Monday, May 21, 2012

Engineered Austerity Coming to America Starting with the Post Office

Brandon Turbeville
Activist Post
May 19, 2012

Over the past few months, the dismal financial state of the United States Postal Service has been the subject of much derision and contempt in the mainstream media. The massive debt held by the USPS has been the bloody sheet waived by both reactionary Republicans and Wall Street Democrats in order to justify the privatization or even the elimination of such an important service from oversight and administration by the Federal government.

The large debt held by USPS, coupled with exaggerations of wait times and other aspects involved in shipping services, are constantly highlighted as the latest example of how “government is incapable of running anything effectively.” The general public is then subjected to a barrage of “free market” solutions which are, as is almost always the case, nothing more than the fleecing of the taxpayer who will inevitably end up paying more and receiving less while benefiting crony corporations.

The most immediate solutions proposed by the reactionaries are, of course, austerity measures which take the form of closing thousands of rural post office branches, ending Saturday delivery, increasing prices, and downsizing staff.

Initially the plan proposed by the more savvy austerity ghouls, as well as the Postmaster General himself, would have resulted in the closing of more than 3,700 post office locations all across the country, with the vast majority of those offices in rural areas. Thankfully, there was enough community opposition to derail these disastrous plans. That is, at least for the moment.

The new plan, however, now involves the reduction of staff at over 13,000 rural post office locations as well as a reduction in hours of operation down to as little as two hours in some offices. Estimates of potential job losses run over 100,000.

But because the Post Office intends to seek approval for its plans from the public and the relevant regulatory agencies before moving forward on any “cost-cutting” plans, the process may take several months.

Nevertheless, the Post Office is not only facing a battle from without. Many within the administrative and directional wing are lobbying for programs such as the one mentioned above that will result in the closing of offices and an end to Saturday mail delivery. In fact, it has been the Post Office itself that has pushed Congress to pass legislation allowing these cuts to take place.

Yet to lay all the blame, even on the feet of the Postmaster General is not entirely fair. After all, the Post Office has been dealt a bad hand in terms of its financial solvency due to the psychosis of austerity and hatred of public services pushed by reactionary politicians and corporate competitors. It has essentially been given an impossible task in terms of its own continued existence as an institution.

The real financial problems come not from decreased traffic or even mismanagement, but from the reactionaries themselves. Due to the constant barrage of criticism and mockery hurled at USPS from the mainstream media, as well as the gullibility of the average American, little is known about the 2006 mandate which has done more to bankrupt the Post Office than any other factor.

This mandate, a provision of the Postal Accountability and Enhancement Act of 2006, requires the Post Office to fund the health care benefits of future retirees as far out as 75 years into the future – all within a 10-year window. Previously, as in every other business (and the United States Government), the health care of retirees was a pay-as-you-go system. Thanks to the reactionaries and Wall Street tools like Dennis Hastert, this is no longer the case for the Post Office.

Indeed, the ridiculous mandate now costs the Post Office over $5.5 billion per year (about 2 weeks of Afghan war costs), with the federal government actually holding billions of dollars of overpayments made to the pension accounts by USPS. According to FireDogLake, all of the Post Office’s losses over the past four years have come from this mandate.

Even the Washington Post has reported that, without the 2006 mandate, the Post Office would have actually realized a profit, not a loss, since 2007. Joe Davidson writes,
"The last four years’ reported losses can all be attributed to this prefunding and then some,’"Fredric V. Rolando, president of the National Association of Letter Carriers, said in an interview.
He is correct.

According to the USPS white papers, from 2007 to 2010, mail volume declined 20 percent while postage remained capped at the rate of inflation, "resulting in net losses over the period of just over $21 billion, including a loss in FY2010 of $8,5 billion."

During that period, the prefunding of retiree health benefits cost $21 billion. Without that congressional mandate, the USPS would have cleared $611 million.

This is quite interesting considering the fact that the overwhelming majority of the mainstream media never mentions the mandate. We do, however, continually hear the repetition of the debt owed by the Post Office which is almost always used to shore up the claim of incompetence and waste and to promote the cause of privatization.

In addition, the administrators of the Post Office, especially the Postmaster General, have been showing their true colors for some time refusing to acknowledge the root cause of the problem (the mandate). Instead, the agency is claiming that, in the case of rural offices, 80% of its costs are labor-related. It also suggests that the Internet and a decline in first-class mail volume is the reason for its financial straits.

However, this is a misleading and, I would venture, an intentionally misleading position. Labor costs are a factor in any business, particularly in harsh economic times. Yet hiring labor and/or paying them living wages does not outweigh a mandate such as the one discussed above. It is a stated plan by the Post Office administration to begin replacing full-time workers with part-time workers, in an effort to reduce wages and eliminate benefits and this mandate, along with the deleterious effects it is having on the institution as a whole, merely provides the excuse to initiate a downsizing of the workforce.

Indeed, those who have labor contracts are inevitably going to see those contracts attacked in the very near future. Undoubtedly, in another example of the American people’s often misplaced anger, when the time comes for USPS labor to be dismantled, it almost certainly will be done to the cheers of an ignorant public.  That is what the media campaign is for.

It should also be pointed out that, while the Internet may be a factor in reduced first-class mail, the world economic depression is another. Naturally, mail delivery and all other services will decrease as the vast majority of Americans are financially strained and as less and less businesses continue to exist inside the United States.

