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Eye Opener: Postal Service defends cutbacks

By Ed O'Keefe

Eye Opener

Happy Friday! Postmaster General John E. Potter defended his proposals to cut Saturday mail delivery and close post offices on Thursday, arguing that several major American brands and industries have made cuts to ensure future viability.

"If the Postal Service were provided with the flexibilities used by businesses in the marketplace to streamline their operations and reduce costs, we would become a more efficient and effective organization," Potter said in his prepared testimony to a Senate Appropriations subcommittee. "Such a change would also allow us to more quickly adapt to meet the evolving needs, demands, and activities of our customers, now and in the future."

Potter wants Congress to give him more flexibility to manage delivery schedules, increase prices and close post offices, if necessary.

Here are the examples of cutbacks he cited on Thursday:

• In 2009, Sears closed 62 underperforming stores and initiated an aggressive global digital strategy.

• In November 2009, L.L. Bean announced it would be closing an outlet store in Portland, Maine.

• In September 2009, a news item reported that Citigroup was considering shutting or selling some of its 1,001 branches in North America following a $45 billion federal bailout. In 2008, Citigroup announced it was cutting its workforce, worldwide, by 14 percent, through the sale of some units or through layoffs.

• In 2008, Starbucks announced it was closing 5 percent – more than 600 – of its stores. In 2009, it announced it would close an additional 300 stores.

• In 2009, GM told 1,100 dealerships that it would drop them from its retail network effective October 2010; GM also discontinued the Saturn, Pontiac and Hummer lines of cars.

• A January 2010 news item reported a 10 percent cutback in the number of available airline seats, caused by airlines using smaller planes or reducing the number of flights.

Potter's efforts to cut Saturday delivery formally begin next week when he meets with the Postal Service Board of Governors on Wednesday. He'll try to convince postal regulators on March 30 before making his case to Congress again in mid-April.

Leave your thoughts in the comments section below

Please Note: The Federal Eye is enjoying a three-day weekend, so blogging will be light today. Normal blogging resumes on Monday.

Cabinet and Staff News: Cabinet secretaries name their NCAA March Madness Final Four picks. Secretary of State Hillary Rodham Clinton faults Russia for its plans to complete a nuclear power plant in Iran. Attorney General Eric H. Holder Jr. receives the Chesterfield Smith Award and speaks at the 2010 Pro Bono Institute Annual Seminar/Forum today in Washington. How Richard Holbrooke wants to spend your money. Federal Reserve Chairman Alan Greenspan concedes the Federal Reserve failed to gauge the bubble. Nawar Shora is taking the battle for Arab and Muslim rights inside the TSA.

DEFENSE DEPARTMENT:
Defense official says Afghan program was authorized: The senior Defense Department employee under investigation for allegedly running an unauthorized intelligence-gathering operation in Afghanistan, says his now-suspended program was fully authorized by top U.S. military commanders.

Pentagon sees a threat from online muckrakers: To the list of the enemies threatening the security of the United States, the Pentagon has added WikiLeaks.org, a tiny online source of information and documents that governments and corporations around the world would prefer to keep secret.

EPA:
EPA to study natural-gas drilling's effect on water: It's a $1.9 million study into how drinking-water supplies are affected by hydraulic fracturing, a method used to turn shale rock into natural gas wells.

FBI:
U.S. agents target El Paso gang in effort to solve 3 killings in Juarez: More than 200 federal, state and local law enforcement officers swept through El Paso on Thursday, picking up suspected members of the Barrio Azteca gang in a bid to learn who killed three people with ties to the U.S. Consulate in Ciudad Juarez, Mexico, last weekend.

GOVERNMENT WORK/LIFE/OPERATIONS:
NTEU joins call for union election at TSA: The union filed a petition with the Federal Labor Relations Authority asking for an election to determine which union will represent Transportation Security Administration workers once its employees are granted collective bargaining rights.

STATE DEPARTMENT:
Obama's Asia trip delay shows lower priority of foreign policy: The situation might not be all bad. The June trip might allow more time for the administration to work out key cooperation issues with both Indonesia and Australia and a new schedule might be more relaxed than the hurried agenda put together for the trip.

