Postmaster General Patrick Donahoe
http://thedianerehmshow.org/shows/2011-09-27/postmaster-general-patrick-donahoe
The U.S. Post Office is on the verge of defaulting on its health care fund obligations and may have to shut down entirely this winter unless congress intervenes. This according to Postmaster General Patrick Donahoe. He has proposed cuts to save the service, including ending Saturday delivery, closing hundreds of local post offices, and laying off nearly a fifth of the work force. President Obama recently presented his plans to save the institution, which backed a five day delivery week. The postmaster general discusses the future of the U.S. Postal Service and what it means to consumers.
Guests
Patrick Donahoe
the 73rd Postmaster General of the United States.
Fredric Rolando
president of the National Association of Letter Carriers
Program Highlights
The famous motto goes, neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds. But now, a financial storm could shut down Postal Service this winter. Earlier this month, Postmaster General Patrick Donahoe testified before Congress that the USPS needs emergency action to stabilize its finances.
Pre-funding Health Care Benefits
The postal service is forced to pre-fund its employees' health benefits up to about 50 percent, which is one of the reasons for its current financial problems. "We floated the idea of taking over our own health benefits because if the first solution doesn't happen, we have to get out from underneath this pre-funding," Donahoe said. "We don't know of any other private companies that pre-fund anywhere to the rate that we do."
Getting the Post Office Back on its Feet
If nothing changes over the next few years, Donahoe estimates that the system will be in the hole by about $18 billion. He proposes taking the organization's expense line down by about $20 billion between now and 2014. If that happens, the system will become profitable. But it would also involve laying off about 120,000 workers. Since 2000, the postal service has reduced its staff by about 250,000.
Where the Losses Are
"We are losing first-class mail at the rate of 7 to 8 perecent a year. First-class mail pays freight. The contribution we get from that product keeps the 33,000 post offices open. It keeps our 200,000-plus routes delivering six days a week," Donahoe said. There is no substitution for first-class in terms of revenue generation, according to Donahoe.
Raising Prices on First-Class Mail
The problem with raising stamp prices is that this may cause more people to turn to online bill-pay and similar Internet services rather than mail. "The single piece where you and I would put a stamp on a bill, that's probably less price sensitive. But when you change prices like advertising mail, people will either reduce the number of pieces they mail or go to the Internet. We can't afford that," Donahoe said.
Looking Ahead
"The postal service plays a very important role in American economy and society today, as we have for 200 years. There's nothing in the near future that, I think will threaten that," Donahoe said.
You can read the full transcript here.
Comments
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Let’s get the REAL reason for the Postal Service’s financial difficulties on the table up front.
It’s not a dramatic loss of business. The loss of first-class mail business because of e-mail is largely offset by package deliveries generated by the internet.
It’s not employee wages and benefits.
It’s this: In 2006, Congress mandated that the Postal Service must set aside over 10 years enough money to cover future employee health care commitments for the NEXT 75 years. NO other public or private enterprise is expected to do such a preposterous thing. It’s a poison pill administered by ideologues who can’t stand the thought of a successful government owned enterprise; they cook the books to make the Post Office look like a failure, so the way can be cleared for privatization. Even with this burden, the Postal Service was doing OK until the recession hit.
I bet most Americans aren’t aware of this. If they were, any public support for the wholesale closure of post offices and ending Saturday delivery would evaporate.
Congress should undo what it did. The Republicans claim to be against government regulation. Here’s one regulation they could get rid of and help the public at the same time, but I guess to do so would not serve their ideology.
necessary IT is, shreding Constitutional mandated means of communication, and bonus removal of last 'good' union jobs, in order to complete the plan
as libraries close, higher education becomes ever more unaffordable, and internet access about to be MORE expensive as law obsoletes many 'surfers'(cutting off the poor who cannot upgrade today- like the ones who lost their television channel)
so as no money to pay bills anyway, said exworker terminated for whistleblowing within USPS while LOL semi-hysterically, and no 'direct deposit', and losing home(and internet access) in 30 daze(and days)
will not be able to return to mailing bills anyway???
heard the entire network to be USed as Soylent Green production and distribution with the motto 'neighbors serving their neighbors'.
oh the stories US could tell... if not prohibited
(trying to regain 25 year career with congressional military industrial complex to save US)
now lay back and try to enjoy IT
making relevant and factual observations will lead to no good BUT thanks for playing
From the side of many postal workers, I see a lot of "down-to-the-wire management" that expects workers to adjust again and again without warning to bad planning and seemingly arbitrary decisions on the part of those who are being paid big salaries to run the post office.
A trend that seems apparent in terms of hiring/firing at the Post Office is management trying to downsize numbers of full-time workers to replace them with part-timers who do the same work -- often for the same or similar hours -- but without protections from bad bosses, without overtime pay, and without healthcare and other benefits.
