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The United States Postal Service (USPS) has delivered communications for more than two centuries. During thenineteenth century, the USPS helped to expand the boundaries of the United States by providing efficient andreliable communication across the country. Between 1790 and 1860 alone, the number of post offices in theUnited States grew from 75 to over 28,000. With this growth came job opportunities for postal workers and a boom in the cross-country rail system. The twentieth century brought substantial growth to the USPS, including large package delivery and airmail. Over the past decade, however, total mail volume has decreased considerably as competition from electronic mail and various package delivery companies has taken business away from the USPS.

The loss of revenue has prompted the USPS to consider cutting back on delivery days and other services.Carefully read the following seven sources, including the introductory information for each source. Then synthesizeinformation from at least three of the sources and incorporate it into a coherent, well-developed essay that argues a clear position on whether the USPS should be restructured to meet the needs of a changing world, and if so, how.

Make sure your argument is central; use the sources to illustrate and support your reasoning. Avoid merelysummarizing the sources. Indicate clearly which sources you are drawing from, whether through direct quotation,paraphrase, or summary. You may cite the sources as Source A, Source B, etc., or by using the descriptions inparentheses.

Privatizing the U.S. Postal ServiceTad DeHaven

OverviewThe U.S. Postal Service is a branch of the federal government. It is headed by a Postmaster General and a Board of Governors, with further oversight provided by the Postal Regulatory Commission. However, ultimate authority over the USPS rests with Congress. The USPS is structured like a business in that revenues from the sale of postal products generally cover costs, and it receives virtually no federal appropriations.1 The organization is the second-largest civilian employer in the United States—after Wal-Mart—with about 600,000 workers. If the USPS were a private company, it would rank about 28th on the Fortune 500 list of largest companies.

While the USPS is structured like a business, Congress often prevents it from actually operating like a private company, such as taking actions to reduce costs, improve efficiency, or innovate in other ways. The agency is also obligated by statute to provide mail services to all Americans, irrespective of where they live and the cost of serving them. Furthermore, it is required to deliver first-class mail at a uniform price throughout the nation.

While Congress imposes various costs and obligations on the USPS, it also protects it from competition. The USPS has a legal monopoly over first-class mail and standard mail (formerly called third-class mail). Thus, we have a postal system that encourages high costs and inefficiency, while preventing entrepreneurs from trying to improve postal services for Americans. The USPS is in deep financial trouble as a result of declining mail volume, bloated operating expenses, a costly and inflexible unionized workforce, and constant congressional meddling. At the same time, electronic communications and other technological advances are making physical mail delivery less relevant.

America’s postal system needs a radical overhaul. This essay discusses the problems of the USPS and looks at some recent postal reforms abroad.2 It concludes that taxpayers, consumers, and the broader economy would stand to gain with reforms to privatize the USPS and open U.S. mail delivery up to competition.

BackgroundArticle 1, Section 8 of the Constitution says that Congress shall have the power "to establish Post Offices and post Roads." Thus, the Constitution allows the government to get involved in postal services, but that doesn’t mean that the government has to be involved, let alone be granted a monopoly over mail. PAGE 1 OF 7

Source Information:

Author: Tad DeHavenTitle: Privatizing the U. S. Postal ServiceDate Published: November 2010Website: http://www.downsizinggovernment.org/usps Agency: Cato Institute

Prior to the Postal Act of 1863, intercity letters were either held at the destination post office for pick-up or delivered by an independent contractor. The Postal Code of 1872 extended the postal monopoly to the delivery of local letters, banning intracity private carriers. These private carriers, which numbered 147 at one time, had been innovative: for example, they introduced stamps before the Post Office did.3Prior to 1971 the government provided postal services through its U.S. Post Office Department, an agency that received annual appropriations and heavy subsidies from Congress. Members of Congress influenced many aspects of the Post Office Department’s operations, such as the pricing of postal products and the selection of managers.

The Postal Reorganization Act of 1970 replaced the Post Office Department with the U.S. Postal Service. The USPS was made an independent agency of the executive branch and designed to be financially self-sufficient, relying on the sale of postage, mail products, and services for revenue. The USPS is required by law to cover its costs, but can borrow from the U.S. Treasury subject to a limitation of $3 billion per year and a total debt ceiling of $15 billion.

As a federal organization, the USPS benefits from numerous other privileges. The USPS is exempt from vehicle licensing requirements, sales taxes, and local property taxes. It doesn’t have to pay parking tickets, and it has eminent domain powers. It pays to itself the income taxes that it would owe if it were a private business.

The USPS is mandated by Congress to provide the American public with "universal service," which includes uniform prices, access to services, and six-day delivery nationwide. To ensure financial support for these obligations, Congress grants the USPS a statutory monopoly on the delivery of first-class and standard mail and restricts mailbox access to mail delivered by the USPS.

The USPS’s express mail and package delivery services are subject to competition, which comes chiefly from FedEx and the United Parcel Service (UPS). However, the USPS’s monopoly prevents other companies from delivering first-class and standard mail, with an exception for urgent mail, and private companies are not allowed to place their deliveries in mail boxes. The USPS does face increasing competition from correspondence sent via a variety of electronic alternatives. While the USPS may have a statutory monopoly over a portion of physical mail, new technologies are allowing Americans to bypass the organization on all of its lines of business.

Declining RevenuesAlthough the USPS is structured to operate like a self-supporting business, this model is on borrowed time. From 2007 to 2010, the USPS lost $20 billion, and its debt increased from $2.1 billion to $12 billion. The USPS expects to hit its $15 billion legal borrowing ceiling in 2011. As a result, the Government Accountability Office placed the USPS on its "high risk" list of troubled federal agencies in 2009.5 These financial problems are not temporary. Postal experts expect a future of stagnant-to-declining revenue for the USPS with stable-to-increasing expenses unless Congress makes major reforms.

In 2009, USPS revenues totaled $68 billion, or $7 billion lower than 2008. About 88 percent of the revenue was generated by "market-dominant" products including first-class mail and standard mail (bulk

advertising and direct-mail solicitations). First-class mail, which is the most profitable, accounted for 52 percent of those revenues. The remaining 12 percent of the USPS’s revenue came from competitive products including Express Mail, Priority Mail, bulk parcel post, and bulk international mail. The decline in USPS revenues has been driven by a large drop in mail volume, particularly for profitable first-class mail. The recent recession has hurt USPS finances, but the demand for mail delivered by the USPS has been steadily falling as consumers and businesses have shifted to electronic alternatives. First-class mail volume has fallen 19 percent since 2001, and it is projected to fall another 37 percent by 2020. From 2006 to 2009 total mail volume dropped from 213 billion to 177 billion items, a 17 percent decrease. By 2020 the USPS estimates further volume declines of about 15 percent, to 150 billion pieces, which would be the lowest level since 1986.

The 2006 Postal Accountability and Enhancement Act terminated a cumbersome rate-setting structure and gave the USPS more flexibility to set prices. But the law required that average rates in each market-dominant mail class not increase faster than the consumer price index. The USPS can request that the Postal Regulatory Commission approve a rate increase above the price cap on the basis of extraordinary or exceptional circumstances. The PRC recently rejected a USPS request for an exigent rate increase. Although it acknowledged that the recession has led to a substantial decline in mail volume, the PRC turned down the request because the rate adjustments represented "an attempt to address long-term structural problems not caused by the recent recession."

Looking forward, increasing postal rates may boost revenue in the short run, but would risk depressing mail volume and revenue in the long run, in part by accelerating the diversion of mail to competing electronic alternatives. Higher rates would also damage millions of businesses dependent on mailing and currently stuck with a monopoly provider of those services.

The USPS has asked Congress for permission to offer new nonpostal products and services (such as banking and insurance) to generate additional revenue. However, the USPS has a poor track record when it comes to introducing new products, and allowing a government entity to compete with the private sector in nonpostal markets would be unfair and unwise.

Bloated CostsDespite the USPS’s ability to achieve $10 billion in cost savings from 2007 to 2009, it has not been enough to offset the recent rapid decline in revenue. It also hasn’t been enough to prevent the upward trend in the organization’s cost per piece of mail, which rose from 34 cents in 2006 to 41 cents in 2009. If mail volume continues to decrease and the number of postal addresses increases, the cost to deliver each piece of mail will continue to rise while revenue per delivery point falls. A key driver of mail delivery costs is the congressionally mandated obligation to serve virtually every mailing address, regardless of volume, six days a week. Fulfilling this "universal service" obligation results in the USPS having large fixed costs, including the costs of more than 36,000 postal outlets, 215,000 vehicles, and 600 processing facilities.

However, even given the universal service obligation, the Government Accountability Office and USPS officials believe that more than half of these processing facilities aren’t needed. Why aren’t they closed down to save money? The GAO notes that the USPS faces "formidable resistance" from members of Congress and postal unions when attempting to close or consolidate facilities.

The USPS is required to provide services to all communities, including areas where post offices have low traffic and are not cost effective. Before closing a post office, the USPS must provide customers with at least 60 days of notice before the proposed closure date, and any person served by the post office may appeal its closure to the Postal Regulatory Commission. The USPS cannot close a post office "solely for operating at a deficit."

Members of Congress whose districts would be affected by a post office closure often raise a big fuss. Last year, for example, the USPS proposed consolidating 3,200 postal outlets, but following a congressional outcry, the number under consideration was reduced to a paltry 162. That is no way to run a business.

Full post offices are more costly to operate than other means of serving customers. The average post office transaction cost 23 cents per dollar of revenue in 2009 while the average transaction at a contract postal unit cost just 13 cents. Post offices used to generate almost all postal retail revenue, but 29 percent is now generated online through usps.com and other alternative channels. In 2009 post offices recorded 117 million fewer transactions than in 2008. Four out of five post offices are operating at a loss.21 However, the postal network’s overcapacity has drawn little corrective action from Congress. In fact, legislation introduced in the House with 102 cosponsors would apply the burdensome procedures for closing post offices to other postal outlets as well. Congress is actively working against the modernization of the U.S. postal system.

Excessive labor costs are another major problem. While the USPS has been able to eliminate a substantial number of employees through attrition, the USPS’s predominantly unionized workforce continues to account for 80 percent of the agency’s costs despite increased automation. The USPS estimates that, in the absence of changes, its total workforce costs will soar from $53 billion in 2009 to $77 billion in 2020.

As of 2009 the USPS had financial liabilities and unfunded obligations of $88 billion. Unfunded obligations for retiree health benefits accounted for $52 billion of the total. The 2006 Postal Accountability and Enhancement Act addressed this unfunded liability by requiring the USPS to make a special payment of more than $5 billion annually from 2007 through 2016 to build up a retirement fund. This was a good idea to reduce possible liabilities on future taxpayers.

However, USPS revenues began plummeting shortly after the PAEA’s enactment. In 2009 Congress relieved the USPS by allowing it to defer $4 billion of its scheduled $5.4 billion retirement payment for the year. Facing the same situation this year, Congress adjourned without providing the USPS with similar relief. As a result, the USPS could soon run out of operating funds.

Critics argue that the pre-funding payment schedule is too aggressive, particularly in light of the USPS’s current financial struggles. However, the USPS faces a bleak future regardless of the payments. As the GAO notes, allowing the USPS to continue deferring the payments will "increase the risk that in the future USPS will not be able to pay these obligations as its core business continues to decline and if sufficient actions are not taken to restructure operations and reduce costs."

Opponents of pre-funding USPS retiree health benefits argue that private companies and the rest of the federal government are not legally required to do so. That is largely irrelevant. Retiree health care

PAGE 4 OF 7

coverage is an increasingly rare perk in the private sector, and the federal government’s financial management is nothing to emulate. In 2008, only 17 percent of private sector workers were employed at a business that offered health benefits to Medicare-eligible retirees, down from 28 percent in 1997. Postal UnionsMore than 85 percent of USPS employees are covered by collective-bargaining agreements. Among other provisions, these agreements include regular raises based on cost-of-living allowances. The other 15 percent of employees receive regular pay increases through a pay-for-performance program.While the Postal Service negotiates with its unions to structure compensation, federal statutes hamper the USPS’s ability to craft market-based pay and benefits packages. The potential for mandatory arbitration gives the unions a big advantage in negotiations with management. When unions demand higher wages, more generous benefits, and added work rules, arbitrators usually give them part of what they want. And when weighing a decision on union contracts, arbitrators do not have to take the USPS’s financial situation into consideration. Not surprisingly, unions have been able to extract lucrative compensation packages from the USPS over the decades.

The Government Accountability Office notes that the USPS covers a higher proportion of employee premiums for health care and life insurance than other federal agencies. USPS workers participate in the federal workers’ compensation program, which generally provides larger benefits than the private sector. Also, instead of retiring when eligible, USPS workers can stay on the "more generous" workers’ compensation rolls.

In 2009 the average postal employee received about $79,000 in total compensation.35 This compares to $61,000 in wages and benefits received by the average private sector worker that year.31 A recent study by labor economist James Sherk found that postal workers earn 15 to 20 percent more per hour than comparable workers in the private sector. Postal expert Michael Schuyler reviewed the studies on postal compensation and found the following: Although the law says that postal employees should receive wages and benefits comparable to what they could earn in the private sector, the majority of economic studies examining the issue have concluded that a postal pay premium of 20%– 25% exists if just wages are counted and about 35% if the Service’s very generous benefits are also included.

Another factor that reduces postal service efficiency is that union contracts inhibit the flexibility of USPS leaders in managing their workforce. For example, most postal workers are protected by "no-layoff" provisions, and the USPS must let go lower-cost part-time and temporary employees before it can lay off a full-time worker not covered by such provisions.

Collective bargaining agreements also make it difficult for the USPS to hire part-time workers, which would help to reduce labor costs. Hiring workers who can work less than eight-hour shifts would also give managers needed flexibility to address seasonal and weekly fluctuations in workload. The USPS inspector general recently pointed out that the USPS’s utilization of part-time workers is less than that of UPS, FedEx, and postal systems in other countries. While only 13 percent of the USPS’s workforce is part-time, the figures for UPS and FedEx are a respective 53 and 40 percent. Germany’s Deutsche Post, which has been privatized, employs a workforce that is 40 percent part-time. The story is similar at many other foreign posts, such as the Netherlands' postal service, TNT, which has also been privatized. TNT recently told its union that it would be "migrating towards an organization that employs mainly part-time staff."

Unfortunately, already generous compensation combined with the USPS’s poor financial condition hasn’t stopped the postal unions from demanding more money and opposing greater flexibility. The

American Postal Workers Union, which represents more than 200,000 workers, recently entered collective bargaining negotiations for a new contract. In an interview, APWU president William Burrus called a pay increase for his members an "entitlement" and stated that his union wants "more control over activities at work, more money, better benefits—we want more." Burrus also called the sensible suggestion that arbitrators should be required to consider the USPS’s financial position "antidemocratic."

Lessons from AbroadDeclining demand and an inability to cut costs are not unique to the USPS, as government postal services in other countries have experienced similar problems. However, numerous countries have responded by shifting away from a government-run postal monopoly toward market liberalization, including privatizing the government postal agency and opening postal markets to entrepreneurs. The United States has lagged behind many countries on postal reforms. As a result, the U.S. rates near the bottom of the Consumer Postal Union’s 23-country "Index of Postal Freedom." For some people, the idea of liberalization conjures up fears of a decline in the quality or universality of postal service. However, those things have not happened in the countries that have introduced pro-market postal reforms. Rather, these liberalizing countries have shown the ability to offer affordable, reliable, universal, and more efficient postal-delivery services. In many countries, reforms have been pursued through the commercialization and corporatization of the postal service. Under such reforms, the government retains full or partial ownership but introduces modern practices involving management, labor compensation, finance, marketing, and capital investment.

