oct. 1 start of the new fiscal year, the deadline for the Postal Service to make a $5.5 billion retiree health care prepayment would also be pushed back from Sept. 30 to Nov. 18. If lawmakers don’t pass the CR by Friday, the Postal Service is headed for an embarrassing default, according to repeated warnings from Postmaster General Patrick Donahoe.
TPM just scored a nice scoop today with a look at Republicans’ wish list for the deficit reduction super committee. What’s likely to be most alarming to federal employees is Rep. Darrell Issa’s idea to temporarily freeze step increases for federal employees:
[O]ne idea identifies “Chairman Issa” as the source . . . . Issa’s idea would eliminate “periodic step increases” for federal employees’ salaries and is estimated to save $1 billion.
“Federal employees receive periodic step increases driven largely by passage of time equivalent to three percent of basic pay,” the doc states.
Issa, chairman of the House Oversight and Government Reform Committee, is a vocal critic of the federal pay system, and earlier this year tried to freeze step increases to broaden the White House’s partial pay freeze.
TPM said another proposal, attributed to the House Speaker John Boehner and other GOP leaders, would increase current employees’ contributions to the Federal Employees Retirement System by half a percentage point. (TPM doesn’t say how many times the contribution would be hiked, but all previous discussions about contribution hikes have revolved around increases for three years.) This would be 0.1 percentage points more than the White House proposed earlier this week.
And the GOP leadership is also reportedly looking at upping new employees’ contributions to 4 percent of pay, instead of the current FERS contribution rate of 0.8 percent.
TPM also lists other ideas, which have each been floated at one time or another over the last year:
- Eliminating pensions for all new employees, saving $4.9 billion.
- Cutting the federal work force.
- Eliminating cost-of-living increases for federal workers. This would essentially extend the partial two-year pay freeze, which holds pay scales where they were in 2010, but does not touch step increases.