National Assn. of Letter Carriers calls on Senate to reject postal service act, says it only provides short term relief, risks driving away customers, reducing revenues, fails to address biggest cause of Postal Service's recent financial distress

WASHINGTON , March 26, 2012 (press release) – National Association of Letter Carriers President Details Union's Concerns about Legislation in Letter to U.S. Senators

Fredric V. Rolando, president of the National Association of Letter Carriers (NALC), has formally called on the U.S. Senate to reject S. 1789 -- the 21st Century Postal Service Act -- because as currently drafted, it provides only short-term fixes. He said that while the measure "might provide resources to allow the Service to limp along for a few more years, it will not change the downward trajectory of this vital institution."

In a letter sent today to each U.S. senator, Mr. Rolando stated, "S. 1789 appears to be based on the Postal Service's dangerously misguided business strategy, which relies almost exclusively on reducing the quality and value of its services to households and American businesses, the main users of the mail." He added that it risks driving away customers and thereby reducing revenues.

Mr. Rolando said NALC has "no choice but to oppose S. 1789."

Rather than settle for harsh and counterproductive reductions in key services as S. 1789 would do, Mr. Rolando said, "What the Postal Service needs is a business plan based on a comprehensive rethinking of the institution, one that asks for shared sacrifice from all stakeholders but also allows this vital national resource to grow and prosper in the years ahead.

"Until a plan of this nature exists, it is dangerous to advance reform legislation, particularly when the legislation will do nothing but facilitate the Postal Service's decline," he told senators.

Mr. Rolando noted that just last week, a USPS witness before the Postal Regulatory Commission acknowledged that a study ordered -- but later stopped -- by the Postal Service on its own plan for service reductions indicated that the "combined effects of all the service cuts under consideration, including the elimination of Saturday delivery (and 80,000 delivery-related jobs), would reduce mail volume by an extraordinary 10.3 percent." The practical effect of such a drastic reduction in mail volume means that the cuts could exceed the projected savings.

NALC represents 284,000 USPS letter carriers, about a quarter of whom are military veterans.

Other key points from Mr. Rolando's letter about the flaws in S. 1789:

It fails to adequately address the single biggest cause of the Postal Service's recent financial distress, the mandate imposed by Congress in 2006 that the Postal Service pre-fund future retiree health insurance benefits. That mandate -- required of no other government agency or private business -- has cost USPS $21 billion over the past five years. It is money that could have been used to restructure USPS in light of changing economic, technological and social needs. The Senate bill would reduce that funding requirement, but "any burden at all is indefensible at a time when 150,000 jobs are at risk," Mr. Rolando said.

It fails to let the Postal Service introduce new products and services that take full advantage of its unique "last-mile" delivery network. Nor does it provide the Postal Service flexibility to price its services appropriately.

While Mr. Rolando acknowledged that some provisions in the bill have merit, such as the return of the Postal Service's surplus in one of its two pension plans and the limited allowance for the Postal Service to use its networks to generate new revenues (e.g., the delivery of beer and wine). Unfortunately, he said, the bill is too deeply flawed otherwise and -- unless fundamentally revised -- should be rejected.

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