In some countries the private sector has taken large ownership stakes. For example, 69 percent of Germany’s formerly government post office Deutsche Post is now privately owned. In the Netherlands, 100 percent of its formerly government post office is privately owned as TNT Post. The British government is considering selling off to private investors its ownership of the Royal Mail. At least 10 percent of the shares may be reserved for postal employees, which would have the benefit of reducing the unions’ incentive to take actions negatively affecting the company’s bottom line. While some nations have partly or fully privatized their post offices, a parallel trend is for countries to reduce or eliminate postal monopolies and allow for entrepreneurs to offer competitive services. New Zealand and Sweden repealed their postal monopolies in 1998 and 2003, respectively, and Germany and the Netherlands followed suit in 2008 and 2009, respectively. In 2008, the European Union announced a plan to eliminate the national monopolies of all EU member states by 2013.

Postal liberalization has produced more efficient services in many countries, but governments continue to impose unwarranted postal regulations in even the most reformed markets. For example, governments still typically mandate that universal service obligations be met, and they often also mandate certain service standards and pricing.

In New Zealand, for example, the government has a "deed of understanding" with the New Zealand Post under which it must maintain a specified number of post offices, keep the price of a stamp below a certain level, and refrain from implementing a rural service fee. Also, New Zealand Post must provide 95 percent of households with letter-delivery service six days per week in addition to other minimum service standards. Some patterns have emerged regarding the outcome of postal liberalization. Productivity has increased, costs have decreased, the universal service obligation continues to be met, service quality measured by on-time delivery has not dropped, and overall customer satisfaction seems

to have increased. PAGE 6 OF 7

Another common result of postal liberalization is diversification of postal organizations into nonpostal activities. Consultants at Accenture have found that diversification not only has a measurable impact on the performance of international posts, but that it is what ultimately distinguishes high performers from low performers. America’s relatively dynamic economy is particularly suited for the diversification opportunities that would arise under postal liberalization.

Germany’s former postal monopoly, Deutsche Post, illustrates the type of transformation possible by liberalization. Today, the private Deutsche Post World Net has changed its compensation structure, imported managers from other industries, modernized the mail and parcels network within Germany, and developed new products such as hybrid mail and e-commerce. The company now has interests in not only the traditional mail and parcels business but also express mail logistics, banking, and more. Opening up America’s postal markets to new competitors promises great benefits for consumers because entrepreneurs have strong incentives to innovate, improve quality, and reduce costs. The universal service mandate could become less of an issue as entrepreneurs figure out cheaper and better ways to deliver mail to rural areas. Sam Walton, Henry Ford, and other great entrepreneurs made their fortunes by bringing affordable products and services to the masses. We need these sorts of innovators in the postal business.

Former Postmaster General William J. Henderson (1998–2001) stated in a Washington Post op-ed following his retirement that "what the Postal Service needs now is nothing short of privatization." Henderson noted that while privatizing the USPS might sound radical, "it’s a concept the rest of the world has been taking seriously for years."

ConclusionsThe USPS is in a financial death spiral because of the myriad factors discussed. It faces a projected $238 billion in losses over the next 10 years under the status quo. To avoid a large and growing burden from being foisted on taxpayers in coming years, the USPS should be privatized and postal markets open for competition from FedEx, UPS, and upstart entrepreneurs.

With privatization, Congress should end its micromanagement of the nation’s postal services. It should rescind the complex laws and regulations on delivery schedules, price caps, restrictions of facility shut-downs, and other business decisions. Such congressional meddling ultimately hurts the consumers that any postal business is supposed to serve by pushing up costs.

Consider the USPS’s recent request that Congress allow it to end Saturday mail delivery. Congress has blocked that move, which will raise USPS costs and ultimately result in higher stamp prices. The Saturday mail delivery issue also highlights the lack of consumer choice in the current system. If the USPS decides not to provide Saturday service, customers should be free to contract with other commercial entities to provide Saturday service, or service for any day of the week for that matter.

Policymakers resistant to reform often depict the USPS as a "national asset" that "binds the nation together." But these days, it’s the Internet and our telecommunications networks that bind families and businesses together across the nation. It’s time to let go of the nostalgia for the USPS and bring America’s postal services into the 21st century with privatization, open competition, and entrepreneurial innovation.

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The Truth About The Post Office's Financial Mess October 24, 2011

By: Lori Ann LaRocco

The financial woes of the U.S. Postal System have become a point of contention on Capitol Hill. The Postal Service is supposed to make a $5.5 billion payment to its retiree health care fund by November 18th... but doesn't have the money. US Postal Service workers have a retiree health care benefit in addition to their pension. Before Congress passed the Postal Accountability and Enhancement Act of 2006, the USPS operated under a pay-as-you-go model for retiree health care funding. The new law requires the Postal Service to pre-fund its benefit obligations. "The idea is that enough money is saved over the course of a career that the benefit is fully paid for by the time the worker retires. Thanks to these prefunding payments, the Postal Service has greatly reduced its unfunded obligations for retiree health benefits. At the end of fiscal year 2010, these obligations were under $49 billion – a substantial sum, but much more manageable. If the Postal Service continues making its prefunding payments, its unfunded obligations for retiree health benefits will be around $33 billion by the end of the decade. And the postal service will be on course to pay these benefits over time," a Congressional insider explained.

But this pre-funding has become a lightning rod of controversy. Members of the postal workers union say the pre-funding requirement has created a fiscal mess. Some people have even claimed that law has the effect of requiring the postal service to fund retirement obligations for people who are not yet employed by the USPS--potential future employees. No one ever intended the law to work that way. And, in fact, it doesn't. Although accounting rules require the postal service to calculate future liabilities, including those for projected future employees, the law only requires pre-funding of obligations to actual current and past employees.

In light of all the controversy, House Oversight Committee Chairman Darrell Issa (R-CA) sent off a series of questions on the pre-funding controversy to the Congressional Research Service to get to the bottom of the question: is pre-funding the reason for the USPS fiscal woes?

C-Suite Insider has exclusively obtained the CRS Memorandum on Postal Service Retiree Health Issue to Chairman Issa as well as an email explaining in further detail their findings. Below is a verbatim email correspondence between the CRS and Chairman Issa's office on the prefunding of 75 years of retiree health care benefits in just 10 years. "The confusion over 75 years may be due to an "accounting" and not an "actuarial or funding" issue. They only have to fund the future liability of their current or former workforce. This would include some actuarial estimate about the mortality rates of their current workers (I.e. how long they live). So a 25 year old worker would have an average life expectancy (from birth) of 78.7 years. Thus, they would have to project future retiree health benefits for this individual up to about 54 years in the future. But for accounting purposes they must estimate the future liability over a 75 year period (according to OPM financial accounting guidelines). In this case, they would make some assumptions about new

Source Information:

Author: Lori Ann LaRocco (CNBC Senior Producer)Title: The Truth About the Post Office’s Financial MessDate Published: October 24, 2011Agency: CNBC “NetNet” online websiteSite: http://www.cnbc.com/id/45018432

entrants into the workforce and addresses your second question. Theoretically, these new entrants could include someone who is not born yet. While they have to account for these future liabilities on their financial statements they do not have to fund them if they are not related to their current or former workforce."

Based on the findings of this memorandum, I asked Chairman Issa what his message is to the US Postal Service Unions who say Congress is to be blamed for this crisis.

Chairman Issa: Union leaders must understand that there is no easy fix to a crisis created by declining mail revenues. The often non-existent accounting issues unions want to talk about don’t address fundamental changes to delivery created by the growth of the Internet. Union leaders need to work with, not against, Congress on postal reform, because the alternative is a possible shut-down of the Postal Service next summer.

LL(LARI LAROCCO): The Postal unions are urging Congress to allow the Postal Service to stop making these prefunding payments. What would happen?

Chairman Issa: The Postal Service's unfunded liabilities will soar to around $100 billion by the end of the decade. This will reverse hard-won progress. The unfunded obligations will be 25% higher than they were before the Postal Service started its prefunding payments. With declining revenue, this huge unfunded liability would be a burden that the Postal Service could not afford to bear.

LL: So bottom line, the unions claim of the postal service pre-funding pensions for future workers is false?

Chairman Issa: Absolutely false. The non-partisan Congressional Research Service recently found that pre-funding requirements match Congress’ intent when they were enacted in 2006. The intent is to ensure that the growing unfunded liability for retiree health care for current employees is covered. These employees negotiated for and earned these benefits with their work, so USPS should pay for them. Likewise, USPS must be self-sustaining, and not funded by the taxpayers. Prefunding is a prudent measure to protect employee’s earned benefits and taxpayer money.

LL: Are the postal unions resorting to fear tactics and myths to scare Americans about what is really going on?

Chairman Issa: Postal workers who have been writing their members of Congress or protesting are just responding to the information that they have been given by their own union leadership. They have been told this money is not covering their benefits, but in fact covering benefits of people who haven’t been born yet. That’s absolutely false.

They have been told there is an overpayment in another pension account that could cover their retiree health care benefits. The non-partisan Government Accountability Office, which audits financial reports for the entire federal government, has weighed in to clearly state that allegation is false. They have been led to believe outrageously false things about Congress “stealing” their money to pay for other things. The truth will get out there and postal union members will finally understand we’re looking out for them as well as the taxpayer. Postal reform is necessary to secure their earned benefits. LL: There are a lot of plans out there when it comes to reforming and strengthening the US Postal System including yours. What is the viability of a Senate Bill?

Chairman Issa: What Senate bill? The Senate has a number of different proposals, including one that mirrors the House proposal, but haven’t been able to move forward with anything. So far, only the Issa-Ross Postal Reform Act has shown that it has the necessary support to advance. I believe there needs to be a negotiated bill that can pass both the House and Senate, but so far only the House bill has demonstrated an ability to serve as a viable beginning for discussion.

LL: Americans are tired of bailouts. Should the US Government bailout the US Postal Service?

Chairman Issa: Even if taxpayers forked over every dollar that the Postal Service has ever asked for through multiple backdoor bailout requests, it would only kick the can down the road. The Postmaster General told New York City letter carriers that even if their preferred bailout bill was signed into law they would still probably shut down next summer. A bailout is simply not an option. We need real reform.

LL: If the postal service cannot pay, American taxpayers will be on the hook for those postal benefits correct?

Chairman Issa: That’s correct. Postal employees are federal employees. All federal pension and retirement benefits are paid from the U.S. Treasury. Since the Postal Service’s operating costs are collected from ratepayers, the Postal Service pays the U.S. Treasury for the costs of federal pension benefits postal workers are legally entitled to receive. Even if the Postal Service cannot or does not make these payments, postal workers are still entitled to pension benefits from the Federal government. So it’s ultimately taxpayers who get stuck with the bill if the Postal Service can’t pay the Treasury for the costs of pensions. Check out this video for an animated explanation.

LL: Based on the restructuring proposed, how many jobs are expected to be lost?

Chairman Issa: Downsizing the Postal Service can be done without major disruption to postal workers in the middle of their careers. There are 150,000 postal employees eligible to retire today, with full benefits. In the next four years, there will be an additional 100,000 employees ready to retire with full benefits. The Postmaster General has proposed changes that would shrink the workforce by 220,000 individuals. If we can agree on a method to incentivize retirement or focus workforce reductions on those who can retire with full benefits, downsizing can occur without adding to the unemployment rolls.

LL: For those Americans who do not want to see their Saturday mail delivery discontinued or post office closed. What's your message to them?

Chairman Issa: Personally, I do not want to see the Postal Service end Saturday delivery or see post offices closed. But the Postal Service is losing $10 billion a year and needs to find ways to cut costs. It’s a common refrain in this debate to hear particular stakeholders express support for cutting costs – but just not costs that affect expensive aspects of the Postal Service that are most individually important to them. Saturday delivery is a benefit we all enjoy but, when we look at the finances, it is something that may not be worth the $3 billion annual cost. According to polling by Quinnipiac University, 79% of voters favor ending Saturday mail delivery to help solve the Postal Service's financial problems.

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Do We Really Want to Live Without the Post Office?Published in the February 2013 issue

The postal service is not a federal agency. It does not cost taxpayers a dollar. It loses money only because Congress mandates that it do so. What it is is a miracle of high technology and human touch. It's what binds us together as a country.

The letter is mailed from Gold Hill, Oregon.

The eleven hundred residents of this lingering gold-rush town, mostly mechanics and carpenters and retail clerks in other places, wake with the sun and end their day with a walk to the aluminum mailbox bolted to a post at the edge of their yard. In between, Carrie Grabenhorst heads out of town on highway 99, follows the Rogue River, and turns right on Sardine Creek Road. She turns left at a large madrone tree and heads up a quarter mile of dirt road, takes the right fork, goes past the sagging red barn to a white clapboard house with green trim, where she takes a dog biscuit from her pocket and offers it to the large golden retriever. It's a Monday, about 2:00 p.m. The dog stops barking. This is the usual peace, negotiated after thousands of visits over eighteen years.

Often Grabenhorst's elderly customers are waiting at the door, or even by the mailbox, for her right-hand-drive Jeep to edge onto the shoulder. Many of them are alone all day. Their postal carrier is that one reliable human contact, six days a week. Some are older veterans. Quite a few have limited mobility, and it isn't uncommon for her to lend a hand with an errand; she's been known to pick up milk in town and bring it along with the mail. Grabenhorst drives seventy miles a day and makes 660 deliveries. On a typical day, that might include fifty packages of medicine.

Her route is one of 227,000 throughout America. On the South Side of Chicago, carriers walk cracked sidewalks, past empty lots and overfilled projects. In the suburbs of Phoenix, mail trucks deliver to banks of mailboxes outside gated communities. In Brooklyn, they pushed their carts up sidewalks and ducked into bodegas on September 11, as they always do. Residents say they were comforted to see their postal workers still making the rounds, the government still functioning. In rural Alaska, mail comes by

Source Information:

Title: Do We Really Want to Live Without the Post Office?Author: Jesse LichtensteinSource : Esquire (magazine)Date of issue: February 2013Website: http://www.esquire.com/features/post-office-business-trouble-0213

snowmobile and seaplane. In chaps and a cowboy hat, Charlie Chamberlain leads a train of postal mules down to the bottom of the Grand Canyon, where a tribe of Havasupai Indians lives. Wearing blue trunks and a ball cap, Mark Lipscomb delivers letters by speedboat up and down the Magnolia River in Alabama.

Want to send a letter to Talkeetna, Alaska, from New York? It will cost you fifty dollars by UPS. Grabenhorst or Lipscomb can do it for less than two quarters: the same as the cost of getting a letter from Gold Hill to Shady Cove, Oregon, twenty miles up the road. It's how the postal service works: The many short-distance deliveries down the block or across the city pay for the longer ones across the country. From the moment Benjamin Franklin was appointed the first postmaster general in 1775, the purpose of the post office has always been to bind the nation together. It was a way of unifying thirteen disparate colonies so that the abolitionist in Philadelphia had access to the same information and newspapers as the slaveholder in Augusta, Georgia.

Today the postal service has a network that stretches across America: 461 distribution centers, 32,000 post offices, and 213,000 vehicles, the largest civilian fleet in the world. Trucks carrying mail log 1.2 billion miles a year. The postal service handles almost half of the entire planet's mail. It can physically connect any American to any other American in 3.7 million square miles of territory in a few days, often overnight: a vast lattice of veins and arteries and capillaries designed to circulate the American lifeblood of commerce and information and human contact.

Grabenhorst sports a few blond streaks in her brown bangs, which curl over her forehead, perfectly framing her azure eyes and chiseled cheekbones. Rural carriers don't wear official uniforms, so today she's in shorts and an Oregon State T-shirt. Letters arrive at the post office in Gold Hill already sequenced in the order Grabenhorst will deliver them, but the "flats" — magazines, catalogs, large envelopes — and packages do not, so in the back of the post office she and her two colleagues stand at their own three-sided bank of metal slots, hundreds of them, one for each address, and merge the separate streams — a process called "throwing the mail."

As the junior carrier, Grabenhorst has the peanut route. Paula Joneikis is the senior carrier, thirty-three years on the job; she took over her route from another lifer named Bev Washburn. That's how these jobs work — when you get a route, you hold on to it, maybe even try to pass it on to someone in your family. Failing that, you take a younger colleague under your wing and share your particular wisdom: the life history of your customers, how this one is related to that one, when so-and-so got to town, when so-and-so split up. Joneikis has a lot of "silver foxes" on her route — she tries to remember who's recently had an operation, and she'll come to the door with the mail. "We're a lifeline to these people," she says.