U.S., Russian negotiators 'at the finish line' on new START nuclear pact: Secretary of State Hillary Rodham Clinton and the Russian foreign minister said after talks here that they awaited word soon from negotiators in Geneva who have been working 18-hour days to wrap up the agreement.

TSA:
Interrogation work by TSA nominee's firm under review: Senate aides vetting President Obama's pick to head the agency are looking into whether the company he founded worked at Iraq's Abu Ghraib prison, which became notorious in 2004 after stories emerged of prisoner abuse there.

U.S. POSTAL SERVICE:
Poll: Most OK with 5-day mail service: A majority of Americans are willing to accept cuts in mail delivery days to preserve the U.S. Postal Service, a USA TODAY/Gallup Poll found.

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By Ed O'Keefe  | March 19, 2010; 6:00 AM ET
Categories:  Eye Opener, Workplace Issues  
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Comments

I had to pay thousands to my congressman to keep our post office off the closure list.

Posted by: blasmaic | March 19, 2010 8:24 AM | Report abuse

Government spending must be cut in all areas.

We need every penny to support the unfunded liabilities of Social Security, Medicare and the entitlement called Health Care plus pay down the deficit.

You can be certain that taxes will be raised by every jurisdiction to pay for the Democrats spending!

Posted by: mwhoke | March 19, 2010 8:25 AM | Report abuse

It's ridiculous that the Postal Service has to even defend the cutbacks. It's the only government (quasi-government) agency doing the right thing by recognizing reality and then trying to shrink itself to match that reality. It's Congress that lives in some netherworld where the facts get in the way of the good story.

Posted by: rag91354 | March 19, 2010 8:51 AM | Report abuse

He should also consider taking out a layer or two of management. My local post office has far too many management types standing around doing nothing and continually berating employees. They definitely hae too many chiefs for the number of actual employees they have there.

Posted by: Rockblot | March 19, 2010 9:31 AM | Report abuse

And you really think the Gov't can run ANY program without going over the budget?????

Posted by: Jimbo77 | March 19, 2010 10:08 AM | Report abuse

If the President would put a business person in charge of the post office and require it to make a profet like Sears and GM I would be willing to listen to Potter's explaination of why the PO needs to cut Saturday delivery. However, I feel that they need to be judged by how they operate from a business prospect. How about cutting some of those large salaries. There are folks out here that will do that work for less, even on Saturday.

Posted by: Philwamock | March 19, 2010 10:35 AM | Report abuse

Has the PO put in EFFECTIVE controls so we don't end up paying top prices when PO management is transferred to a new location?

I still say the magic bullet for the PO is greatly increasing the postage for "junk mail".....and holding consumer postal increases to a minimum. We "own" the PO, not every grocery store, tire store, or other mercantile operstion. The PO has lost sight of its mission.

If, by chance, the PO is allowed to cut back DELIVERiES on Saturday, which usually is a lot of magazines (remember them?) and junk mail....(see above) will we be guaranteed that moving the mail through our rather expensive postal system will still occur...ie, neither rain, nor sleet, blah, blah....nor SATURDAY SHUTDOWN will not inhibit the movement of mail from location to location......just Saturday DELIVERY will stop??? I would hate like hell if my credit card payment went into a mailbox on a Thurs. night or Friday ..even at the PO...and didn't get yanked out of the box until, let's say, the following Monday...or later to START its journey. How about that one, Mr. Postmaster General?

Posted by: connyankee1 | March 19, 2010 10:39 AM | Report abuse

Has the PO put in EFFECTIVE controls so we don't end up paying top prices when PO management is transferred to a new location?

I still say the magic bullet for the PO is greatly increasing the postage for "junk mail".....and holding consumer postal increases to a minimum. We "own" the PO, not every grocery store, tire store, or other mercantile operstion. The PO has lost sight of its mission.