It's disingenuous for the postmaster to claim, as he did last week, that when his negotiators agreed to the no-layoff clause in the latest contract they were hopeful of better times, so they didn't think it would be a problem. Now he's on a big public relations campaign to engage public support for P.O. petitions to Congress to let him continue with poor management practices -- at the expense of workers. The consequences of a number of bad practices may be more apparent now but they have been there for a good long while.
Wouldn't it be refreshing for management to sit down with workers and say, genuinely, we want to hear your thoughts on how to make this better? And wouldn't it be a surprise if "layoffs" happened first among the top-salaried employees?
Not everyone has the means of phones, computers , radios and televisions. Therefore they are unable to fully participate in citizenship, which prevents full sharing in its rewards, advantages, and responsibilities.
The irony of all ironies is that life sustaining resources are wasted at less than efficient levels of providing needs for all. Mother earth will no longer apply.
rita_marvin@sbcglobal.net to respond.
I remember thinking during all that time that the postal service sponsored the olympics , where does all that money come from? honestly we could do without saturday delivery, though i do not want to see postal workers lose jobs. they do an exceptional job. there has to be a better solution.
It seems to me that "mail" has been privatized by large-scale moves to internet communications provided by commercial ISPs.
Can the Postmaster General comment on why the Postal Service never became a PUBLIC ISP. It would seem to solve so many problems with universal service to have a low-cost, uniformly-priced, simple e-mail service that everyone could afford. It would give people real choice set beside commercial ISPs that might offer more services but the costs of which are out of our control.
BTW - I really like sending mail by the Postal Service, as I enjoy sending and receiving cards and letters, but I am also very conversant with the Web and e-mail as well as phone texting, etc.
Thank you.
mancuroc-
You're right about the health care funding, it was a Conressional trick to reduce the federal deficit.
Unfortunately, that would only solve $5.5 billion of an expected loss of $9+ billion.
What bothers me the most are the silly arguments you hear about cutting Saturday service. If medicine delivery is an issue, one I hear over and over, why not cut Wednesday delivery and leave Saturday alone? If people can go without there prescriptions on Sunday, they should be able to handle Wednesday.
The postal system is perfect for many things, not just delivering letters.
2 examples.
1) Post offices should be nodes of democracy. Big touchscreen computers at each post office, that are all linked to the main website, that collect our input and display it back to us on a big map, with post-office icons that change color based on our input, will help bond our nation and help us make fast decisions.
2) Mail trucks can pull trailers that can collect materials from all our homes. A corps of volunteers, or employees from other businesses, can ride along with the carriers, and collect curbside reusable materials, especially metals and woods, that people otherwise throw out, and don't bother to figure out how to pass on.
Thinking outside of the box will save the day!
We NEED the postal system - for urgent needs of democracy and of re-using our materials.
---I remember thinking during all that time that the postal service sponsored the olympics , where does all that money come from?
From the advertising budget. The Priority Mail stuff (which is what they advertise on TV, IIRC) makes them money, right? If bulk mailing doesn't fluctuate based on general ads, their goal is to do more of the things they can do which makes them money.
I get lots of mail, but most is junkmail. How about charging the same postage to the companies which mail it as I pay for a stamp?
In a recent video to USPS employees, the PMG said that we have upwards of $100 Billion that has been co-opted by Congress and that we are unlikely to ever get it back. I imagine that most CEO's would roll over and play dead on this issue just like he is. Meanwhile his dedicated employees are expected to accept his proposals to lower delivery standards (5 day delivery, 2-3 day service -instead of one- for 1st class mail, etc.) and NOW he wants to take over control of our pension and healthcare systems!! Please ask him why he isn't screaming from the rooftops to get Congress to pass HR 1351 as loud as he's claiming we are bankrupt. This should be goal #1 and our ONLY unified corporate position, not the dismantling of our highly rated service and the extraordinary dedication of our employees.
Thru rain, sleet, snow and gloom of mismanagement. May God help us all.
Why do we expect the U.S. Postal Service to be self-supporting as if it were a private enterprise? This is fiction. Postal service to the 50 states and the territories is an essential government function and should be funded, if necessary, from general tax revenues.
The USPS might consider converting to the French model and expanding its services. La Poste deals with mail, but it is also a banking institution. And it is the best bank in France: there is a post office in most towns, even very small ones, and not only they are open for long hours, but also on Saturdays.
Come on! Talk about Congress' requirement of the USPS to fund 75 years of pensions in 10 years! That accounts for 100% of the deficit that they're facing. That's THE issue here.
Delivering to every address 6 days per week is not worth the expense.
Why not deliver every other day?
Odd addresses Mon,Wed, Fri, Even addresses Tue,Thu,Sat
Who is resisting, advertisers?
A cheer for the post office. I have never had any complaints and still do not. I love the post office. Many many years ago when I was a kid in rural Indiana, the post office was our link to the world. To this day I still look forward to getting the daily mail and if the schedule is reduced to only five days a week I will be very sad on Saturdays when there is no mail to look for.
Thanks to all the folks in the post office for all the years of great service.
Kathy T.