Step 1: Mail Pickup Carrie Grabenhorst (inset) picks up a letter in Oregon bound for New York City around 2:00 p.m. Two hours later, she is back at the local post office, where she and Paula Joneikis (bottom) bundle the bins and trays of outgoing mail onto rolling carts, which are then loaded onto an eighteen-wheeler for the thirteen-mile drive to the Medford Mail Processing Center.

"All of these people are family," Grabenhorst adds. She color-codes all 660 addresses for her morning sort: a little pink flag

affixed to a slot means the customer is on vacation; a yellow flag means the whole family has moved; an orange flag is for customers who don't want packages left when they aren't home; a green flag means an individual has left the family: moved out, gone to college, divorced, died. When she gets to their driveway, she'll put the bundle into their box, her box. By law, only the postal service can put mail into a mailbox. It's a monopoly that ensures every citizen, in every square mile of the country, has the ability to receive mail and that the government can reach every citizen. No branch of government serves us so consistently, so intimately — a federal employee literally touching every house in America every day but Sunday.

In mid-November, the postmaster general, Patrick Donahoe, reported that the post office had lost $15.9 billion for the year and was operating on just a few days' cash flow, having reached its legal debt limit. He all but begged Congress to take action. Mail was down 5 percent from the year before, and wages and benefits and other worker-related costs were an unsustainable 80 percent of the postal service's $81 billion operating expenses.

But nobody wants to hear that more than 70 percent of those losses were for extraordinary budget obligations mandated by Congress, or that the postal service posted its thirteenth-straight quarter of productivity gains. In a nation obsessed with cutting budgets and government fat, there is no better target than the federal postal worker who will have her route delivering paper mail for life, and then try to pass it on to her daughter.

Eighty-five percent of America's critical infrastructure is controlled by the private sector. We let private companies fight our wars; we have 110,000 defense contractors in Afghanistan compared with 68,000 American troops. We let private companies lock up 16 percent of our federal inmates and instruct 10 percent of our students. They provide our phone service and Internet access and air travel and hospital care. Surely, many believe, private companies can deliver our mail better and faster and cheaper than the federal government.

If you work with actual pieces of mail — if you are a carrier, a handler, a clerk, but not an administrator — it is said that you "touch the mail." The postal service has more than half a million full-time workers and a hundred thousand contract employees, the vast majority of which are mail touchers. Each morning, Grabenhorst enters into a ledger she keeps at her workstation exactly how much mail she's thrown and will be delivering that day. In Washington, D.C., they count in billions of pieces, but carriers talk about mail volume in feet — the width of a mail stack laid on its edge, face to flap.On this unremarkable Monday, she'd written 14.75 feet. She flipped the pages of the ledger back to the previous year, to the same date: 17.5 feet.

That we're sending less mail is not debatable. Nor is it debatable that the post office as we've known it for the past forty years, one built for speed and brute force in sorting and distributing an ever-surging flood of paper documents, is outdated in our digital world. This isn't a story about whether we could live without the post office. It's about whether we'd want to.

Great Moments in Postal History1775: Benjamin Franklin is appointed the first postmaster general.

1811: Fast-moving steamboats replace rafts and rowboats for mail transportation.

1833: Abraham Lincoln is appointed postmaster of New Salem, Illinois, at the age of twenty-four.

1847: The first U.S. postage stamps are issued, featuring Ben Franklin on the five-cent stamp and George Washington on the ten-cent stamp.

1860: The Pony Express is contracted as a mail carrier until the transcontinental telegraph line is finished.

1933: President Roosevelt's New Deal sponsors the placement of more than a thousand public murals and sculptures in post offices to boost morale during the Great Depression.

1957: First semiautomatic sorting machine installed in Silver Spring, Maryland, doubling the sorting capabilities of clerks.

1958: Harry Winston sends the Hope Diamond to the Smithsonian Institution via first-class mail from New York City to Washington, D.C., for $2.44.

1963: ZIP codes introduced. 1970: President Nixon changes the postal service from government Cabinet department to independent federal agency.

2006: The last year the postal service turned a profit — $900 million

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Losing Money Isn't the U.S. Postal Service's Only Problem

While your mailman may brave rain, snow and dark of night to deliver your mail during the week, it's looking like he'll spend Saturdays watching cartoons. Faced with an estimated $7 billion shortfall in 2010, the United States Postal Service (USPS) is contemplating radical cuts that would slow down service, eliminate Saturday mail delivery, dramatically alter the post office's workforce, and raise the cost of postage.

Although there are multiple reasons for the USPS's current budget shortfalls, its biggest problem lies in its bizarre relationship with the federal government. While the Postal Service is expected to finance itself, it is not allowed to set its own rates, choose its own hours, or determine its internal policies. To turn the problem around, the USPS will either need to be directly funded by the government (as is the case in many countries) or it needs the freedom to set its own prices, policies, and hours.

On Tuesday, Postmaster General John E. Potter made a bid for greater autonomy when he revealed the results of a four-month, $4.8 million study conducted by three big-name consulting firms: Accenture, the Boston Consulting Group, and McKinsey & Co. The study identified 50 moves that the USPS could take to improve its bottom line. The USPS then narrowed those suggestions down to five general areas: pricing, workforce, service, employee retirement benefits, and new services. Among some of the biggest changes to its current model, the post office will slow down its delivery speed and cancel Saturday services (post offices, however, will remain open six days a week.) But, as the USPS is legally required to deliver mail on Saturdays, these changes would require the assent of Congress.

Problem Number One: Congress Is in the Driver's Seat

Therein lies the USPS's ultimate problem: every policy decision must be approved by Congress, leaving the agency as agile as an elephant. Critics regularly attack the Post Office for its supposed inefficiency and inability to function as well as private companies like the United Parcel Service (UPS) and FedEx (FDX). One big problem is that these competitors are able to set their own policies, while the USPS's rates, hours and even its pension plan funding are determined by Congress. This last item isn't incidental: In 2007, while the Post Office was attempting to deal with plummeting revenues, Congress dropped an anvil on its head with a law requiring the USPS to pay between $5.4 billion and $5.6 billion per year into its retiree health benefits trust fund. By comparison, most of the country's other businesses are legally allowed to underfund their retiree benefit programs. Although this number was later cut, it still represents a major expenditure for the beleaguered agency. Not helping matters is the fact that people are barely using the post office anymore. E-mail has rendered traditional letter writing almost obsolete, while online bill pay, direct deposit and other services are also cutting into demand.

Source InformationTitle: Losing Money Isn’t the U.S. Postal Service’s Only ProblemAuthor: Bruce WatsonDate: March 2010Source: Daily Finance websitewebsite: http://www.dailyfinance.com/2010/03/02/losing-money-isnt-the-u-s-postal- services-only-problem /

According to Potter, mail volume fell from 213 billion pieces in 2006 to 177 billion pieces in 2009, a 17% decline in just three years. By 2020, he estimates, USPS deliveries will fall to 150 billion pieces. And much of the existing mail volume is actually unprofitable. Media mail, periodicals, nonprofit mail, and library mail are all money sinks; in fact, 90% of the agency's revenue comes from business mail, a large portion of which is junk mail. While dropping "advertising mail" would make almost everyone happy, the post office can't afford to lose the revenue. According to Potter, the mail that we tend to toss out immediately actually pours over $15 billion per year into the Post Office's coffers. While part of the USPS's shortfall could be made up by raising prices on more popular services, the agency would have to go hat in hand to Congress in order to get approval to do so.

Does the U.S. Postal Service Deserve a Bailout?

In addition to putting an end to Saturday delivery, the USPS is also hoping to change the face of its workforce. Last year, it helped fund a $6 billion cut in its bottom line by dropping 40,000 employees. Over the next ten years, it expects that roughly half of the USPS workforce -- 300,000 employees -- will either retire or voluntarily quit. Rather than replace them with comparatively expensive full-time workers, the Post Office plans to follow in the footsteps of the rest of corporate America by hiring part-time workers who are not eligible for benefits. While these workers will place a bigger burden on an already-stressed social net, they will also lower the Post Office's bottom line.

Tuesday's announcement, coming only six months after last year's post office closures, suggests a chronic problem: as it stands, the USPS is not a profitable program, and isn't like to become profitable any time soon. But the model of mail delivery as a business is inherently flawed: the postal service is not an optional purchase like a Big Mac or a new car. Rather, it is a fundamental governmental service, a basic requirement for a modern, industrialized nation. Along with public schools, roads, and the military, it is something that citizens justifiably feel entitled to.

Yet the Postal Service is not directly funded by the federal government: although the government puts caps on the postage that it can charge, the USPS is expected to pay for itself. While it is allowed to borrow up to $15 billion from the U.S. Treasury to help it through difficult times, it is currently running a tab of $10 billion and may borrow another $3 billion this year. But this ad hoc funding system, disturbingly similar to the old method used to fund Amtrak, is a stopgap, and doesn't allow the Postal Service to engage in long-term planning.

And then there is the Post Office's position in the community. Lest we forget, post offices provide the most prominent -- and, in many towns, the only -- physical connection between communities and the federal government. In addition to providing mail services, they are also where citizens go to get passports, check the wanted posters, and register for selective service. Of course, this also goes a long way toward explaining why many citizens distrust the government: the standard service at many post offices is slow, surly and unresponsive.

The question should not be how much of a postal service we can live with or how much we can cut from an already underfunded program. A more important question is how much it would cost to fund an efficient, cost-effective and responsive postal service with shorter lines and reasonable delivery times. Admittedly, the USPS could certainly afford to trim some fat, and some of its executive perks are excessive. But this year's predicted $7.8 billion shortfall is half the price of the 2008 Detroit bailout and

roughly 1% of the price of the Wall Street bailout. And, in terms of touching the lives of average Americans, it’s hard to find a more effective use of taxpayer money.

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Overview: The United States Postal Service (USPS) is an independent branch of the federal government responsible for providing Postal Service in the United States. The USPS handles the mailing of letters and packages, sorting and delivering mail, and selling postal products like stamps, mailing supplies and commemoratives. The Postal Service has long been one of the most criticized federal operations, accused of rampant inefficiency and bloated bureaucracy. Over the past several years, the critically ill state of the economy and the widespread use of electronic communication have contributed to putting the agency into financial crisis, as it suffers annual multi-billion-dollar losses. In the past five years, mail volume has declined by more than 43 billion pieces, with single-piece First-Class letters declining by 36%. First-Class Mail volume has dropped by 50% in the past 10 years. Calls for privatizing the Postal Service have been uttered time and again, but they have yet to gain any real traction with lawmakers or the White House. The USPS has made a series of proposals to a wary Congress for ways to avoid all-out bankruptcy.

History: Before mail was delivered daily, citizens depended on friends, merchants, and Native Americans to deliver messages around the country, and even to Europe. By 1639, the first official mail service in the colonies was developed by the General Court of Massachusetts. Richard Fairbanks’ tavern in Boston was chosen as the official repository for mail delivered from or going out to places overseas. Local authorities developed routes in their areas, and in 1673, Governor Francis Lovelace of New York set up a monthly post between New York and Boston. Although the service was short-lived, the rider’s trail became known as the Old Boston Post Road, which comprised the current U.S. Route 1. Governor William Penn established Pennsylvania’s first post office in 1683. And in the South, private messengers, who were usually slaves, brought messages from plantation to plantation. As this network expanded, so did the routes carrying messages.

After 1692, a central post organization was established in the colonies, when Thomas Neale received a 21-year grant from the British Crown. Although Neale never visited America, he appointed Governor Andrew Hamilton of New Jersey as his deputy postmaster general. Neale’s franchise costs were low and yet he died heavily in debt after passing his post to Andrew Hamilton and Robert West.

The British government bought the rights to the North American Postal Service in 1707 and appointed Hamilton’s son, John, as deputy postmaster general. He was succeeded by John Lloyd of Charleston, South Carolina, in 1721. Alexander Spotswood, former lieutenant governor of Virginia, became deputy postmaster of America and appointed Benjamin Franklin to be deputy postmaster general of Philadelphia in 1737.

Source Information:Title: United States Postal ServiceAuthor: David WallechinskySite: AllGov.comDate: 2012website: http://www.allgov.com/departments/independent-agencies/united-states-postal-service?agencyid=7284

Franklin made important and lasting improvements to the colonial posts, reorganizing service, touring and inspecting post offices to the north and south, and placing milestones on the postal routes for safety. He established shorter routes and sent postal riders out to carry mail at night on a speed service between Philadelphia and New York. The colonial posts turned their first profit in 1760 under Franklin’s leadership. Franklin was dismissed by the Crown in 1774 for actions deemed sympathetic to the cause of the colonies. When he left office, post roads operated from Maine to Florida and from New York to Canada. Mail was delivered on a regular schedule with posted times.

William Goddard, a printer and newspaper publisher, set up the Constitutional Post of inter-colonial mail. It was funded by the colonies using a subscription model, and net revenues were used to improve mail service. When the Continental Congress met in Philadelphia in 1775, Goddard’s post was flourishing, and 30 post offices were in operation. The Constitutional Post set up rules for hiring reputable post riders and how riders were to secure the mail with a lock and key.

Three weeks after the battles of Lexington and Concord, the Second Continental Congress met in May 1775 to plan for the colonies’ defense in the event of a British attack. Delivery of messages and other material was deemed necessary for freedom, so a committee, chaired by Benjamin Franklin, recommended founding a domestic postal system. After the committee reported back to the Continental Congress in July, the Congress created the position of Postmaster General and named Franklin to the post. Franklin’s son-in-law, Richard Bache, was named comptroller, and William Goddard was appointed surveyor.

During the Revolutionary War, the postal system carried communications between Congress and the armies. Riders were exempted from military duties so service would not be interrupted. Franklin served as Postmaster General until November 7, 1776, and, as such, is considered the first Postmaster General of the United States. The Postmaster General was part of the presidential cabinet and was the last person in the line of succession to the presidency.

In the 19th century, the postal system continued to grow. The Post Office Department, which had been founded to oversee the Postal Service, developed new services and established new post routes. As the United States grew dramatically between 1789 and 1861, when the Civil War broke out, its population also increased. This meant more mail and even more post roads. By 1819, the Postal Service served 22 states and developed faster service. By 1822, it took just 11 days to move mail between Washington D.C. and Nashville, Tennessee.

By 1828, there were 7,530 post offices and 29,956 postal employees, mail contractors and carriers. John McLean of Ohio was the first Postmaster General to refer to the Post Office, or General Post Office, as it was sometimes called, but the organization was not officially established as an executive department until June 8, 1872.

By 1831, postal employees accounted for 76% of the civilian federal workforce. States continued to petition Congress for new post routes regardless of their potential for profit. The federal government struggled with this issue and decided to subsidize postal routes that supported national development. Rates were changed as well. In the past, rates were determined by the number of pages in a letter and the distance it was traveling. But in 1845, the Postal Service began charging based on weight, and whether the letter was going more or less than 300 miles. This was done through legislation adopted on March 3, 1863. The act also created three classes of mail: first class, second class, and third class.

As technology improved, with fast-moving steamboats, mail began to move faster. In 1815, operators of steamboats had to deliver the letters and packets they carried to local postmasters within three hours of docking in daylight, or two hours after sunrise the following day. In the 1820s, more than 200 steamboats were serving river communities

in this way. The Postal Service also contracted three vessels to carry mail. An 1823 law declared waterways to be post roads.

Mail service reached all the way to California by 1848, with the hopes of delivering mail within 3-4 weeks from the time it was sent. Often, this was not the case. Mail traveled by ship from New York to Panama, and then moved across Panama by canoes before it was loaded into another ship that carried it to San Francisco. The Panama Railroad made this journey slightly easier by 1855, but it wasn’t until September of 1858, when John Butterfield’s Overland Mail Company established a 2,800-mile southern stage route between Tipton, Missouri, and San Francisco, that mail began to arrive more frequently.

The Railway Mail Service (RMS) was created in 1864 to subsidize the railway system. Railways were asked to build special cars to transport mail in exchange for a government subsidy. RMS workers became the fastest mail sorters in the business and made it possible for local carriers to deliver all of the mail at the same time.