If, by chance, the PO is allowed to cut back DELIVERiES on Saturday, which usually is a lot of magazines (remember them?) and junk mail....(see above) will we be guaranteed that moving the mail through our rather expensive postal system will still occur...ie, neither rain, nor sleet, blah, blah....nor SATURDAY SHUTDOWN will not inhibit the movement of mail from location to location......just Saturday DELIVERY will stop??? I would hate like hell if my credit card payment went into a mailbox on a Thurs. night or Friday ..even at the PO...and didn't get yanked out of the box until, let's say, the following Monday...or later to START its journey. How about that one, Mr. Postmaster General?

Posted by: connyankee1 | March 19, 2010 10:42 AM | Report abuse

I never could understand why some neighborhoods are allowed to have front door mail slots, when a row of mailboxes at the front of neighborhoods would be much more efficient and save money.
Postal workers could reach twice as many homes if they could go by vehicle instead of walking. It should be required.

Posted by: ashdaleuf | March 19, 2010 11:27 AM | Report abuse

Bravo for closing post offices but they want to close MANY more but Congress will not let them! The other major problem is the delivery people don't work a full day. In my mom's building, he fills the boxes in the mail room and spends the afternoon reading or making personal cell phone calls. My brother's delivery person spends a lot of time walking in the nearby park. But they have a great union protecting them!

Posted by: thinkingmom | March 19, 2010 12:26 PM | Report abuse

I do not believe that the postal service is in that bad of shape that it cuts out Saturday delivery. If the postal service would take and perfect the technology it already has it would eliminate at around 10 hours a week per route which is more than the one day a week they want to cut out. Many routes are small now and need a build back that routes can be eliminated but are overlooked. These routes are getting paid hours for doing nothing. So much money and time are being wasted that there truly are easier solutions than to change the law. DOES ANYONE REALIZE THAT WE DO DELIVER FOR FED EX AND UPS???? Without the postal service they would be in our position. Tell everyone the post office delivers for all!!!

Posted by: crook123 | March 19, 2010 8:39 PM | Report abuse

The Post Office needs MASSIVE CHANGES across the board.

It is losing BILLIONS AND BILLIONS

EMail has taken over the industry

Posted by: Bious | March 20, 2010 11:53 PM | Report abuse

What the Post Office needs is to have Congress GIVE BACK THE $75 BILLION DOLLARS that they were overcharged for Civil Service retiree benefits. The news media is all over the proposed 5-day deliver debacle, but the real story is what $75 BILLION DOLLARS would do for USPS finances right now.


Here is the text from the Office of the Inspector General (OIG) website.

From the OIG website
January 20, 2010

New OIG Study Estimates USPS Has Been Overcharged for the CSRS Pension Fund by $75 Billion

A study just released by the U.S. Postal Service’s Office of Inspector General (OIG) shows that the current system of funding the Postal Service’s Civil Service Retirement System pension responsibility is inequitable and has resulted in the Postal Service overpaying $75 billion to the pension fund.

The OIG estimates that if the overcharge was used to prepay the Postal Service’s health benefits fund, it would fully meet all of the Postal Service’s accrued retiree health care liabilities and eliminate the need for the required annual payments of more than $5 billion. Also, the health benefits fund could immediately start meeting its intended purpose -- paying the annual payment for current retirees, which was $2 billion in 2009.

This marks the third time the Postal Service has been overcharged. In 2002 it was determined the Postal Service would overfund CSRS by $78 billion. Legislation in 2003 corrected this overfunding. Then it was determined the Postal Service was overcharged $27 billion for CSRS military service credits. In 2006 these funds were returned to the Postal Service by Congress, and the surplus was used to fund retiree health care liabilities.

This study, The Postal Service’s Share of CSRS Pension Responsibility, undertaken in conjunction with the Hay Group, is the third paper sponsored by the OIG that delves into the financial entanglements between the Postal Service and the federal government -- generally at the expense of the Postal Service.

The latest study describes the inequitable allocation of CSRS costs between the federal government and the Postal Service. The other two reports focus on the Postal Service’s congressionally-mandated retiree health care prefunding payments (Estimates of Postal Service Liability for Retiree Health Care Benefits), and the Postal Service’s interaction with the federal budget (Federal Budget Treatment of the Postal Service).

Posted by: JAFO1 | March 21, 2010 10:25 AM | Report abuse

The comments to this entry are closed.

 
 
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