Our post office, in Boone, NC, is slated to be closed. But the information they said they are using was almost totally incorrect. They did not know how many employees are there (they said 1.5; it's 1). They were quoting businesses that were no longer using the P.O. - those businesses had either closed or moved out of town. They did NOT know about the businesses that are the primary users of the P.O. The P.O. pays NOTHING for use of the building. The only cost is the salary of the one employee and the electric bill - which the Town will be taking over shortly. But they will lose a lot of business to UPS and FED EX if it closes. Closing this Post Office will be a net loss.
I would like to know how much of an impact the financial institutions (ie: Credit Unions) that are there to service postal workers, are going to have to bear. Especially in Roanoke, VA where the issue of closing down the processing center has been raised, in order to send mail to North Carolina. Resulting in the termination of 300 plus jobs.
The impact on the Roanoke Postal Credit Union will be devastating.
Can the Postal Service not offer early retirement to some workers?
I would like to know how much of an impact the financial institutions (ie: Credit Unions) that are there to service postal workers, are going to have to bear. Especially in Roanoke, VA where the issue of closing down the processing center has been raised, in order to send mail to North Carolina. Resulting in the termination of 300 plus jobs.
The impact on the Roanoke Postal Credit Union will be devastating.
Can the Postal Service not offer early retirement to some workers?
Here's a question:
If The Postal Service eliminates 17% of the service provided to save 2% of their total operating expenses,
AND
The Mailers Council would pull 26% of their business from us and give it to questionable characters to tie to your doorknob, toss on your driveway, or leave on your porch as they have stated.
THEN
You have a savings of 2%, with a new loss of 26% would equate to a total loss of 24% of the income for the US Postal Service with a 17% loss of service. How is that even close to a good idea?
Wisdom would dictate that the US Postal Service stick to the basics of its existence and enhance delivery.
Why not look at five day delivery that is not traditional Monday thru Friday? A delivery system Monday thru Wednesday and Thursday thru Saturday would still allow two-day delivery.
FedEx does deliver to homes on Saturdays. They do not have home delivery on Mondays.
Thank you for excellent service after hurricane wilma here in south florida. Why isn't the po better integrated with fema? They know little about delivering food and water to people, yet a postal worker was making deliveries daily.
As I can see the conundrum the USPS is in I find it hard to rally any emotion. This is America and we do not have monopolies. They have made themselves obsolete by providing poor service with attitude and not being able to compete with other delivery services. I will go out of my way to avoid using them due to the NUMEROUS times they have not come through on delivering important mail. The times I have been to my local post office they seem overstaffed, unwilling to help find lost mail and complaints fall on deaf ears. They seem well aware of their wonderful benefits and are watching the clock count down to retirement. If we decrease the junk mail that is filling our landfills we could easily cut back to 5 days a week….. I know I would not only not miss them but be thankful.
It seems that maybe this is not only my local USPS as Seinfeld created an entire character, Newman!
I don't see an issue with going to five days a week for mail delivery. Most everything is done electronic and probably the only thing in the mail is junk, which could wait until Monday!
Also if they are concerned about package delivery then just have that operating on Saturday with having a few offices open for business.
I have an idea. To save money, having only 5 days a week of delivery is not so bad, but probably having 2 days in a row is not good.
SO, just make the day that will have no delivery not be on the weekend!
We could have a mail holiday on Tuesday or on Wednesday. That way the Saturday delivery could continue and also you could save on electricity, etc, by having another day of no work. BTW, employees love a day off during the week- maybe then we'd have happier postal workers- better customer service.
Mail HOliday on Tuesday !!! :) thanks and best of luck staying in business- we need you USPS
mancuroc wrote:
"Let’s get the REAL reason for the Postal Service’s financial difficulties on the table up front.
It’s this: In 2006, Congress mandated that the Postal Service must set aside over 10 years enough money to cover future employee health care commitments for the NEXT 75 years. NO other public or private enterprise is expected to do such a preposterous thing. "
No. It's not preposterous - and I have nothing against the post office ideologically. That charge is nonsense. It's a constitutionally mandated function of the FG (for once).
Look at public pensions in CA and WI. These were consistently underfunded and raided and now, CA at least, could still go belly-up because of them. If entities (whether states or Federal offices) are going to make promises to their employees, they better be prepared to demonstrate that they can keep them and fund them in a fiscally responsible way.
If your boss did to your 401K contributions what these people have done to their employees' pensions and healthcare funds, he'd be sitting in jail a long time ago.
I'm very skeptical that the USPS will go away. It has too many unduplicated services. It's too many valuable assets. And it's mandated by the U.S. Constitution.
But there are too many employees that conduct themselves as if it's an entitlement rather a business. The problems are primarily on the phone or in the post office. By and large, the letter carriers are very responsible, and generally good neighbors.
UPS and FedEx customer contact personnel are generally known for being professional, and act with a sense of urgency. The USPS needs to recruit and train using its competitors (who are also its partners) as the model. You can be sure that FedEx and UPS DO NOT use the USPS as its model for training and recruitment.
Just repeal the silly benefit funding mandate.