Mail was still delivered to a central location, usually from post office to post office. People could pick up their mail or pay two extra cents to have it delivered by local courier. In 1862, Postmaster General Montgomery Blair suggested that the Postal Service extend free delivery of mail by salaried mail carriers. Congress agreed with this suggestion and signed it into law on March 3, 1863. Income from local postage was more than sufficient to pay all expenses for the new service. Street addresses were added to letters for the first time.

On June 30, 1864, free city delivery was established in 65 cities nationwide, and 685 carriers delivered mail there. By 1880, 104 cities were served by 2,628 letter carriers. And by 1900, 15,322 carriers provided services to 796 cities. In order to receive mail at home, a citizen had to be at home. Otherwise, mail remained in the carrier’s satchel to be redelivered later. In 1912, people were encouraged to provide mail slots or receptacles, and by March 1, 1923, they were required for delivery service.

In the 1890s, the New York Society for Suppression of Vice, spearheaded by Anthony Comstock, helped to make the mailing of obscene material illegal. This comprised indecent material, as well as anything involving abortion, contraception, or alcohol. Comstock appointed himself “Special Postmaster” and attempted to enforce these laws using a posse comitatus of RMS workers.

By the 1930s, letter carriers began delivering to customers at the edges of cities using boxes at the curb line. As Americans began moving increasingly to the suburbs in the 1950s, more and more curbside mailboxes began to spring up. Up until that time, mail carriers worked 52 weeks per year and 9-11 hours per day on average. Many worked Monday through Saturday and sometimes on Sunday as well. A congressional act in 1884 granted them 15 days of leave per year, and in 1888, Congress declared that a day’s work would be 8 hours, and hours above and beyond that were to be paid accordingly. The 40-hour work week began in 1935.

Mail carriers walked as many as 22 miles a day, carrying up to 50 pounds of mail at a time. There were sometimes two deliveries per day to residences, and up to four per day at businesses. This was discontinued on April 17, 1950. By the mid-1950s, the maximum weight to be carried by a postal worker was reduced to 35 pounds, which is where it remains today.

At the beginning of the 20th Century, Americans were still being served by the Post Office Department. They lived largely in rural areas and this presented challenges to the Postal Service. By the mid-1960s, the Post Office Department had financial problems due to neglect and fragmented control. Facilities, equipment, wages, and management efficiency had to be overhauled. In October 1966, the Chicago Post Office came to a halt as the volume

of mail surpassed workers’ ability to sort and deliver it. A 1967 House Appropriations Subcommittee labeled the Postal Service “a race with catastrophe.” Five to ten million pieces of mail were being sent each day, but systems could not keep up.

In 1971, the department was reorganized as a semi-independent agency of the federal government. Its name was changed to the United States Postal Service (USPS). New laws also removed the Postmaster General from the line of succession for the presidency.

In the 37 years since the Postal Reorganization Act was signed, technological advances have improved services and operations. Although the volume of mail has continued to grow each year, it declined in 1991 for the first time since the Depression. In 1992, the post service created a new organizational structure that replaced five regions and 73 field divisions with 10 areas and 85 districts in an effort to keep rates holding steady.

In 2006, Congress passed and President George W. Bush signed the Postal Accountability and Enhancement Act (pdf). It enacted numerous USPS reforms, including pre-funding retirees’ health-care costs, and modifying matters pertaining to budget submission, pension benefits, regulatory activity, rate-setting, Board of Governor terms, and agency transparency.

In March 2010, then-Postmaster General John Potter announced a 10-year strategy for the USPS as a means to avoid a cumulative deficit of $238 billion by 2020. The plan included elimination of Saturday deliveries, which was touted as a $3 billion per year savings. The plan also sought relief from pre-funding retiree health benefits, which would save $5.6 billion annually. It additionally sought retail partnerships and the right to hire part-time employees.

Mail volume reached record levels from 1992 to 2000. Although the terrorist attacks on September 11 diminished this volume slightly in 2001, total mail volume dropped by nearly five billion pieces in 2002. Two years later mail volume again increased. Currently the USPS sorts and delivers more than 177 billion pieces of mail annually, which is approximately 40% of the world’s total mail volume. In the past five years, mail volume has declined by more than 43 billion pieces, with single-piece First-Class letters declining by 36%. In the last year alone, First-Class Mail has declined by 6.6%, with USPS processing about 563 million pieces of mail a day. In FY 2011, overall mail volume had been forecast to fall by 3.5 billion pieces (2%), with a projected 6.5% decrease in First-Class Mail. First-Class Mail is projected to drop to 39 billion pieces annually by 2020. While commercial junk mail, now known as “Standard Mail,” has been experiencing a 1.7% increase in revenue this year, it generates only a third as much as First-Class Mail, and therefore can’t make up for the loss of First-Class business.

In the fourth quarter of 2011 alone, the USPS suffered a $3.3 billion net loss, and it is expected to lose $10 billion per year if no action is taken. The agency has asked Congress for permission to close unprofitable postal facilities, move from a six-day to five-day weekly delivery schedule, relax delivery times, and withdraw from federal retirement and health-care plans.

In his FY 2013 budget, President Obama expressed support for the termination of Saturday mail deliveries, raising the price of stamps above the rate of inflation, and relaxation of costly payments to pre-fund future postal worker retirements. As part of that, he proposed the refunding of $10.9 billion to USPS over two years from a credit it has with the Federal Employee Retirement System. USPS claims that the enactment of those proposals would save the agency $25 billion over the next 11 years

What it Does:

The United States Postal Service (USPS) is an independent federal agency responsible for providing Postal Service for the United States. This is done through collecting postage for the mailing of letters and packages, sorting and delivering mail and selling post-related products like commemorative and collectible stamps, as well as postal supplies.

The Board of Governors of the USPS sets policy, procedure and postal rates. It has a similar role as a corporate board of directors. Of the 11 board members, nine are appointed by the President and confirmed by the Senate. These nine appointed members then select the U.S. Postmaster General, who serves as the board’s tenth member. He or she also oversees the day-to-day activities of the Postal Service and acts as chief executive officer. The 10-member board then nominates a deputy postmaster general who acts as chief operating officer and takes the remaining seat on the board.

Although the USPS is often mistaken for a government-owned corporation like Amtrak, it is legally defined as an “independent establishment of the executive branch.” As a quasi-government agency, it has many special privileges, including sovereign immunity, eminent domain powers, powers to negotiate postal treaties with foreign nations, and an exclusive legal right to deliver First-Class and Standard Mail. In 2004, the U.S. Supreme Court ruled that the USPS was not a government-owned corporation and could not be sued under the Sherman Antitrust Act.

The Postal Service’s Independent Office of Inspector General (OIG) prevents waste, fraud, theft, and misconduct by the Postal Service. In 2004, the responsibilities of this office increased, when allegations of postal employee misconduct were added. Starting in February 2007, issues of embezzlement, record falsification, workers’ compensation fraud, contract fraud, and on-duty narcotics violations were referred to the USPS OIG.

The OIG’s staff of 1,071 members includes special agents (federal law enforcement officers authorized to carry firearms, make arrests, and investigate federal criminal violations), auditors (professionals trained in government audit and accounting standards), and others. Since it was established, the Office of Inspector General has issued 3,077 audit reports and management advisories accounting for more than $3.7 billion in questioned costs, unrecoverable costs, funds put to better use, and revenue impact. Examples of fraud uncovered by USPS OIG investigations include a trucking contractor defrauding the Postal Service of $1.5 million in fuel rebates; a highway route contractor defrauding the Postal Service of $120,468 for services not rendered; and a construction contractor charging the Postal Service $175,630 for work never done.

The Department of Defense and the USPS jointly operate a postal system to deliver mail for the military. This is known as the Army Post Office (for Army and Air Force postal facilities) and Fleet Post Office (for Navy, Marine Corps and Coast Guard postal facilities).

Suggested Reforms: Saving the USPS from Financial Collapse

Since the U.S. Postal Service (USPS) reached a critical state in 2011 with its red ink, Washington has had no shortage of reform proposals to consider for saving the agency from bankruptcy. One of the more dramatic plans, offered by Sen. Joseph Lieberman (I-Connecticut), called for closing 3,700 post offices, ending Saturday mail delivery, and reducing the agency’s workforce by 220,000 employees over four years.

A point of contention not tackled by Lieberman was what, if anything, Congress should do about the mandate it placed on the USPS in 2006, when a new law demanded the agency prefund its retiree health benefits for the next 75 years. The requirement has forced the Postal Service to put aside $5.5 billion annually for 10 years.

In his reform proposal, Rep. Darrell Issa (R-California), chairman of the House Government Oversight Committee, wanted to allow the USPS to default on its retiree health fund obligation. Issa also called for creating a commission to oversee a dramatic restructuring of the agency. Liberals vehemently opposed Issa’s bill, claiming it contained language that could have stripped postal workers of their collective bargaining rights. Issa offered another USPS reform plan that dealt specifically with the special postage rate given to nonprofits. The bill proposed a gradual lowering of the discount on nonprofits’ postage rates as a way to generate more revenue for the Postal Service.

Sen. Susan Collins (R-Maine) objected to the idea of closing thousands of post offices, saying such a move would be devastating to rural communities. She proposed reforming the retiree prefunding mandate, while maintaining Saturday mail delivery and not closing small postal offices.

Yet another reform plan, by Sen. Tom Carper (D-Delaware), would have allowed the USPS to cease Saturday service (which Postal Service executives want) and use projected overpayments into the federal retirement system to satisfy its prefunding requirement on health benefits.

Postal Service OverhaulIn 2004, a long-awaited proposal to reorganize the Postal Service met with opposition when businesses objected to a provision backed by the largest postal workers union. The law, backed by Rep. John M. McHugh (R-New York), would change the way the Postal Service sets mail rates and attempt to separate the agency’s First-Class Mail monopoly from its competitive services, such as package delivery. A presidential commission reported that without an overhaul, the Postal Service faces an ever-worsening financial crisis because of declining letter mail revenue.

The bill ran into trouble over a section dealing with discounts the Postal Service offers mailers who presort and put bar codes on mail before sending it. This saves the Postal Service money, but labor unions wanted to limit the discounts to just the amount the USPS would save. As written, it would mean higher rates for all retailers.

Writers of the reform bill had trouble drafting a version that pleased all sides. The Postal Service, nonprofit mailers, package delivery companies and labor unions have struggled over the issue for the better part of a decade, and McHugh has been at the forefront most of that time through his chairmanship of postal-related panels.

The controversy arose before the bill actually became available. The House Government Reform Committee released a “discussion draft” just two days before the scheduled vote in committee, a period one official called too short to allow a full debate. The official said the section on postal discounts, known as workshare discounts, could raise postal rates by as much as $50 million a year.

A postal reform bill had also gained momentum in the Senate. That bill, drafted by Sen. Susan Collins (R-Maine) and others, replaced the Postal Rate Commission with a Postal Regulatory Commission that would have broader oversight authority. The proposal also generally limited postal rate increases for first-class mail to the consumer price index and created a separate fund for revenue generated by the Postal Service’s competitive products.

As lawmakers began taking up postal overhaul bills, several interest groups—including commercial mailers, postal competitors, consumer groups and labor organizations—watched closely and prepared to redouble their lobbying efforts for postal reorganization nearly a decade in the making.

A decline in mail volume and a steady rise in delivery points and expenses will cause postal price increases and major job losses nationwide if the delivery service is not reformed, according to a group pushing for change. Maine would lose an estimated 3,500 to 7,000 jobs, depending on whether the drop in volume proves to be 10% or 20%, the Envelope Manufacturers Association argued in its study. According to the association report, some of the

threatened organizations include the Postal Service, which is the seventh largest employer in Maine, with more than 4,400 workers, as well as paper manufacturers, printers, and catalog companies.

Finally, on December 20, 2006, a decade of legislative wrangling came to an end when President George W. Bush signed the Postal Accountability and Enhancement Act of 2006 (pdf). The measure provided the Postal Service with the financial and structural flexibility it needed to compete in the Information Age. With First-Class Mail being steadily siphoned away by email and other electronic communication, the USPS needed the freedom to react to market conditions, develop new products and services, and adapt its business model in order to survive.

Although the postal workers union objected strenuously to one provision—requiring injured postal employees to wait three days before beginning Continuation of Pay benefits—the union played a crucial role in developing many of its most important provisions. The law was the first substantive overhaul of the Postal Service since the Postal Reorganization Act of 1970.

Debate: Should the Postal Service Be Privatized?

Practically since the beginning of the Postal Service, there has been a contentious debate about USPS’s monopoly on the sorting and delivery of mail across the country. While government postal systems around the world have faced increasing competition from delivery services such as Federal Express, DHL, and United Parcel Service, the USPS has remained the carrier of choice for the federal government. As a federal department, the USPS can set postal rates and raise them as it sees fit with little or no competition to meet the needs of the average consumer. Current debate has centered on whether the country would be better served by privatizing the USPS.

History:

During the years 1839-1851, the USPS faced its first serious challenge to its monopoly. A number of congressmen feared the Postal Service was on the verge of an involuntary privatization. Because the monopoly profits garnered by the post office were important to politically powerful interest groups, the federal government did not allow the USPS to be privatized. In order to reduce competition, however, rates were dropped drastically and various reforms were adopted.

For many years, the Postal Service’s monopoly power allowed it to earn huge profits, or “rents,” on important routes. But unlike in other countries, the USPS returned almost no revenue to the general fund. Instead, it reported losses; large profits were distributed internally. The Postal Service also distributed these revenues to groups with political power in order to buy influence and favors.

The Postal Service’s large hidden profits caused postal rates to rise relative to the cost of transportation. Private competitors, even as far back as the mid-19th century, delivered mail efficiently, and at lower rates. Congress was forced to lower rates again and again to stay competitive.

Further hurting the Postal Service’s bottom-lines were two additional factors:

USPS was inadvertently subsidizing the transportation industry since it was paying up to 16 times the rate of regular freight to move mail around the country by steamship and railroad. This was not investigated or addressed.

Postal Service workers were paid far more than market wages. In the 19th century, postmasters were offered a portion of the gross receipt at their post offices and the ability to “frank” mail (send items through the mail with only a signature instead of postage). Franking was sometimes more valuable than the Postmaster General’s salary since this privilege could be “sold” to powerful individuals for political or personal gain. It is estimated that deputy postmasters and other government officials franked between 1 and 1.5 million letters and documents per year.

The most controversial challenge to the monopoly of the Postal Service came from Lysander Spooner, who formed the American Letter Company to deliver mail between New York, Boston, Philadelphia, and Baltimore to challenge the USPS’ monopoly. The Articles of Confederation of 1778 had vested the Congress with the “sole and exclusive right [of] … establishing and regulating post offices.” The Constitution had simply granted “the power to establish post offices and post roads.” This language led many, including Justice Joseph Story, to doubt whether the power the Constitution gave to set up posts and post roads was intended to be exclusive. Spooner used his own money to buy newspaper advertisements urging cooperation from the federal government to bring the matter before the Supreme Court. The Postmaster General was unwilling to cooperate, though, and Spooner was driven out of business when the government seized his mail.

Today: According to the Government Accountability Office, “The monopoly was created by Congress as a revenue protection measure for the Postal Service’s predecessor to enable it to fulfill its mission. It is to prevent private competitors from engaging in an activity known as ‘cream-skimming,’ i.e., offering service on low-cost routes at prices below those of the Postal Service, while leaving the USPS with high-cost routes.” The law that prohibits anyone except the USPS from placing mail in a private mailbox was also passed for the purpose of preventing loss of revenue to the post office.

Besides the prevention of revenue loss, the 1934 legislation was passed for another reason. “Congress sought to decrease the quantity of extraneous matter being placed in mail boxes.” Until 1979, competition in all letter mail was prohibited. However, faced with imminent legislation to exempt “urgent” letter mail from the monopoly, the Post Office decided on its own to exempt “extremely urgent” letters. Competition in “extremely urgent letters” was allowed under certain conditions: The private carrier must charge at least $3 or twice the U.S. postage, whichever is greater (other stipulations, such as maximum delivery time, applied as well); or, alternatively, it may be delivered for free. This is where carriers such as FedEx compete by offering overnight delivery, as well as where bicycle messengers compete for intra-city mail.

