TRNN breaks down what’s in the bill, what it means to you, and how Democratic Senator Dianne Feinstein’s husband is profiting from the sale of neighborhood post offices
JESSICA DESVARIEUX, TRNN: We’ve all heard the story: the post office is financially bleeding. USP S’s net loss was $5.1 billion in fiscal year 2015, which was its ninth consecutive year of net losses. On Thursday the Senate heard testimony from a list of leading experts on the post office, from union leaders, the post office inspector general, and the postmaster general. They were all there to discuss how Congress can help stop this hemorrhaging. SPEAKER: The legislation we are seeking reflects the results of these discussions and includes the following provisions: requiring Medicare integration for postal retiree health plans. Continuing our exigent price increase for market-dominant products. Calculating all retirement benefit liabilities using postal-specific salary growth and demographic assumptions. And providing some additional product flexibility. By enacting legislation that includes these provisions, the postal service can achieve an estimated $27 billion in combined cost reductions and new revenue over the next five years. DESVARIEUX: Many of these recommendations have not been included in the Senate’s bipartisan bill, called the Improving Postal Operations Service and Transparency Act, otherwise known as IPOST. The USPS doesn’t spend taxpayer money, and would run at a profit but for the Postal Accountability and Enforcement Act of 2006. Under the bill, the post office is required to fund pensions for current retirees, workers, and future employees decades in the future. It’s a provision executive director for the National Post Office Collaborative Jacquelyne McCormick says no other business has to be subjected to. JACQUELYNE MCCORMICK: And what they did is they projected what the cost of the health care benefits would be, you know, 75 years in advance, and accelerated that payment into a ten-year period of time. That’s ridiculous. You’re paying benefits for people you haven’t even hired yet, and you’re paying them, for them within the next ten years. And that doesn’t even make sense. DESVARIEUX: In the IPOST bill, the post office must still pre-pay for benefits, but for 80 percent of those benefits over 40 years. Something McCormick says still does not go far enough to get the post office out of the red. Other main features of the bill include one, a five-year ban on closing post offices, and a two-year ban on closing mail processing facilities. Two, it includes a move away from home delivery to cluster boxes, something that got much protest from Canadian citizens when it was initially proposed in 2013. And now Canada’s post office is suspending all conversions to cluster boxes. Number three, it requires the postal service to use a national broker contract that encourages competition through the use of multiple national real estate companies for the negotiation of leases that the postal service does not negotiate itself. This was a direct response to a scandal that rocked the office of California Democratic Senator Dianne Feinstein. The post office inspector general found that CBRE, a giant real estate company partially owned by Feinstein’s husband, Richard Blum, was costing the U.S. Postal Service millions of dollars a year in lease overpayments. The contracts were exclusive, and the inspector general recommended that they be terminated. Feinstein’s husband’s company is still under contract with USPS, and is said to pocket more than $1 billion in commissions after the sale of 56 buildings. At the hearing, the lack of revenue was another issue. Although parcel-shipping business is on the rise, first mail letter delivery is on the decline. To combat that, some suggested a look at postal banking; an idea that Democratic presidential candidate Bernie Sanders supports. During the first part of the 20th century, post offices provided many financial services. But almost 60 years later, it was phased out under President Lyndon Johnson after the amount of deposits diminished drastically. According to the USPS records, by 1947 the postal savings system had the equivalent of about $36 billion in today’s dollars. But in 1967, it had the equivalent of $3 billion. Higher interest rates from private banks, the passage of the Federal Deposit Insurance Act in 1933 which enabled private banks to guarantee deposits, and the strong bank lobby all contributed to the demise of the postal savings system. And those on the right would like to further that demise. One witness, Jim Millstein, CEO of Millstein and Co, suggested that privatization should be on the table as a solution for long-term stability. In his submitted testimony he wrote, quote: A successful operational and financial restructuring could pave the way to a privatization transaction that could give the USPS access to public debt and equity markets following the precedent set by Poste Italiane and Japan Post. But McCormick says this is a red herring, and putting the post office on the path to privatization is something everyday people cannot afford. MCCORMICK: I think that when we start taking a service that has been guaranteed to us under the Constitution and putting it into private hands, it dilutes the intent that our founding fathers had to ensure a democratic, level playing field for every person who lives here in this United States. DESVARIEUX: The bill currently has bipartisan support, but in an election year it doesn’t look like it will be delivered to the House anytime soon. For the Real News Network, Jessica Desvarieux, Washington.
DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.