Plan to restructure post office a big real estate play and boon to private courier companies
A proposal is currently being considered by the US Postal Service to sell its building in downtown Berkeley, CA and relocate its services. This is just one city that is feeling the impact of a crippling financial crisis currently affecting the Postal Service. In fiscal year 2012 it lost approximately 5.9 billion. And now thousands of buildings may be sold and thousands of workers laid off in what USPS says is an attempt to save itself, but critics argue is a step toward privatization.
Susan Hammers, APWU: The Postal Accountability and Enhancement Act requires prefunding of pensions 75 yrs into the future.
Augustine Ruiz, USPS: This is a huge burden on us and itâ€
Gray Brechin, UC Berkeley faculty/activist: It seems as though it was designed to destroy the postl service.
Postal revenue has taken a drop over the years, but until now the postal service has been able to get by and survive solely from its own revenue, receiving absolutely no US tax dollars, as stipulated by the 1970 Postal Reorganization Act.
However, the pension prefunding is a mandatory requirement, and so in an attempt to address its budget shortfall USPS has begun a program of drastic restructuring. One effort underway is a massive reduction in its workforce. Currently the postal service provides around 550,000 middle-class jobs. But actions proposed by the Postmaster General could cut the workforce down to approximately 300,000, which union representatives say would have a devastating effect not only on workers and their families, but on the overall US economy as well.
In addition to curtailing labor costs, current plans likely include the closing of around 3,700 post offices, although at other times it has been suggested that up to 15,000 locations may be considered for closure, almost half of the 32,000 USPS operates.
But unions and community organizations say it is hardly a solution to the budget problems. They stress this one-time cash injection will never be able to be repeated, so itâ€
Activists argue this is part of an ongoing divestiture of assets that, along with $12 billion of annual outsourcing, is a significant step toward the privatization of the US Postal Service. While USPS denies there is a concerted effort to privatize, privatization does have its strong advocates. Tad DeHaven, for instance, of the Cato Institute, a libertarian think tank, believes in full privatization. DeHaven sees the current measures as merely a band-aid, and the entire government-run model as a failure.
Tad DeHaven, Cato Institute: If we donâ€
Also championing paths toward privatization are UPS and FedEx. Already FedEx is the postal serviceâ€
Like Tad DeHaven, FedEx CEO Frederick W. Smith is also a member of the Cato Institute, and in the past has been on its Board of Directors. In 1999, long before the postal serviceâ€
â€œClosing down the Postal Service,â€ he stated, â€œlike any other government agency that has outlived its usefulness, is an option that ought to be considered seriously.â€
In response to these outright demands for privatization, postal service advocates assert the current crisis is manufactured, not a result solely of a poor business model. The additional measures, they insist, are only further debilitating the postal service and making it less functional, thereby setting itself up for a further loss of revenue.
During this process, some private contractors will do quite well off of the ongoing USPS fiscal crisis. CBRE, for example, is the worldâ€
Brechin: CBRE also arranges the leases, so itâ€
CBRE has played this role before. In October 2009, the firm was contracted by the State of California to sell over $2 billion in office buildings the state wanted to privatize because of its own financial problems. But USPS dismisses any possible conflict of interest CBRE may have in performing its services.
Activists agree the postal service needs to adjust its model if it hopes to succeed. Instead of scaling back, however, they believe a reinvestment in the institution would lead to a revitalization and bring customers and revenue back to the postal service. But their immediate priority is a congressional repeal of the tremendous burden that is the Postal Accountability and Enhancement Act.
Hammers: Congress created this problem, they have to fix it.
Meanwhile, the Downtown Berkeley Post Office, a nationally registered historic landmark, may soon be up for sale. Under the proposal the building would be sold and current services would be relocated to a leased storefront. But the news has not gone over well in Berkeley.
Brechin: People are organizing and protesting. Weâ€
Ruiz: People are passionate about this, but they have to understand our fiscal responsibility.
As activists in Berkeley and elsewhere across the country attempt to alter the current course–whatever motives may be behind it–what is clear is that unless something changes, the likely path will result in drastically less public ownership of assets, thousands fewer unionized employees, and more outsourcing, or in other words a semi-privatized US Postal Service. That is, of course, if it can stay in business.
Reporting from Berkeley, CA, this is David Zlutnick for the Real News Network.