However, the private carrier of the urgent letters must not use the standardized mailboxes marked “US Mail.” Hence, private carriers of urgent letters must deliver packages directly to the recipient, leave them in the open near the recipient’s front door or place them in a special box dedicated solely to that carrier (a technique commonly used by small courier and messenger services). According to the American Enterprise Institute, the United States is the only country that has such a mailbox monopoly.

Since the mail monopoly only applies to non-urgent letter mail, the USPS is losing a significant amount of business to their competitors in other services, who offer lower rates. For example, FedEx and others have captured 90% of the overnight mail business.

Pro: The post office is broken and can’t be fixed, say those who believe privatization is the best move for the USPS. Because of its position as an untouchable monopoly that is subsidized by the federal government no matter how poor its performance, the USPS has no real reason to want to improve. Give private industry a chance to sort it out, or figure out how to offer more services at a more competitive rate, say privatization proponents.

Also, because the federal government has traditionally been slow to counter challenges from private mail carriers, the post office has lagged one step behind the business world, which is nimbler and more capable of making the

necessary changes to remain competitive. In contrast, the reactionary stance of the USPS only makes it have to continually lower its prices in order to stay competitive. This results in an endless cycle of less money coming in, which forces cuts in services and personnel and results in longer lines and greater irritation for consumers, who then look for other options.

Many on the political right who advocate laissez-faire capitalism are critical of USPS’s monopoly. Economists have argued that having laws that make it illegal for anyone else to carry mail decreases competition and instead raises prices. Because the USPS is a huge organization, many say their scale alone should make it possible to drop the price of stamps, not raise them on a consistent basis. Lastly, some say that the USPS has an unfair advantage and should be subject to the same rules as private carriers, such as paying taxes, following state and local regulations, and being subject to antitrust laws.

Con:Critics of privatizing the USPS often cite the worry of increased prices and less centralizing or standardization for mail delivery. Another big worry is the fate of rural citizens, who depend on the mail for their main source of information. Those against privatizing the Postal Service argue that living in thinly populated areas means that transportation costs must be expanded to meet delivery demands. Often, urban areas like the Northeast end up subsidizing more rural areas because they bring in more revenue when factored against transportation costs. If the Postal Service were run by private corporations, they could decide not to provide mail to those areas or to provide fewer overall services. That would leave the burden on districts that may not be able to afford their own post office, and thus limit access to information.

The Postal Service argues that their monopoly is necessary to fulfill its mission “to provide for an economically sound postal system that could afford to deliver letters between any two locations, however remote.” If private carriers were allowed to compete, they say, the post office would not be able to deliver mail to every American at the same price. The department also stresses that electronic mail will provide enough of a hit to their bottom line to make talk of privatization unnecessary and irrelevant going forward.

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Privatize This: The USPS Needs Urgent and Wide-Ranging Reform

It's time to privatize the U.S. Postal Service. We no longer need a federal agency to deliver our junk mail. The facts are plain. Even with a locked-in monopoly, the USPS can't make ends meet. Its accounting is so murky and convoluted it makes our Enrons and WorldComs look like models of financial transparency. We mail-users — and ultimately taxpayers — end up paying through the nose for the increasingly obsolete privilege of "universal service," i.e., six-day-a-week delivery to every household in the nation.

If USPS were a private company, now would be the time to get serious about cutting costs and downsizing. Instead, the organization plans to do what it always does when the going gets tough — raise stamp prices. Last month, USPS took the first step when its board of governors directed management to file for an increase, which will probably hit stamp buyers in early 2006.

If USPS were a competitive company — as opposed to bloated federal bureaucracy — stamp prices would be falling, not rising. Despite new technology — like modern reader/sorters that process over 30,000 pieces of mail per hour — stamp prices have risen with inflation since 1970. Imagine if the price of a phone call or sending an e-mail rose with inflation for 30 years.

USPS is simply unable to capitalize on its multibillion-dollar technology investments, or on its massive economies of scale. A December study by leading experts of the Postal Rate Commission notes: "The doubling of overall volume coupled with scale economies should have resulted in the average price of the stamp dropping in real terms."Well, okay. So you might have to pay 41 cents to mail a letter. What's the big deal? It may be illegal to take your envelopes elsewhere, but you can just move your business — including receiving and paying your bills — online, right? Let the postal service sock it to big mailers, who together make up a $900-billion industry, and to the nice people who still mail out Christmas and Valentine's Day cards. The problem is, USPS is already so deep underwater that even hiking stamp prices won't solve its financial crisis. Raising the price of letter delivery just drives customers away at an even faster rate.

SOURCE INFORMATION:

Title: Privatize This: The USPS Needs Urgent and Wide-Ranging ReformAuthor: Sam RyanDate: March 7, 2005Website: http://old.nationalreview.com/comment/ryan200503070740.asp

Of course, politicians, economists, and postal officials have argued for years about the best remedy for the bloated, inefficient, and union-dominated postal service. Some change may finally come about during the current session of Congress, with postal-reform bills pending in the House and Senate. The draft proposals, however, don't call for busting the monopoly or privatizing the Service. Yet in its own much-touted transformation plan, published in 2002, the USPS envisions itself as a future "Commercial Government Enterprise." The postal service's website suffix was switched from dot-gov to dot-com, and the postmaster general's title changed to "Postmaster General and CEO." But public posturing aside, what exactly does "Commercial Government Enterprise" mean?"Postal Service managers would operate under more businesslike conditions. The Postal Service would offer both traditional and nontraditional products and implement market-based pricing, discounts and incentives, and business-based financing," the transformation plan says.

Unfortunately, the ballyhooed transformation plan says nothing about ending the USPS monopoly. Although postal officials want the postal service to walk and talk like a private firm, they won't consider making it one. After all, that would mean they'd have to divulge their mysterious accounting system that lumps 40 percent of costs into a murky, "general overhead" slush fund.

There is one side of private enterprise that's enticing the USPS though. It has no qualms about jumping into markets that have been transformed by private companies, like overnight package delivery. With all its special privileges and some expensive fancy-dance advertising, it can grab new business from the private sector. Remember, USPS is exempt from most taxes; it's free from SEC financial-reporting requirements; it can borrow from the U.S. Treasury at favorable rates, and, most importantly, it milks the cash cow of a government-enforced monopoly on letter delivery.

Having a captive monopoly market means the USPS can cross-subsidize — that is, use profits from letter delivery to fund expansion into other lines of business. Normally this would be considered predatory monopolistic behavior, and illegal. But the postal service is exempt from antitrust law. Consider the transformation plan's bizarre phrasing: "At stake is the future of what has been, since this nation's founding, the right of every American to send and receive mail." It almost seems like the postal service thinks of itself as a constitutional right. Well, it's not. Mail may have once been the glue that held our far-flung nation together, but newer technologies make such USPS posturing ludicrous today. Most Americans these days would be far more upset by interruptions in e-mail than in snail mail. Yet you never hear the argument that the government should be the only provider of Internet access.Indeed, the Internet has contributed to the postal service's long-term downward financial spiral, but USPS does not seem resolved to downsize its 800,000-strong workforce. "The Postal workforce is bigger than any two branches of the military combined. You could replace the Marines and the Army with postal workers, and you'd still have some mailmen left over," says Tom Readmond, federal-affairs manager of Americans for Tax Reform.

To be completely fair, Postmaster General John Potter has made a significant belt-tightening effort. Under his leadership, USPS has eliminated more than 85,000 employees, which represents a reduction of more than 10 percent of the workforce since 1999. Most of this reduction was brought about not by layoffs, but through attrition; i.e., leaving posts vacant when workers retired.

But USPS is still massively oversized, and waste abounds. Forget about the Pentagon's $600 toilet-seat covers. The average postal worker earns over 25 percent more than his private-sector, factory-worker counterpart. No wonder labor still accounts for two thirds of USPS costs, compared to about 50 percent at private delivery companies.William Henderson, the U.S. postmaster general from 1998 to 2001, wrote upon leaving that "what the Postal Service needs now is nothing short of privatization." He even recommended an employee stock-ownership plan that "would motivate workers by allocating stock to them over time."

Across the Atlantic, such reforms are already underway. The European Union aims to privatize all its national postal services by 2009. Yet here, the U.S. postal service cries foul when it is faced with real market-based reforms.

Furthermore, declining mail volume, brought on by the e-mail revolution, has resulted in more than $4.5 billion in lost USPS revenue since 2000. And a long-term volume decline is just a small piece of the problem. Few Americans realize that the USPS already has accumulated over $70 billion in unfunded liabilities — mostly money promised to employees in retirement and health benefits. The USPS doesn't have that money. Nobody knows how on earth it's going to meet these liabilities.

But here's a not-so-wild guess. Sooner or later, USPS will ask Congress for a massive bailout. If there were any point to saving the postal service in its current form, such a gift might even be worth a few taxpayer dollars. But there isn't one. It would be throwing more good money after bad. The USPS is a drag on the government, on the economy, on the marketplace it unfairly distorts, and on consumers and taxpayers. It should be privatized without delay.— Sam Ryan is a senior fellow at the Lexington Institute, a think tank based in Arlington, Virginia.

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Citizens Against Privatizing the US Postal Service

Send To: The President of The United States - US Postal Service - US Postal Commission - US Congress and SenateSponsored By: Concerned Citizens and Postal Employees

December 12, 2002

To:President of The United States of AmericaUnited States Postal CommissionUnited States Postal ServiceUS CongressUS Senate

From:Concerned United States Postal EmployeesConcerned Citizens of The United States of AmericaRick Owens Founder Postal Employee NetworkCitizens and Postal Employees Against Privatizationof The United States Postal Service

Source Information:Title: Citizens Against Privatizing the US Postal ServiceType of information: copy of a letter sent to President of USAuthor: Rick OwensAgency: Concerned Citizens and Postal EmployeesWebsite: http://www.petitiononline.com/1usps1/petition.html

LET IT BE KNOWN THAT:

We, the employees of the United States Postal Service and the concerned citizens of this great nation, hereby adamantly voice our support AGAINST the privatization of the United States Postal Service or any part thereof.

We feel that all citizens of this great nation are entitled to a national postal service that is, at the least, accountable to the people by and through congressional law that has been written, and adopted, by elected government officials and the general population through popular vote. This type postal service, as of the date this petition was formed, is currently in effect.

We feel that protection of the United States mail should be guaranteed under Federal law and should not be degraded through the privatization of this nations mail processing and delivery services currently afforded by the United States Postal Service for this nations citizens.

It is our belief that no private company or companies, individual or individuals, should be able to purchase, bid upon, or accept appointment of any part or portion of the United States Postal Service or its obligations to process and delivery this nations mail without the prior approval of the citizens of the United States of America. Further, no company or companies, appointed commission, individual or individuals, elected or appointed official(s), government or quasi-government entity should have the lawful right to influence or cause the privatization of this nations United States Postal Service. Only the citizens of this nation should be afforded the right, as voters, to make such a decision that would clearly affect each and every person and business in this nation and may hold consequences around the world.

We contend that neither the current Postmaster General/CEO of the United States Postal Service, his directors or assignees, commission or commissions representing the United States Postal Service, nor any other government, quasi-government, or unionized entity or organization has any such authority as to privatize or cause the privatization of the United States Postal Service as it exists today.

We fully agree to the possibility that laws or regulations may need to be changed or enacted that will allow the United States Postal Service to adjust product and service pricing in a manner that will allow our nations postal service to operate in a more efficient manner and under a more cost effective environment, but we do not agree that any said changes of law or operation should include, in any form or fashion, the privatization of The United States Postal Service.

In conclusion we, the petitioners, seek your support in saving our beloved United States Postal Service as a government provided service to the citizens of this great nation for now and future generations to come.

Respectfully,

Concerned Employees of The United States Postal ServiceConcerned Citizens of The United States of AmericaRick Owens Founder Postal Employee Network

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Burrus Testifies Before Senate: USPS on Path to Privatization

July 26, 2007

The USPS “has begun to travel resolutely down the road of privatization,” APWU President William Burrus told a Senate subcommittee on July 25, “without authorization from Congress” — or the American people. The subcontracting of postal work, he warned, “is just one aspect of a dangerous trend: the wholesale conversion of a vital public service to one performed privately for profit.”

Source Information:Title: Burrus Testifies Before Senate: USPS on Path to PrivatizationAgency/ Source: American Postal Workers Unit, AFL-CIO, Article #70Author: Cliff Guffey, Preident of American Postal Workers UnitDate: July 26, 2007 Website: http://www.apwu.org/news/webart/2007/webart-0770-senatetest-070726.htm

Burrus called on the Senate to act. “On the critical issue of privatization of the United States Postal Service,” he said, “it is imperative that Congress take a stand and insist on its right — its responsibility — to set public policy.”

“For more than a decade,” Burrus told the subcommittee, “virtually all of the legislative focus on the United States Postal Service was based on the belief that absent radical reform, this great institution faced imminent demise.” Because the APWU viewed the postal reform drive as “a veiled attempt to undermine collective bargaining,” the union did not support the legislation, Burrus said. “However, the Postal Accountability and Enhancement Act has become law, and we promise to lend our best effort to making it work.”

But some proponents of the law are now active behind the scenes, “on the unfinished business of the reform mania — the subcontracting of postal services,” Burrus told the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security. In testimony [PDF] before the panel, he shared the words of a mailing-industry spokesman who was quoted in the Washington Post on July 7: “In the not too distant future, the Postal Service could evolve into something which could be called the master contractor, where it maintains its government identity, but all the services would be performed by private contractors.”

The Postal Service has adopted a business model that is designed to privatize mail processing, transportation, maintenance, and delivery, the union president told the subcommittee. This strategy “is especially troubling in view of the Postal Service’s statutory obligations to military veterans, and its responsibility to provide career opportunities for all postal employees,” he said.

Despite these concerns, Burrus urged lawmakers to refrain from intervening in specific subcontracting disputes, encouraging them instead to enact legislation compelling the Postal Service to bargain over the issue. Legislators should avoid substituting their judgment for that of the parties who are directly involved and who are best suited to make the decisions and compromises that are required, he said.Burrus described the Postal Service as “a private investor’s dream: a tax-exempt, public monopoly, with revenues of $80 billion per year.” Eager businessmen anticipate the opportunity to divide the pieces of the U.S. Postal Service among themselves, he said, for substantial private financial gain.

“Perhaps the most insidious example of the march to privatization,” the APWU president testified, “is the operation of the Mailers Technical Advisory Committee, a panel composed of high-ranking postal officials and mailing industry moguls. At closed-door meetings, top-level postal officials entertain policy recommendations by the nation’s biggest mailers.” Despite “government in the sunshine” laws, Burrus noted, “the public is excluded from its deliberations, as are individual consumers, small businesses, and, of course, labor unions.” “At these secret meetings,” Burrus said, “schemes are being hatched to convert work performed by the USPS to private, for-profit entities.”

Along with the Consumer Alliance for Postal Services, the APWU has filed a lawsuit challenging the operations of MTAC, which for years has worked in relative obscurity. “Under the Federal Advisory Committee Act, it should be fairly easy to find out which postal policies and programs originated with

“On the critical issue of privatization of the United States Postal Service,” APWU President William Burrus told lawmakers, “it is imperative that Congress take a stand and insist on its right — its responsibility — to set public policy.”

the industry representatives in MTAC,” Burrus asserted. “The Advisory Committee Act requires that committee meetings be open to the public and that minutes of meetings be available.

“However,” he noted, “when the APWU sought to send a representative to attend MTAC meetings, our participation was barred.” During the same period, MTAC stopped posting its minutes on the Internet and refused to provide copies for public use, Burrus pointed out, although the committee recently began posting minutes of its meetings again.

“The secrecy of this powerful advisory committee has now taken on an even more ominous tone,” especially given that the 2006 postal reform law mandates that the Postal Service publish new service standards in consultation with the new Postal Regulatory Commission. Burrus called it “a matter of grave concern” that rather than waiting for formal proposals from the Postal Service, the PRC has sent invited representatives to attend secret MTAC meetings where Postal Service policy is being developed in concert with large mailers.

