Don't Let Greedy Corporations Privatize the United States Postal Service

By Michelle Mairesse
     The United States Postal Service was authorized by the United States Constitution in 1775 during the Second Continental Congress. Benjamin Franklin was appointed the first postmaster general, and the cabinet-level Post Office Department was created in 1792 from Franklin's operation with the mandate to "bind the nation together."

     To change the U.S. Postal Service from a public service operated for the common good to a privately-owned business operated solely for profit would devastate the economy and stability of the entire United States. This catastrophe is scheduled to happen if the American people don't intervene.

      A government-owned public agency that delivers to more addresses and to a larger area than any other postal service in the world, the U. S. Postal Service distributes 44% of mail delivered on the planet. In addition, it reliably records and forwards mail to changed addresses and issues money orders. Overall, the United States Postal Service has a record of reasonable pricing, punctuality, and efficiency surpassed by no other service in the world. The U.S. Postal Service has created a number of innovative programs, all realized through the constitutional mandate to bind the nation together.

  • Rural Free Delivery: Farm families, paying the same rates as others, complained to Congress because they were traveling long distances to receive and post mail. After a limited trial service proved successful, Congress made Rural Free Delivery part of the Postal Service in 1904.

  • Parcel Post: While Congress debated universal package delivery, a major express company declared a large stockholder dividend. Public indignation at the exorbitant profits and poor service of parcel delivery companies spurred Congress to pass the Parcel Post Bill of 1912.

  • Air Mail: In the 1920s and 1930s, U.S. Congressional legislation and U.S. Postal Service air mail contract regulations fostered development of a profitable civil aviation system for passenger airline service and cargo transport.

      To this day, for-profit mailers refuse to service remote or dangerous locations, relying on the Postal Service for end-delivery of letters and packages. Even for service between busy urban areas, private corporation mailers are not offering any bargains. In 2011, Fed-Ex sent letters from Houston to New York in two days for $20 to $30 dollars. The same letters mailed by the U.S. Postal Service were delivered in 2-3 days for 44 cents.

      Belatedly, government agencies are discovering that right-wing propaganda for total privatization is short on follow-up.

      An article in the Washington Post 1 cites a new study from the Project on Government Oversight. It concludes that outsourcing government services to private firms is frequently more costly than employing government workers.

      After canceling unproductive outsourcing contracts with laggard developers, in 2009 the New York State Controller's Office declared, "More times than not, it's less expensive to use state workers instead of outside contractors" 2

      In 2009, Arizona Governor Jan Brewer balanced the state budget by unloading the Capitol complex onto Wall Street for $81 million on a lease-back basis. Now Arizona taxpayers are on the hook for $1.6 billion to buy the buildings back. 3

      The canard that the U.S. Postal Service receives taxpayers' subsidies still circulates among the ideological privatizers. In fact, the Postal Service is self-supporting. Revenues come from sales of stamps and postal products. In 2006, the Postal Service handled the greatest volume of mail in its history, a rebuff to critics who insisted that "snail mail" (as opposed to e-mail) was on its way out.

      But 2006 was also the year Congress passed the Postal Accountability and Enhancement Act of 2006, which actually set up the US Postal Service to be privatized, to load it with an artificial "debt," and finally to sell its buildings and assets to the private sector.

      Here is how the artificial debt came about: The Postal Accountability and Enhancement Act compels the Postal Service to fund 75 years of future postal retiree benefits in an impossible 10-year period, a requirement to which no other government organization is subject. This means coverage for future employees not yet born, an unprecedented burden for any government agency or bureau. The U.S. Postal Service's Office of Inspector General concluded that the over-payments came to $75 billion, and the Postal Regulatory Commission's audit found an over-payment of $50 billion. Here is how the artificial debt could be paid: A projected $9 billion deficit, the pension fund overpayment, could be transferred into the health care retirement funds, which are currently buried in an escrow account overseen by Congress.

"The federal government . . . owes our Postal Service between $50 and $70 billion dollars in excess retirement benefits payments. The other overpayments to the federal government are for the unprecedented advanced payment of health benefits of future retirees of the next 75 years by 2016, amounting to $5 billion a year . . ."