With all this in mind, it is worth noting that there is rarely, if ever, a comment made by the office of the Postmaster General regarding the 2006 mandate, even though his agency is being crushed by the burden Congress has created.

For all of the heated rhetoric spouted off by politicians and talking heads about the privatization of postal services, it should be pointed out that no other private company bears the burden of having to fund all of its retirees benefits – some of whom do not even work at the Post Office yet, others have not even been born – for a period of 75 years or anything close to that number. Certainly no private company is being forced to do so by the Federal Government.

In all fairness, shouldn’t UPS and FedEx be forced to fund retiree pension funds if there was to be fair competition? The reactionaries would say no, of course, because that is a violation of the “free market.” Only when these theories are applied to government services that actually benefit people are they acceptable.

Even the Federal Government itself, which actually did make a commitment to future generations with the Social Security program, released itself from future liabilities (in terms of trust funds) and converted to pay-as-you-go, a truly unfortunate policy in this instance. Of course, with massive police states to build, giant bureaucracies to maintain, and numerous illegal foreign wars to fight, one can clearly see the logic behind the decision.

Nevertheless, the situation is dire because the Post Office is already $13 billion in debt, largely due to the congressional mandate. Somewhere between August and September, USPS will be required to pay more than $11 billion to the U.S. Treasury yet again for the prefunding of health benefits, potentially (and almost inevitably) causing the agency to reach its $15 billion debt ceiling.

But, while the members of the general public may envision a utopia of companies competing to deliver their mail, the reality will undoubtedly be much different. For all their rhetoric about competition and lower prices, the amount of price increases for the base level of hard copy correspondence will skyrocket as soon as the Post Office ceases to exist. Just take a look at the private competition in the market now and you will easily see how much your mail delivery costs will rise if the Post Office option is no longer available. With USPS out of the picture, it is just as likely that the private companies will not only continue to gouge customers, but that prices will increase dramatically using fuel costs and anti-union sentiment as justification.

Currently, the United States Postal Service stands as a model for the rest of the world in terms of logistical capabilities, infrastructure, and especially pricing. It is, in fact, the cheapest mail shipping method available amongst Western nations and most of the rest of the world.

It is also one of the only services that reaches virtually every American and does so on a daily basis.  Besides the manufactured debt of the USPS, for all intents and purposes, it accomplishes its goals of getting the mail to you in a timely fashion.

It might be hard for many to comprehend the ramifications of the privatization of mail and shipping services currently administered by the USPS. However, one need only look to Europe to see that, invariably, prices will rise. Indeed, one need not look across the ocean when a glance at the domestic landscape would prove the same point. A glimpse of UPS and FedEx should be self-explanatory.

With this in mind, it is also worth noting that price increases will be especially true (and especially harmful) for rural areas where no competition exists.

Rising prices in shipping have long been a problem for businesses, particularly small ones. The removal of the USPS option might even be the death knell for many of them. As it stands, it is possible to put a business virtually anywhere in the country because of the availability of the USPS. However, removing those services will force a great many to move further into cities. Those unable to do so may be driven into extinction.

This plan for reduction of services to rural areas may also dovetail with the intentional increase in urbanization called for by UN plans such as Agenda 21. Removing Post Office services from rural areas would be just one more step in the designed inaccessibility of rural living.

Yet there might be one more aspect to the 2006 mandate that bears mentioning. The fact is, the USPS has many enemies who would like to see the agency destroyed and privatized whether it is indebted or not. Even if the USPS meets its commitments over the next ten years, the attacks are not likely to cease. Corporate predators and other agents of Wall Street have a vested interest in seeing the USPS dissolved due to their own interests. So, unless there is an unlikely return to reason by Congress, the fate of USPS might very well be sealed.

Thus, the 2006 mandate, seems to be a two-pronged attack: First, it is designed to handicap and precipitate the destruction of the USPS through unreasonable demands, debt and then austerity measures.

Second, it serves as a fattening of the prey for the Wall Street jackals who are now surrounding it. Let there be no doubt that a “pre-fund” stacked to the tune of billions of dollars will not be ignored at feeding time. Simply put, Wall Street agents appear to be loading the institution with debt as well as assets, waiting on the moment when large-scale asset stripping can commence.

Thus, one might assume it to be very likely that the attacks against the Post Office will soon resume and the asset stripping of the agency and its employee healthcare fund will not be far behind once the final blow has been struck.

Americans have become complacent on such a wide variety of issues that Post Office service might seem as of little consequence when faced with a worsening economic depression, foreign wars, and the prevalence of a domestic police state. Yet losing the USPS would be yet another nail in the coffin of what was once the envy of the world.

It has often been said that you never know what you have until you lose it. Austerity is coming to America starting with one of the only services that delivers.  If Americans do not soon wise up to the game, we might once again prove just how true that statement really is.

Read other articles by Brandon Turbeville HERE
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Brandon Turbeville is an author out of Mullins, South Carolina. He has a Bachelor's Degree from Francis Marion University and is the author of three books, Codex Alimentarius -- The End of Health Freedom, 7 Real Conspiracies, and Five Sense Solutions and Dispatches From a Dissident. Turbeville has published over one hundred articles dealing with a wide variety of subjects including health, economics, government corruption, and civil liberties. Brandon Turbeville is available for podcast, radio, and TV interviews. Please contact us at activistpost (at)

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