Congress must assert its authority and set public policy, Burrus said. “What is at stake is whether an independent federal agency that performs a vital public service should be handed over to private, for-profit enterprises.”

Burrus was joined on the witness panel by the presidents of the other three postal employee unions, each of whom voiced similar concerns about USPS contracting policies. A separate panel comprised of postmasters’ and supervisors’ association representatives also gave their views on contracting issues.

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Postmaster General Outlines Postal Service’s New Reality

September 21, 2011 Release No. 11-107

Source Information:Title: Postmaster General Outlines Postal Service’s New RealityDate: September 21, 2011Type of Information: Press Release covering Speech given at Business Mailer Event by Postmaster General and Chief Executive Officer’ Patrick DonahoeAuthor: Patrick DonahoeWebsite: http://about.usps.com/news/national-releases/2011/pr11_107.htm

TAMPA — In his annual state of the Postal Service address to the mailing industry and on the occasion of the 50th anniversary of the Postal Customer Council (PCC), Postmaster General and Chief Executive Officer Patrick Donahoe addressed a viewing audience of 8,000 today, describing the Postal Service’s new reality.

“We have reduced our annual costs by more than $12 billion and our workforce has been reduced by 110,000 career employees over the past four years, but we must do significantly more to return to profitability,” said Donahoe. “We must reduce our annual costs by $20 billion by 2015 to be profitable, and we do not currently have the flexibility in our business model to achieve these cost reductions.”

Donahoe praised postal employees for their hard work to bring about incredible cost savings while at the same time achieving record levels of service. He stated the Postal Service’s financial losses are due entirely to an overly restrictive business model and should not be interpreted as an indictment of the value of mail.

The Postal Service has advanced a comprehensive package of proposals that will allow it to operate more like a business, and without several large financial mandates, including:

Giving the Postal Service the authority to transition to a national five-day per week delivery schedule; and Resolving the retiree health benefit prepayment requirement.

“Short-term solutions will not help the Postal Service or this industry,” said Donahoe. “We need long-term, comprehensive legislation and our expectation is that Congress will pass comprehensive legislation by the end of this calendar year,” he added.

The Postal Service continues to make progress with reforms it can pursue without the help of Congress, including plans to:

Study 252 mail processing facilities for potential consolidation. Review 3,600 low-activity Post Offices for potential closure, consolidation or contracting.

Enhance and expand alternate access sites, including Village Post Offices and usps.com.

Modify delivery routes and service standards.

Make it easier to do business with the Postal Service with new, innovative products.

The PCC was formed 50 years ago to help build cooperation and communication between the Postal Service and business mailers. Donahoe pledged to work together with its PCC partners to make the mailing industry stronger, more compelling and more profitable.

A much-anticipated highlight of the annual event, the awards presentation recognized outstanding achievements of PCCs around the country. The following award winners were announced:

PCC Industry Member of the Year: Dorothy Cottrill, Sacramento PCC. PCC Postal Service Member of the Year: Sonya Dulan, Greater Oklahoma PCC.

PCC of the Year: Greater Atlanta PCC (large market), Vermont PCC (small market).

PCC Mentor of the Year: Mid-Michigan PCC.

Business Partner of the Year: Admail West.

District Manager of the Year: Rosemarie Fernandez, District Manager, San Francisco.

Communication Program Excellence: Greater New York PCC (gold), Greater Portland, OR PCC (silver) and Greater Oklahoma and San Diego PCCs (bronze).

Education Program Excellence: Tampa PCC (gold), Greater Portland, OR PCC (silver) and Miami-Dade PCC (bronze).

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.

We’re everywhere so you can be anywhere: www.uspseverywhere.com

# # #

A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 150 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. We’re everywhere so you can be anywhere: www.uspseverywhere.com. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $67 billion and delivers nearly 40 percent of the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 29th in the 2010 Fortune 500. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency six consecutive years and the sixth Most Trusted Business in the nation by the Ponemon Institute

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Source Information:Title: “How to Fix the Post Office”Author: Josh SanburnAgency: TIMEBusiness onlineDate: June 3, 2013Website: http://business.time.com/2013/06/03/how-to-fix-the-post-office-keep-the-last-mile-outsource-the-rest/

How to Fix the Post Office: Keep the ‘Last Mile,’ Outsource the Rest

By Josh Sanburn @joshsanburn June 03, 2013

A proposal to create a “hybrid” United States Postal Service would keep postal workers on their routes while allowing private companies to compete for mail collection, transportation, and processing. Now all it needs is a divided Congress and a reluctant postmaster general to sign off on it. A new study released today by a non-partisan Washington think tank recommends a radical departure for the struggling United States Postal Service: a public-private partnership that would open up much of the service’s back-end logistics to outside competition.

The idea to partly privatize the Postal Service has been floating around for at least a decade, and it’s been the subject of other recent studies too, including a white paper written in part by former postal employees and released by the National Academy of Public Administration; and an analysis of that paper funded by Pitney Bowes, a shipping and packaging company that would almost certainly benefit from the post office’s privatization.

But the study released today by The Information Technology & Innovation Foundation adds a bit more to the discussion.

This public-private hybrid proposal centers around private companies competing to accept, transport, and process much of America’s first-class mail. The USPS’s mail carriers would keep their “letterbox monopoly” on existing delivery routes, and the Postal Service would determine a national average for delivery costs that it would charge those private carriers. The author of the paper, ITIF President Robert Atkinson, likens it to the break-up of AT&T in the 1980s, which allowed competition among long-distance carriers for the first time. “If you want to go to a post office in the future, you might go to CVS or a Safeway or your local bank branch,” says Atkinson. “And then they might contract with FedEx to move that mail, which would all end up at a local USPS processing facility.” From there, mail would essentially be delivered like it has been since the development of the postal service two centuries ago — but, in Atkinson’s view, at much lower costs.

That would mean a dramatically different, and smaller, USPS. Atkinson estimates that 40% of the more than 500,000 workforce would lose their jobs and possibly half of the more than 30,000 post offices would close. But he argues that some of those jobs would be made up by private carriers performing work previously done by USPS.

In theory, opening up the USPS’s services to competition would allow it to operate much more efficiently, and save costs. In its second quarter, which ended March 31, USPS lost $1.9 billion, an improvement over the same period in 2012, when it lost $3.2 billion, largely due to a reduction in operating hours and a consolidation of mail-processing facilities. Still, the Postal Service is losing $25 million a day. “If it was a private company, it would’ve filed Chapter 11 by now,” says Atkinson.Atkinson’s study cites numbers from the Government Accountability Office showing that contract postal units, which operate out of a primary business like a supermarket but offer many of the same products and services as an official post office, are much more cost-efficient. According to the GAO, the USPS incurred $0.17 in costs for each dollar of revenue at CPUs compared to $0.51 at post offices.

Most other recommendations for fixing the USPS’s financial problems are much less radical; many include finding new sources of revenue like shipping beer and wine, closing facilities, or continuing to pare down its workforce. On the other end of the spectrum is complete privatization, which would fully get rid of the Postal Service we know today. A hybrid public-private partnership is somewhere in the middle and is probably the most interesting proposal being discussed.

But the hybrid recommendations don’t address a fundamental issue with Post Office finances: the multi-billion-dollar Congressionally mandated payments to pre-retiree health benefits that the Postal Service is required to make each year. Proponents of partially privatizing the USPS argue that while eliminating that requirement would certainly help in the short-term, the trend lines show continued future dips in mail volume and increased use of digital communication among Americans that will eventually have to be addressed by more structural changes.

The biggest problem, however, may getting any serious reforms approved by Congress, which shows no real signs that it wants to fundamentally alter the way the Post Office operates. Postmaster General Patrick Donahoe, meanwhile, seems more inclined to continue paring back services and finding new revenue streams. In the end, a hybrid proposal may just be another interesting idea that won’t get traction. But, eventually, something will have to be done to right the Post Office’s ship.

“The reality is, this is a bit of a build it and they will come proposal,” says Atkinson. “And it may be that the USPS is as efficient as you can get. But I don’t think that’s the case. If it is, then we haven’t lost anything. USPS would get all the business. But I think the urgency will increase over time to do something. Eventually people are going to say, we have to do something really serious here. And the reality will sink in that you have to take more serious structural positions.”

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Title: Why We Must Rescue the U.S. Postal Service From the Brink of DeathAuthor; David MorrisDate: February 6, 2013Agency: AlterNetWebsite: http://www.alternet.org/economy/why-we-must-rescue-us-postal-service-brink-death

AlterNet / By David Morris Why We Must Rescue the U.S. Postal Service From the Brink of Death February 6, 2013

The post office is closed, the flag comes down. When the human side of government closes its doors, we’re all in trouble” -- Jennings Randolph, senator from West Virginia 1958-'85 For the post office the end game is on. This year, the U.S. Postal Service will close half its processing centers. By late spring a first-class letter will take one to three days longer to arrive at its destination. By the end of this summer, Saturday delivery is scheduled to end. Over the next year the post office plans to close over 3,000 local post offices while slashing some 220,000 of its 650,000 employees.

Looking back, it is easy to distinguish three discrete stages in the 221-year life of the Postal Service.

Stage 1: Post Office Has a Broad Public MandateThe first stage began in 1792 when President George Washington signed legislation making the United States Post Office a cabinet-level department. It was a public institution with a clear mandate: to enable universal low-cost access to information. In its early years this led it to initiate free and low-cost delivery of newspapers, and eventually, to offer a special rate for periodicals and books.

The post office helped tie the country together physically as well as intellectually. Post roads were essential to the early development of the country. Rural free delivery established in the late 19th century, spurred improvements in roads and bridges since the post office would not offer service where roads were bad. In the 20th century, mail contracts underwrote the embryonic aviation industry.

In the 1820s, when private companies began charging a handsome fee to deliver information faster, enabling cotton speculators to make a killing on the difference in prices at the docks of New York and the plantations of Alabama, the post office responded by establishing its own express mail service. The private sector complained. A congressional investigation concluded “(T)he Government should not hesitate to adopt means…to place the community generally in possession of the same intelligence at as early a period as practicable.”

In the 1840s, when the private sector began siphoning off the most profitable mail routes, leaving to the post office only money-losing routes, Congress gave the post office a monopoly, enabling it to dramatically reduce the price of postage and initiate free door-to-door delivery in cities. In 1858, the first mailboxes appeared on street corners. At the end of the 19th century, when private parcel companies began treating their customers badly, the post office introduced parcel post. The competition resulted in reduced prices and improved customer service.

In the 1890s and early 1900s, financial panics and the closures of hundreds of banks led the post office to introduce postal savings banks. At its peak after World War II postal banks had over 4 million accounts and deposits exceeding $3.3 billion.

Stage 2: Post Office Becomes a Public-Private InstitutionBut after World War II, the post office’s inability to borrow money and invest long-term coupled with the dramatic increase in the volume of mail put an increasing strain on its system. In 1966 the mail system in Chicago literally collapsed under an avalanche of mail, leading LBJ to appoint a commission to study the future of the post office. The commission’s chairman, retired CEO Frederick R. Kappel, envisioned a more corporatized post office. Indeed, in testimony before Congress Kappel revealed his ultimate goal: “If I could, I’d make (the post office) a private enterprise…and the country would be better off financially. But I can’t get from here to there.” In the l950s, low-paid postal workers often moonlighted to make ends meet. It took 21 years for an entry-level worker to reach the maximum wage level. Strikes were illegal. Workers demonstrated, lobbied and even held prayer services to publicize their plight

In 1970, Congress voted itself a pay raise while stalling postal wage increases, sparking a wildcat strike by letter carriers in New York City. Other postal workers honored the picket lines and the strike spread throughout the nation. President Nixon sent in 25,000 National Guard and Army troops to attempt, unsuccessfully for the most part, to sort and deliver the mail. The Postal Reorganization Act of 1970 was a compromise between management and labor. Unions were given the right to collectively bargain over wages and hours and working conditions for the first time. Wages increased significantly. For the first time, postal work became a middle-class job for hundreds of thousands, many of them minorities. For management the Act gave the new quasi-public corporation now called the United States Postal Service (USPS) the right to borrow money and make long-term investments. In return Congress eliminated taxpayer subsidies, which amounted to 25 percent of the budget in 1971 (about $18 billion in current dollars) and demanded the USPS act more like a business.

Largely as a result of huge capital improvements, productivity soared. In 1966 Fortune magazine credited USPS with improving its service more than any other company or agency in America. In 1997, audits by Price Waterhouse found on-time delivery at 92%. The U.S. Postal Service was by far the most popular public agency. And between 1995 and 1997, postal operations produced a surplus of $4.6 billion.

But the tension between the public mission of the post office and the demand that it act more like a business, continued to grow. Management tried to close post offices and raised the possibility of ending Saturday service as early as the 1980s, leading Congress to pass laws forbidding the latter and significantly restricting the former. Under President Clinton, the Postal Service began contracting out services. Today, contracts comprise about 20 percent of its operating budget or $12 billion.

In 2000, the USPS began a formal partnership with FedEx and later UPS. Fed Ex provides air service for USPS parcels domestically as well as providing international logistics. In 2011, Alan

Robinson, executive director of the Center for the Study of the Postal Market, determined that USPS delivers 30.4 percent of FedEx ground shipments. The USPS Fed Ex partnership is known as SmartPost. The USPS-UPS partnership is known as UPS Basic or UPS Mail innovations, and may be the fastest growing parts of their businesses.

Stage 3: The Dismantling of the Post OfficeThe third and current part of the life of the post office began in 2006 with the passage of the misleadingly titled Postal Accountability and Enhancement Act. A bit of background is necessary to understand this historic piece of legislation. In 2001 the GAO placed the Postal Service on its high-risk list because of concerns about its economic future given the poor management and labor relations and increased competition from electronic mail. At the request of Congress and GAO, the Office of Personnel Management (OPM) conducted a review of the Postal Service’s liability to the Civil Service Retirement System. Almost everyone expected OPM to discover huge liabilities. Instead, it concluded that USPS had overfunded its pension plan by more than $70 billion. In 2003, GAO raised the estimated overfunding to more than $100 billion. In a sane world, USPS would have been able to use these funds to expand services, pay down existing debt and invest in new technology. But Washington is anything but sane. The USPS is considered part of the unified budget used for scoring purposes to estimate any legislation’s impact on the deficit. If USPS were to tap into its surplus funds it would increase the overall federal deficit.

For three years Congress debated what to do. Finally, in 2006 it passed a law that requires the Postal Service to pre-pay its health insurance fund by depositing an additional $5 billion a year for the next 10 years into the insurance fund to offset for the phantom accounting deficit under the unified budget. No other public or private agency is required to do anything remotely comparable.

In 2007, unsurprisingly, USPS suffered a $5 billion deficit. Today that deficit is over $20 billion and is used to justify the death of the post office by amputation of its work force, its processing centers and its local offices. The 2006 law also specifically prohibited USPS from offering new products that would create “an unfair or otherwise inappropriate competitive advantage for the Postal Service….” Elaine C. Kamarck of Harvard Kennedy School of Government has observed the essential contradiction in Congress’ attitude toward the post office from the very beginning of its new life as a corporation. “Congress wants it to be self-sufficient but doesn’t want it to make money.” Kamarck continues: “For example, in the mid-1970s, the post office was told to remove copy machines from post offices under pressure from lobbyists representing office equipment stores who feared that USPS was taking away its business. Later when the USPS initiated a 'Pack and Send' service, the outcry from Mailboxes Etc. and other private packing stores successfully challenged the service. "Years later, when Internet shopping took off, the delivery of packages to individual households should have resulted in a dramatic increase in USPS business. But parcel shipments were generated by large organizations and the USPS was not allowed to negotiate discounts and thus lost business. It was forbidden by law from lowering prices to get more business. This resulted

in the entirely incredible situation in the 1990s where the United States government negotiated an agreement for the delivery of U.S. government package services with Fed Ex because the USPS was not allowed to negotiate for lower prices!”

