Finance

Outgoing postal chief sounds off on Washington’s ‘myopia’

The nation’s top postal official called out practically everyone connected to the mailing industry on Tuesday, accusing lawmakers, unions and the business lobby of impeding efforts to modernize the U.S. Postal Service. 

{mosads}Postmaster General Patrick Donahoe, who is retiring next month, said that four years’ worth of deadlock on postal reform legislation had taught him that outside groups had favored their own narrow interests over the Postal Service’s long-term health.

“What’s holding us up? Myopia. Shortsightedness. That may sound a little harsh, but it would be too easy to say that it’s just congressional gridlock,” Donahoe said at a speech at the National Press Club.

“As much as we try to have an elevated conversation about the future of the organization, we never get beyond the narrow set of interests that are determined to preserve the status quo.”

The postmaster general has for years urged Congress to pass postal reform legislation that would give the agency more flexibility to cut costs and raise revenue. But Donahoe’s comments Tuesday were his most stinging criticism to date of the lawmakers and stakeholders who he believe have hamstrung efforts to shore up an agency that has lost billions of dollars in recent years. The USPS finished fiscal 2014 with a $5.5 billion loss.

Donahoe has been atop the Postal Service at a time when customers are sending fewer letters — first-class mail volume has dropped by more than a third over the last decade — but also as the rise in online shopping has caused a boom in the agency’s package-delivery service. The agency now delivers packages seven days a week in many places, delivers groceries in San Francisco and is experimenting with same-day delivery in New York City.

Those sorts of changes, Donahoe said, raise questions about just what the Postal Service will look like in 20 years. But as the agency has tried to grapple with that problem, Donahoe said that business interests that use the mail, including banks and credit card companies, have focused too much on limiting price increases, even as the lack of broader reform put more pressure on the agency to raise the cost of stamps.

Unions, Donahoe added, have sought to preserve current jobs and benefits, to the point that the Postal Service is missing opportunities to deliver packages more quickly and to partner with retailers like Staples.

Because of that opposition, Donahoe insisted that the Postal Service would have “run off the financial cliff” if the agency hadn’t unilaterally lowered costs elsewhere by consolidating mail processing facilities, limiting hours at post offices and reducing the size of the workforce by more than 200,000.

“The growth opportunities in this organization are in packages and other goods,” Donahoe said.

But Donahoe’s comments also underscored that, as the Postal Service continues its push for legislation, the agency has major disagreements with influential groups on and off Capitol Hill.

The Postal Service, for instance, has pushed to end Saturday delivery of letters, and to get rid of a mandate to fund future retiree healthcare that’s led to more $22 billion in losses the last three years. But Democrats, unions and even some rural Republicans want to keep six-day delivery, with labor groups saying it’s foolish for USPS to try to slash what it offers at a time when it needs new revenues. Unions have also said that Donahoe and top postal brass have consistently overstated the financial challenges facing the agency.

“It’s important to note that all the stakeholders have a constructive plan for the future – except for the departing postmaster general,” Fredric Rolando, the president of the National Association of Letter Carriers, said in response to Donahoe’s speech. “His slash-and-burn approach ignores the facts and would destroy the Postal Service by degrading service to Americans and driving mail and revenue away.”

Top Republicans are also concerned about giving the Postal Service too much relief from the healthcare funding mandate.

Donahoe is currently preparing to hand over the agency’s reins to current Chief Operating Officer Megan Brennan.

On Tuesday, he stressed that Congress and stakeholders could help the agency’s new leadership by giving the USPS more flexibility to act like a business and to be more willing to experiment with new ways of giving workers healthcare or savings plans.

Donahoe praised the Postal Service’s workforce and noted that the agency’s finances have improved in recent years. The Postal Service made a profit of $1.4 billion in 2014 without considering the mandates the agency can’t control, Donahoe said.

On top of that, the postmaster general said legislation that Sen. Tom Carper (D-Del.) and former Sen. Tom Coburn (R-Okla.) released in the last Congress could serve as a template for legislative efforts this year.

In fact, Donahoe was far from ready to give up on the idea of postal reform passing in the current Congress, even as he wasn’t shy in knocking the major players in the debate.

“Both the House and the Senate are looking for some wins,” Donahoe said.

 

Donahoe said that if Congress did pass legislation that he had “no doubt the Postal Service will continue to aggressively adapt to a changing world and a changing marketplace and do so profitably.”

“That would be the best way to meet the expectations of the American public.”

This story was updated at 6:24 p.m.

Tags Tom Carper Tom Coburn
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