Ralph Nader, Time to save the post office

      The Postal Accountability and Enhancement Act also forces the Postal Service into mandatory outsourcing and contracting with for-profits such as FedEx and United Parcel Service when the Postal Service can perform the same functions cheaper in-house. The Postal Service's Office of the Inspector General released an audit in 2010 showing how wasteful outsourcing can be. "It was more effective and economical in some cases for the Capital Metro, Eastern Great Lakes, and Northeast Areas to use ground transportation and domestic air carriers as well as to sort mail at Postal Service plants than to use FedEx to perform these functions. Because the areas used FedEx, the Postal Service incurred about 35.3 million in unnecessary costs. If these areas implement our recommended changes, we estimate the Postal Service could save $170.6 million over a 10-year period." In 2010 FedEx received $1.37 billion, United Parcel Service received $95 million and Northrop Grumman received $500 million in United States Postal Service contracts. In 2001, FedEx was allocated the Postal Service's overnight packages and Express Mail and permitted to install its own drop boxes and offices on Postal Service property nationwide.

      On December 5, 2011 the Postal Service announced that it will close more than half of its mail processing centers, eliminate 28,000 jobs and end overnight delivery of first-class mail. This will close down 252 of its 461 processing centers as well as 3,700 local post offices in mid-May 2012.

      In a radio interview with Alan Minsky of KPFK, economist Michael Hudson observed "The pretense is that privatization is more efficient. But privatizers add on interest and financial fees, high executive salaries and bonuses, and turn the roads into toll roads and other infrastructure into neofeudal fiefdoms to charge monopolistic access fees for people to use. This is what has happened in Chicago when it sold off its sidewalks to let bankers finance parking meters in exchange for a loan. Chicago needed this loan because the financial lobbyists demanded that it cut taxes on commercial real estate and on the rich. So the financial sector first creates a problem by loading the economy down with debt. And then 'solves' it by demanding privatization sell-offs under distress conditions."

"While the U.S. Postal Service is obviously not a product of the New Deal, that same conservative agenda is behind the attack on the Postal Service we're witnessing today. Cutting the workforce, closing post offices and plants, and moving toward privatization through outsourcing and divestiture of assets--these are all part of an effort to shape the postal system in ways that serve the interests of an elite business class rather than the good of the country as a whole. The free-market ideology and greed for profits that drove efforts to undo the New Deal are basically what's driving the 'postal reform' movement today."


      These practices, essentially leveraged buyout schemes, are now being imposed on the United States Postal Service. For two decades, the privatizers have harped on consolidating and selling post office buildings. First, the United States Postal Service moves workers from a central post office to a suburban annex. Then "surplus workers" at the central post office are fired and the big building is sold to the highest bidder, who leases it back to the United States Postal Service. A "lease problem" develops, which justifies closing the post office and exploiting the real estate for private profit.

     The Netherlands learned this lesson the hard way. Tiny Holland, twice the size of New Jersey, was the first European country to jump on the privatization bandwagon. After replacing trained postal workers with temps earning less than minimum wage, the for-profit companies closed nearly 90% of Dutch post offices. The splendid main Amsterdam post office is now a shopping mall. Dutch newspapers carry front-page stories about citizen outrage over high prices, decreased collections, frequency of misdirected letters, and erratic, slow delivery of packages. 4

      How could this happen to us? It has already begun. FedEx, for example, has private planes at the ready to transport members of Congress to their homes. This for-profit corporation sits on a number of committees in an advisory capacity and donates heavily to both parties. Only those congresspersons concerned for poor people, rural dwellers, and constituents without computers or transportation are putting up a fight against the unnecessary, reckless plans to privatize the United States Postal Service.

      We must stop the juggernaut that seizes public services paid for by the general public in order to enrich executives of private corporations. Tell your senators and representatives that the United States Postal Service belongs to the people of the United States of America, and we, the people, plan to keep it.

"The push to dismantle the U.S. Postal Service's distribution and delivery network is a scheme by corporate privatizers to crush the largest organized workforce in federal employment, pick apart a trusted government service, and grab the most profitable parts of the business for their own enrichment."

John Curtis, What's Behind Postal Crisis? Privatization


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