Today the strongest force in shaping the future of the Postal Service, aside from Congress, is the bulk mailers. Indeed, bulk mailers are formally represented in the USPS through the Postmaster General’s Mailers Technical Advisory Committee. Bulk mailers don’t care about post office closings because big mailers present their mail at Bulk Mail Entry Units. Saturday delivery is not a major concern either because advertising mail would do fine with even three-day delivery. Nor do they care about having a blue collection box on every corner, half of which have disappeared in the past 20 years. What bulk mailers do care about is price. They receive huge discounts for pre-sorting that is far in excess of what the Postal Service saves by receiving mail pre-sorted.

Where Do We Go From Here? So here we are, at the end game. Few any longer are even talking about saving the post office as is. Fewer still are talking about resurrecting the post office as an institution with a broad public mission. The debate now focuses on how many parts of the post office we can lop off. Kevin A. Hassett, then director of economic policy studies at the American Enterprise Institute, has written, “The Postal Service owns or operates 33,000 facilities nationwide and owns 219,000 vehicles. If we were to auction it off to private investors, the bids would likely be enormous.” Tad Dehaven of the Cato Institute insists, “The one-size-fits-all model where you have six-days delivery to every home in the country at a fixed price just doesn’t make any economic sense. What I envision is eventually consumers and customers dictate what they want and entrepreneurs figuring out how to satisfy those wants and needs.”

The National Academy of Public Administration will issue a report this spring on what it calls a "Thought Leader proposal" submitted in January. The eight-page paper urges the post office to be engaged only in last mile delivery and pickup. All other parts of the post office would be sold to private companies. Among the four signatories to the paper, astonishingly, is the director of advocacy of the Atlas Institute, dedicated to promoting the writings of Ayn Rand. The post office can and should be saved, but doing so will require a massive grassroots and lobbying effort. It is an effort that could cut across class and race and geography, cutting across rural Republican and big city Democratic districts. Such an effort could educate the American public about five key issues.

First, savings from cutting back postal services are largely illusory, even if we use the narrow cost-benefit analysis used by USPS. In 2008, GAO found that USPS had no way to measure savings from contracting out. Ending Saturday delivery will not save nearly the amount of money USPS predicts. There are alternatives to closing processing centers that achieve comparable savings. But we should argue for a wider cost-benefit lens. Remarkably, the post office does not need to take into account the actual cost to the local community of closing a

local post office! It does not have to take into account the increased out-of-pocket costs for people who have to travel longer distances, often on dangerous roads in the winter. The only cost benefit analysis that did bring these community costs into the equation concluded that the out-of-pocket costs to the community exceed the internal savings to the post office even in the worst-case scenario.

Second, the deficit is illusory. Over 80 percent of the deficit is a result of a phantom accounting system that imposes on the USPS an unprecedented, unparalleled and unfair financial burden.

Third, the post office remains a world-class institution and a remarkable bargain. A first-class letter in the United States costs 20-75 percent less than in countries a fraction of our size, like Austria, Germany, Norway, Great Britain, and Italy.

Fourth, the universal infrastructure of the post office is of enormous value and could be the foundation not only for it to provide increased services, but also to compete with the private sector if it were allowed to do so using the same marketing and pricing tools the private sector uses.

Fifth, the post office plays an important unquantifiable part in American life. In rural areas, the local post office may be the only community gathering place remaining, a place to meet one’s neighbors and share truly local needs and news. In a nation where more than one in five votes are cast by mail and in some states mail ballots have to be received by the close of polls, closing post offices can significantly burden some groups. In Nevada, for example, about half of the 27 Indian tribes rely heavily on the post office to register and to vote, and the closure of a post office will effectively strip them of that right. Closing post offices and delaying the delivery of mail places a significant burden on the most vulnerable of our citizens.

William C. Snodgrass, owner of a USave Pharmacy in North Platte, Nebraska, talked about the end-of-next-day, first-class delivery to local areas. His store mails hundreds of prescriptions a week to residents in mostly rural areas of the state that lack local pharmacies. If first-class delivery were lengthened to three days and Saturday mail service also were suspended, a resident might not get a shipment mailed on Wednesday until the following week. “A lot of people in these communities are 65 or 70 years old, and transportation is an issue for them,” said Snodgrass. “It’s impossible for many of my customers to drive 100 miles, especially in the winter, to get the medications they need.”

The Postal Service can still be saved. But the grave has been dug. The coffin has been built. And funeral music is in the air. Only the most aggressive effort by AARP, the NAACP, Consumers Union and other affected constituencies can save this most public of all public institutions. David Morris is co-founder and vice president of the Institute for Local Self Reliance in Minneapolis, Minn., and director of its New Rules project.

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26 Percent Say Privatizing USPS Would Improve Quality and Speed of Service

Source InformationAuthor: Emily EkinsTitle: 26 Percent Say Privatizing USPS Would Improve Quality and Speed of ServiceDate: March 5, 2013Source: Reason-Rupe Public OpinionWebsite: http://reason.com/blog/2013/03/05/26-percent-say-privatizing-usps-would2

Emily EkinsReason-Rupe asked Americans about the impact of allowing private package carriers like UPS and FedEx to deliver the mail. Most Americans (47 percent) thought the speed and quality of service would remain the same, 22 percent thought quality would worsen, and 26 percent thought service would improve.Expectations about privatization are in part explained by the underlying favorability toward the government-owned US Postal Service (USPS). Among the fifth of Americans who have an unfavorable view of USPS, a majority (53 percent) believes privatizing would improve service quality, 32 percent say quality would remain the same and 10 percent say it would worsen. In stark contrast, among the 80 percent of Americans who have a favorable opinion of USPS only 19 percent say privatizing would improve quality, 25 percent say it would worsen quality, and a majority (51 percent) say quality would remain the same.

In sum, strong favorability of USPS deflates support for privatizing USPS mail services. Eighty-percent of Americans are favorable toward USPS, with 28 percent who are “very favorable.” But Americans also like private package carriers like UPS (84 percent favorable) and FedEx (78 percent favorable). At the same time, twice as many Americans have an unfavorable opinion of USPS as they do UPS and FedEx (17 percent versus 9 percent). Nearly all political groups and demographics are equally critical of UPS and FedEx, but political differences emerge regarding USPS. A quarter of Republicans are unfavorable toward USPS compared to only 12 percent of Democrats. USPS may have had some difficulty in the Northeast and Southern regions, since nearly a quarter of these respondents also have an unfavorable view of USPS, while only 10 percent are critical of FedEx and UPS. Only 12 percent of Midwestern and Western respondents have an unfavorable view of USPS.

In the absence of widespread frustration with the US Postal Service, Americans may find privatizing it less compelling. The argument that privatization would harness free market forces to improve quality and reduce costs is lost on most people. Or perhaps this argument is not their initial consideration when confronted with the possibility of reform. It is possible that with greater discussion explaining how mail delivery could be improved with removing USPS’ monopoly over services, that Americans would be open to privatization. Currently, this argument has not been made salient enough such that Americans immediately bring it to mind when asked about reform.

Nationwide telephone poll conducted February 21-25 2013 interviewed 1002 adults on both mobile (502) and landline (500) phones, with a margin of error +/- 3.8%. Columns may not add up to 100% due to rounding.

Emily Ekins is the director of polling for Reason Foundation where she leads the Reason-Rupe public opinion research project. Page 1 of 1

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Title: Should the USPS be Privatized?Date: October 1, 2012source; From the October 2012 Issue of Direct Marketing News »Website: http://www.dmnews.com/should-the-usps-be-privatized/article/260402/#

Should the USPS be Privatized?

The U.S. Postal Service's (USPS) multibillion-dollar defaults to the U.S. Treasury has renewed questions as to whether the agency should be privatized or if there's another solution to the agency's dire financial predicament. The USPS's defenders—those against privatization—have been vocal; however, as the agency continues to hemorrhage money, many pundits concede that privatization may be a necessary evil. Those promoting privatization argue that at least it frees the USPS from Congress.

Matthew Yglesias, “Privatization…could make a lot of sense. If it happened, rural communities would either need to pay more for mail, accept diminished service, or subsidize postal services out of their own budget. But why shouldn't rural America face this tradeoff? Just like small towns, big cities have unique public service needs…that they're expected to pay for on their own. The other losers in privatization would be the [USPS's] own workers. Postal privatization in the Netherlands hasn't led to any catastrophic collapse in Dutch society, but it has transformed postal work into a much lower-paid occupation with grimmer working conditions.”

Joe Nocera, The New York Times … “Incapable of simply letting the Postal Service go free… Congress continues to micromanage it, offering various ways for it to cut costs and raise revenue. The Postal Service, for instance, wants to cut Saturday delivery to save money; a Senate bill passed in April defers that decision for two years…. The postal reform bill that has emerged from the Republican-led House of Representatives, however, does no such thing. Representative Darrell Issa, the chairman of the committee that oversees the Postal Service, talks fiercely about the need to lower labor costs, while describing the Senate bill as a “bailout.” What he is doing, of course, is using the fact that the Postal Service is going broke to impose a slash-and-burn approach—while ignoring the central reason the post office is running out of money: Congress itself.’’

Peter Orszag, Bloomberg Business .. ‘’Privatization is not always the best way to improve efficiency, but the problems facing the Postal Service will be difficult to address if it remains within the government, and there is no longer any sound reason for it not to go private…. The agency has been struggling to meet [its] challenges by becoming more productive—and has been more successful than many people may realize….Unfortunately, this new efficiency has been outmatched by a deepening of the Postal Service's predicament….Despite claims to the contrary, privatized entities do not, on average, become miraculously more productive than public agencies. Indeed, privatization can sometimes turn out to be a disaster…. In the case of the Postal Service, though, privatization has become the best path forward, mainly because it would take Congress out of the picture. Page 1 of 2

Mike Tae and Adam LaVier, The Washington Post … ‘’While privatization may offer some advantages in the long run, doing it now is neither politically tenable nor wise…. Congress would need to find a consensus to sell off the country's second-largest employer during the longest stretch of high unemployment in modern American history. Supporters of privatization cite the $13 billion overfunding

of the USPS's pensions. But few mention the $46.2 billion in underfunded health benefits promised to employees, which no private bidder would ever agree to take on. Immediate privatization would leave taxpayers with yet another multibillion-dollar bill. The [USPS] can become a sustainable business and stay under government control…in a way that would lead to privatization without wreaking havoc on its employees or the taxpayers.

OUR VIEW:Even as Congress dawdles and plays political football, privatization of the USPS gains little appeal. Yet there is a consensus that anything would be better than the current stagnation. Interestingly, no one is arguing the agency would functionally improve if it were privatized; in fact, some experts suggest that quality of service and working conditions would likely decline. The upshot—the only one at that—is that privatization would free the agency of Congress's iron grip and therefore be able to make its own financial decisions. The USPS is not yet at a point where this dramatic redefinition of the agency needs to take place. But check back in a few months: If the stalemate continues, it might be time to rethink how the USPS is governed.

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Source Information:Title: Best Fix for Postal Service is to Take it PrivateAuthor: Peter OrszagDate: July 24, 2012Source: Businessweek.com/ Bloomberg HomepageWebsite: http://www.bloomberg.com/news/2012-07-24/best-fix-for-postal-service-is-to-take-it-rivate.html

Best Fix for Postal Service Is to Take It Private By Peter OrszagThose who believe in the usefulness of government must be vigilant about making sure all its activities are vital ones, since the unnecessary ones undermine public confidence. With this in mind, Congress should now privatize the U.S. Postal Service. Further evidence for why this should happen came last week, when the Postal Service announced that it would be unable to meet billions of dollars in payments that are coming due in August and September for future retiree health benefits. Privatization is not always the best way to improve efficiency, but the problems facing the Postal Service will be difficult to address if it remains within the government, and there is no longer any sound reason for it not to go private.

The Postal Service faces three problems: First, Congress has not given it the permission it needs to cut costs and raise revenue -- and lawmakers seem unable to approve even modest reforms. Second, its market has been declining for years, as e-mail, electronic payment and other alternatives to traditional mail have grown. Third, the economic slump has caused a further drop-off in mail volumes. The agency has been struggling to meet these challenges by becoming more productive -- and has been more successful than many people may realize. As the Cato Institute (hardly a bastion of support for government operations) has noted, a decade ago sorting 35,000 letters an hour required 70 employees. Today, it takes only two. Over the past six years, the number of career Postal Service workers has declined by more than 20 percent.

Deeper Predicament Unfortunately, this new efficiency has been outmatched by a deepening of the Postal Service’s predicament. Over the past five years alone, mail volume has fallen more than 20 percent, and revenue has declined 12 percent. The post office lost $25 billion from fiscal year 2007 to fiscal year 2011. It now has less than $1 billion in cash, a dangerously small amount for a service with weekly operating expenses of almost $1.5 billion. Of the roughly 32,000 local post offices across the country, fewer than 7,000 generate enough revenue to cover their costs.

Which brings us to privatization, a path already being followed for postal services in countries such as Germany, the Netherlands and Japan. Despite claims to the contrary, privatized entities do not, on average, become miraculously more productive than public agencies. Indeed, privatization can sometimes turn out to be a disaster -- as has been the case with the financially troubled U.S. Enrichment Corporation, which produces enriched uranium for nuclear power plants, since it was unwisely pushed out of government by the Clinton administration’s Treasury Department during the 1990s. In the case of the Postal Service, though, privatization has become the best path forward, mainly because it would take Congress out of the picture. As New York Times columnist Joe Nocera recently argued, “the

problem is that neither the management nor the workers really control the Postal Service. Even though the post office has been self-financed since the 1980s, it remains shackled by Congress, which simply can’t bring itself to allow the service to make its own decisions.” And Congress won’t do so, as long as the post office remains part of the government. The Postal Service has many assets that could be managed more efficiently, if Congress got out of the way. In addition to its 32,000 post offices, it has 461 processing facilities, monopoly access to residential mailboxes and an overfunded pension plan. These assets would attract bidders. Consider, for example, that many processing facilities and post offices sit on valuable real estate, and it may be smarter to sell many of them than to keep them.

Arguments Against Three counterarguments caution against privatization, but none of them is convincing. The first is that Congress could simply unshackle the agency. Legislation is currently pending in both the Senate and the House that would give Postal Service management additional flexibility. In an increasingly polarized Congress, however, it is not clear if or when this legislation will be enacted. And even if it were passed soon, it would probably provide only temporary help. The second argument against privatization is that only a public-sector post office can provide universal service. Yet in sectors from telecommunications to electricity, universal service does not require government ownership. Privatization could come with the obligation to provide universal service. FedEx Corp. and United Parcel Service Inc. already deliver to almost all U.S. addresses. For the hard-to-reach, unprofitable routes, a subsidy could be provided. This would be more economical than the vast and opaque cross-subsidies now used to ensure universal service. The final argument involves the postal unions, and this one is not so easy to dismiss. Labor compensation accounts for about 80 percent of Postal Service costs -- a much higher share than at FedEx or UPS. No one would argue that, in the midst of a weak labor market, a large share of the Postal Service workforce should immediately be shed. But it is also true that the agency will one day need far fewer workers. Private ownership could facilitate more generous buyout packages and other measures to ease the transition to a leaner workforce.

The U.S. Postal Service has a long and storied history. Yet it is now struggling because the world has changed and because congressional sclerosis has prevented it from adapting to the new realities. The best way to modernize it now is to move it out of the government.

(Peter Orszag is vice chairman of corporate and investment banking at Citigroup Inc. and a former director of the Office of Management and Budget in the Obama administration. The opinions expressed are his own.)

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The U.S. Postal Service is Essential to Our Democracy and Our Economy

The free exchange of ideas is critical to representative government and was one of the reasons why the US Postal Service(USPS) was created. At its founding the Postal Service had a deliberate policy of subsidizing the mailing of newspapers and other periodicals, precisely to encourage the communication of ideas. The importance of this was understood by President George Washington who signed the bill authorizing the US Postal Service in 1792. The idea of a postal service is enshrined in the US Constitution.

Despite its historic role in the free exchange of ideas, the U.S. Postal Service is under attack. Republicans in Congress have taken aim at the Postal Service. They have been aided and abetted by Democrats who have remained silent, or like the current Postmaster General, even cave in to some of their demands. Congressional Republicans have created a thoroughly artificial financial crisis within the Postal Service to push for rate hikes, massive cutbacks in service and the closure of many small town and neighborhood post offices. Their ultimate goal is to privatize the USPS. Critics of the Postal Service claim that if privatized its competitors like UPS and FedEx can take up the slack. This is ridiculous. The USPS is a universal service that goes everywhere, including many places that UPS and FedEd do not. Its package delivery is less expensive for small businesses and better for shipping internationally. FedEx even uses the Postal Service to deliver to customers not covered by its own fleet.

Critics also maintain that the Post Service has been made by obsolete by the Internet. Yet as of 2011, 30% of the urban population and 40% of the rural population do not have broadband Internet. US broadband is also slower and less reliable compared with many other nations. But even if 100% of Americans had modern broadband Internet, this does not remove the need for the Postal Service.

The Internet is largely private property where freedom of expression is not guaranteed. Facebook can suspend user accounts and pages. Twitter can censor tweets. YouTube can remove videos. Websites can be deleted by the private companies that host them. Internet content is delivered (or not) by huge corporate telcoms.

Print is not dead and has its own particular advantages. Printed works are more portable than Internet-based communication and if printed properly, can last a very long time. Many people prefer to read longer and more thoughtful writing on paper. Once you own a printed copy of something, it won’t disappear because a web server blew up, hackers wrecked it, a government censored it or the website owner zapped it for their own reasons. Print makes it easier to have numerous backup copies. Both print and the electronic media have their advantages and disadvantages. At a time when people are concerned about Internet security and all forms of idea exchange are subject to interference, it’s best to

Source InformationTitle: The U.S. Postal Service is Essential to Our Democracy and Our EconomyAuthor: Website: http://www.dailykos.com/story/2012/08/13/1119528/-The-U-S-Postal-Service-is-essential-to-our- democracy-and-our-economy# Source: BobboSphere (online)Date: August 13, 2012

have as many ways to communicate as possible. This is especially true in the USA where political literacy is low and the means of communication is being concentrated in fewer and fewer corporate hands.Encouraging the free exchange of ideas is more important than making a profit. Over the years, the USPS has been forced to raise the rates for mailing periodicals to the point where smaller publications have curtailed or even suspended operations. Smaller publications are where new and unpopular ideas are first tested out. If we are serious about democracy, then the USPS should be lowering postal rates for periodicals and books to encourage reading and the exchange of ideas. It won’t make a profit, but so what? The Congressional Republicans are strangely quiet about how their efforts to strangle the Post Service will affect American democracy. This is especially odd considering their supposed reverence for the “Founding Fathers” who to one degree or another realized that the free exchange of ideas was critical to representative government, even if they were suspicious of actual democracy. We subsidize oil companies. Why not subsidize democracy?

Attacks on the USPS did not begin with the present crop of Congressional Republicans. There have been numerous times when the free exchange of ideas by mail has been attacked. One of the most egregious was directed against the USA‘s first known direct mail campaign. The mailing organizers were not hawking credit cards, insurance schemes, or political candidates. They were promoting freedom and democracy. Their shipment of direct mail arrived at the Charleston, South Carolina harbor on July 29, 1835. Not knowing exactly what to do with the many sacks of mail, Postmaster Alfred Huger set them aside. That evening a mob broke in, stole the mail and the next evening burned every piece in a mass demonstration that attracted a crowd of at least 2000 people. The mail consisted of unsolicited literature advocating the abolition of slavery, sent by the American Anti-Slavery Society (AAS). They were addressed to individuals whose names were a matter of public record. No one was ever prosecuted for this theft and destruction of US mail.

A pro-slavery mob burning abolitionist mail The Postmaster General of the USA ignored the blatant violation of federal laws and ruled that in this case “states rights” prevailed. President Andrew Jackson, still celebrated by some as a great “man of the people”, introduced legislation that would have banned abolitionists from sending mail to the southern slave states, although Congress eventually decided it did not have the power to that. Throughout the South vigilance committees were established to monitor the mails for any possible abolitionist literature and punish anyone caught with it. Where the force of law failed, state sponsored terrorism was always available.

Slave owners were the power behind racist mobs and politicians. The term "totalitarian" is normally used to describe a dictatorial government that subordinates the individual to its power. But I believe it can also accurately describe individual economic enterprises and how they are organized. By this description, each southern plantation was its own unique totalitarian institution. Taken together, they were a vast gulag of slave labor camps and the most powerful economic enterprises of their time. As a result plantation owners put a totalitarian stamp on American politics for much of our early history. Their reliance on slavery was associated with institutional racism, white supremacy, massive human rights abuses, ethnic cleansing, environmental destruction, militarism and territorial imperialism. It eventually resulted in the Civil War, which cost upwards of 750,000 American lives.

For the slave owners, tampering with the US mail to crush democracy was all in a day’s work. But of course abolitionists( a despised minority even in the North), continued to use the US mails where they could, until the time came when abolition of slavery finally became national policy. But even the slaveholders did not attempt to actually shut down the Postal Service when they went to war with it. The modern effort to destroy the Postal Service through deep cutbacks and eventual privatization is coming from a Congress molded by the power of corporate wealth. The modern corporation that began to emerge after the Civil War was the successor to the slave plantation as the USA’s most dominant economic institution.

Like the slave plantations before them, the power of today’s corporate wealth weakens our democracy.The modern corporation is normally organized in a topdown totalitarian manner.The corporation is a place that even Bloomberg Businessweek says is “where free speech goes to die.” Most Americans simply accept this as without question because corporate property is “private” property. How much American political culture is molded by the habits of obedience formed by working within totalitarian corporations is something that deserves further study. There are corporations who are reasonably benign and even supportive of democratic values, but there are others who have a dark association with extreme violence, white supremacy, environmental destruction, discrimination by race and gender, sweatshop labor, catastrophic financial fraud, war and other serious abuses. The corporate powered postal “reformers” in the money-soaked company town of Washington DC want to avoid any discussion of the democratic values that the Postal Service is supposed to uphold. How committed are the most powerful US corporations to the free exchange of ideas that is so critical to a democracy? Not very committed if one measures the amount of support they give the US Postal Service in its funding crisis.

Perhaps that is because corporate lobbying groups like the US Chamber of Commerce, the Business Roundtable, and the American Petroleum Institute want to ensure that their propaganda messages

dominate American thinking. That is consistent with the corporate drive to privatize education, dominate the mass media, crush what remains of the US labor movement and overwhelm their electoral opponents with the sheer force of money.

There is another reason for the hostility toward the USPS: The American postal worker. American postal workers are diverse, a true face of the

USA. They live in urban, rural and suburban areas. They include both men and women. They come from many different ethnic backgrounds and have had a variety of life experiences. They live in every state and US territory. They belong to unions and make a decent living which includes benefits like retirement and vacation time.

Through their unions they have a voice at the workplace and in the halls of political power. They can go to a union meeting and discuss issues that affect their lives and take action with other postal workers. They represent the dream that all working class people should have a comfortable living standard and a powerful voice in public affairs. From the point of view of the corporate elites, US Postal Service employees with their living standards and their unions, set a bad example for the rest of the working class. Today’s corporate agenda for working class America seems to be low wages, temporary jobs, no benefits, no job security, no voice at work, a limited voice in public affairs and no unions.

This is very dangerous to democracy because it creates a society with a vast gap between rich and poor. This feeds the social desperation that grows anti-democratic totalitarian political movements. It is also is a major factor in creating economic crashes such as this country had in 1929 and 2008, which also feed totalitarian movements of social desperation. Unions are an important part of modern democracies and the postal unions stand as living examples of that.

Your local post office is an essential part of the infrastructure of our democracy. Perhaps it's time for us to recognize our local post office for what it is, an essential part of the infrastructure for democracy. Perhaps we need to thank our postal workers for being who they really are: peaceful warriors for the democratic exchange of ideas. Perhaps it’s also time for us to reflect on how committed we are to democratic values and if we are willing to defend them. Defending your local post office would be a good place to begin.

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Anyone who’s waited, and waited, in line at the old letter hub knows the service could probably be run better.NEWSWEEK asked a variety of management consultants and business futurists how to turn the old pony expressinto a sleek, 21st-century moneymaker—or, at the very least, a breaker-even. Listen up, Postal Service (andCongress): for this advice, we’ll let you cut in line.

1) Get into the e-business. More people are e-mailing? So meet their needs. “Give every American an e-mail address when they’re born,” suggests futurist Watts Wacker. Might they look elsewhere for a different one? Sure, but at least you’ll maintain relevance in their mind. Plus, you can sell lucrative advertising on those accounts.

2) Increase service. Don’t drop from six- to five-day delivery; go the other way, says Kellogg School marketing profRichard Honack—to all seven. It seems counterintuitive to add service when you’re losing money, but people haveless faith in the system precisely because of spotty service. Consider tightening hours, but the USPS could be thefirst carrier to reliably deliver all week.

3) Advertise with coupons. It sounds like an archaic way to attract customers in a new era, but if people are flocking to the Internet, give them an incentive to come back. “We’re a coupon-cutting society,” says futurist and business strategist Marlene Brown. “Make people feel like there’s value added.”

4) Make a play for control of government broadband [Internet access]. With Congress considering an expansion ofbroadband access, why not put it under the USPS, asks futurist David Houle. “That would define the Postal Serviceas a communications-delivery service, rather than just a team of letter carriers. Don’t let the service’s tie to Congress make it fizzle. If used right, why not use it as an advantage?”

5) Rebrand. No one knows what the Postal Service stands for, says Wacker. “Fly like an eagle, what does that evenmean?” A company’s brand is its most valuable tool, or its biggest liability. Contract out to find a new logo andslogan that actually convey what you do and how you do it. And then use them. (In this week’s NEWSWEEKmagazine, we asked three design firms to get started.)

6) Close branches if you must, but do it strategically. Franchise services by region, posits business strategistGurumurthy Kalyanaram. You don’t need a full-service post office every few blocks in New York, for example.Some centers could be for letters only, others for packages. That way you cut down on staff size and service required to and from each.

Source Information:Title: Flying Like an Eagle?Author: Daniel StonePrint Source: Newsweek, 5 October 2009 (if you use this in your Research Paper, pretend you saw it in a Newsweek magazine), pg 33(use this page for Research Paper)

7) Reorganize and motivate staff. Paying high wages with inflated job security isn’t a competitive strategy. Unionsmay be fierce, but consultant Peter Cohan thinks management should put employee contracts out to bid. And addincentives: if a worker saves money, give him a percentage. Inversely, put jobs on the line to avoid losses. In otherwords, run it like a real business.

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The following graph is excerpted from the 2009 annual report of the United States Postal Service. The Delivery Challenge: Less Mail, More Addresses

Source Information:

Title: “The Challenge to Deliver: Creating the 21st Century Postal Service: United States Postal Service 2009Date:September 24, 2010Webpag: United States Postal Service

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These are tough times for the U.S. Postal Service. It’s being pummeled by high fuel costs. The soft economy is crimping the overall volume of mail, which fell 5.5 percent in the past year. Its business is also falling as Americans opt for e-mail over birthday cards and thank-you notes. Now comes another threat: consumers like Colleen Plimpton of Bethel, Conn. Earlier this year Plimpton became tired of the

Source Information:Author: Caitlin McDevittTitle: To Postal Workers, No Mail is ‘Junk’: With Revenues Falling the Post Office Owes Its Future To Stuff We Throw OutPrint Source: Newsweek (If you use information from this article in your Research Paper, pretend you go the information from a print source --)Date: September 27, 2008; page 72 (use this page number for info)

credit-card offers, catalogs and advertising fliers that clogged her mailbox. So in February she paid $20 to GreenDimes, a firm that helps consumers reduce their inflow of “junk mail” by contacting businesses on their behalf. “[Junk mailers] are cutting down trees willy-nilly, and that has got to stop,” says Plimpton.

To the post office, consumers like her are a serious threat. “Efforts to convince people not to receive mail are really going to hurt,” says Steve Kearney, a Postal Service senior vice president.

The Postal Service lost $1.1 billion in its latest quarter. That number would be even larger if it weren’t for direct mailings, which now constitute 52 percent of mail volume, up from 38 percent in 1990. Revenue from direct mail “is the financial underpinning of the Postal Service—it could not survive without it,” says Michael Coughlin, former deputy postmaster. But 89 percent of consumers say in polls that they’d prefer not to receive direct-marketing mail; 44 percent of it is never opened. That’s why 19 state legislatures have debated Do Not Mail lists, which would function just like the federal Do Not Call list. But partly due to opposition from postal workers, not a single bill has passed. When Colorado state Rep. Sara Gagliardi held a public meeting on a bill she was sponsoring, she was surprised when acrowd of postal workers showed up to express vehement opposition.

Both the Postal Service and the Direct Marketing Association say direct mail is a key source of customers for small businesses. “Advertising mail is a very valuable product to many consumers,” says Sam Pulcrano, Postal Service vice president for sustainability, who points to two-for-one pizza coupons as especially welcome surprises. To blunt opposition, the DMA recently launched the Mail Moves America coalition to lobby against the restrictions.

GreenDimes founder Pankaj Shah isn’t sympathetic. Not only is his company providing a service to consumers, he says, but it has also used its fees to plant more than 1 million trees. “We’re all about giving consumers choice, not about bringing down the post office,” he says. Still, as more consumers opt out of junk mail, rain, sleet and gloom of night may seem like the least of mail carriers’ problems.

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(The following is excerpted from an online article.)

E-mail is fast and simple, but to me an old-fashioned, handwritten letter has value in this speed-obsessed world. Ihave deleted hundreds of e-mails in one fell swoop, without taking the time to reread them, but I still have a letterthat my Grandpa Cullen sent to me when I was 8. I like to receive letters, thank-you notes, birthday cards and Christmas cards, and I like to send them too. Even today, it costs just 44 cents to send one from Danville to Sandybeach, Hawaii, or Frozentoes, Alaska . . . a genuine bargain.

Source Information:Title: Sending, Getting ‘Real’ Mail Still MagicDate: September 28, 2010Author: Kevin Cullenwebsite hosted by: Commercial News

Historians worry about the disappearance of permanent, written records. If there were no “real” letters, diaries,governmental files, handbills, pamphlets, magazines, newspapers and books—real ink on real paper—what wouldbe left? Will electronic records even survive for 100 years? And what will happen if they don’t? . . .

The Postal Service has been required to pay its own costs since 1970, and it made a profit until 2006. Since then,declining mail volume has created major problems. It delivered 17 percent fewer pieces in 2009 than it did in 2006,and lost $1.4 billion. That money was borrowed from the U.S. Treasury.

More declines in volume, coupled with the soaring cost of retiree health benefits, could create $238 billion in losses over the next 10 years, Postmaster General John Potter recently said. Approximately half of the present 300,000 postal workers are expected to retire by 2020.

Eliminating Saturday mail delivery would save $40 billion over a decade. Potter also wants to close and consolidate154 post offices. More and more part-time workers would be hired as full-time workers retire.

Clearly, mail delivery isn’t going away entirely. It’s an essential government function, like feeding the Army. Noprivate contractor will carry a letter from the Florida Keys to Alaska for 44 cents.

I’m going to do my bit by sending more letters. Our Christmas card list will be expanded. Birthday cards will go to more friends and family. And I’m going to thank more people, in writing, for more things. I will send more cards and letters to offer encouragement, interest and sympathy. It shows good breeding.

I have shoeboxes filled with kind letters sent to me through the years by readers who liked something that I wrote. I always thanked them by return mail. Many friendships began that way. Those messages weren’t deleted 100 at atime; they were saved, and they can be reread. . . .

It’s satisfying to write a “real” letter, put it in an envelope and drop it into the mailbox. A day or two later, I know,someone will hold it and connect with me. Who knows? It may be read by someone I will never meet, 100 yearsfrom now.

Not a bad investment, for 44 cents.

(“Sending, Getting ‘Real’ Mail Still Magic,” by Kevin Cullen, copyright © 2010 by Commercial News. Used by permission.)

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