In a broadcast interview on CNBC’s Squawkbox, Chairman Darell Issa, Ranking Majority Member Elijah Cummings and Representative John Tierney discussed the need for reform legislation in the second session of the 112th Congress. The headline that CNBC reported is Chairman Issa’s claim that the Postal Service has 260,000 too many employees, a claim that I am sure Chairman Issa would have to admit is based on an overstatement of the Postal Service’s current head count. Even if you adjust the employee count reduction to reflect current head counts, Chairman Issa still suggests that the Postal Service needs to cut 174,000 employees.
[A conversation with a member of the House Oversight and Govnerment Reform Committee majority staff clarified Chairman Issa's comment as referring to full time and part-time employees. He stated that the Chairman's comments were based on the Postal Service's statements that its ideal workforce would include around 425,000 full and part-time employees. Therefore the Chairman did mean that the Postal Service needs to cut full and part-time head count by over 200,000. See:Chairman Issa Really Wants the Postal Service to Cut It’s Workforce by 225,000 ] Added 1/25/2012 7:35 am
What Chairman Issa’s head count reduction comes from is the notion that the Postal Service’s losses must come solely from reduction in costs. He acknowledges that the cost reduction would require a reduction in the service quality that the Postal Service now provides, but he does not explicitly link the job losses to the reduction in service quality. The changes in service quality that he says are required include:
- elimination of Saturday delivery;
- elimination of door delivery; and
- reduction in a large number of processing facilities that would require a cut in First Class service standards to work.
Chairman Issa appeared to suggest that Post Office closings may be a lower priority in terms of service cuts primarily because the cost savings is so small.
The interview of Chairman Issa along with ranking Minority member Elijah Cummings also provides some hints about the timing and framework for a postal reform bill that will pass the House of Representatives.
- Both Chairman Issa and Representative Cummings understand the seriousness of the Postal Service’s situation and appear determined to get a bill passed before the Postal Service runs out of cash in September. This does not mean passage of a bill is close, just that they both understand the consequences of having the USPS shut down.
- The seriousness of the Postal Service’s problems will likely put it in front of other issues that the Oversight and Government Reform Committee and probably the House of Representatives could work on.
- Chairman Issa recognizes that to get the bill through the House of Representatives, there will be changes to the bill passed by the Oversight and Government Reform Committee.
- The final bill will likely need to have at least $15 billion in cost savings/revenue enhancements in it. The $15 billion figure comes from Congressman Cummings response to a question about the impact of the 1¢ increase in postage in which he indicates that $15 billion is the target for savings/revenue enhancements. It is not clear of the timing of the cost savings/revenue enhancements, but the tone of the answers suggests that the savings/revenue enhancements will come in the first year or, at most, first two years after passage. The $15 billion in cost savings/revenue enhancements is less than the $18 billion currently included in H.R. 2309.
- Democrats in the House will continue to push the retirement accounting issue.
- To gain passage of the bill, Chairman Issa is likely to give in to most amendments dealing with closing Post Offices. The dollar amount involved is apparently not worth the political fight.
- The final bill may include some language that reduces the power of the current Board of Governors and, possibly, senior Postal Service Management to run the Postal Service after the bill passes. Chairman Issa’s comments about the Postal Service being too slow to act on headcount reductions and network optimization, as well his statement that the Postal Service “refuses to be reorganized and lobbies against its own reforms to correct” generation of annual losses, suggests that he wants the final bill to assure that some heads will roll.
Transcript of Sections of CNBC Squawkbox Interview that Dealt with the Postal Service
Chairman Darrell Issa (R-CA)
So is it likely in the next nine months while we’re dealing with a post office that is literally going bankrupt, that is insolvent but waiting for the final day when cash flow runs out, are we going to have to put that ahead of a lot of things? Yes. There are some areas that our committee has unique jurisdiction on that have to come first. Although the post office isn’t the sexy one you came here to talk about, the idea that an institution since our founding is now financially insolvent, losing money even though it has a mandate not to and refuses to be reorganized and lobbies against its own reforms to correct that, yeah, that’s an area that will probably get pushed to the front while others get, if you will, put behind.
Representative Elijah Cummings (D-MD)
We’ll address the post office. I agree with chairman Issa. That’s a very important issue that we will deal with. We’ll deal with it effectively.
Joe Kerman, CNBC Squawkbox Co-Host
That penny didn’t fix it just yesterday?
Representative Elijah Cummings (D-MD)
Say that again?
Joe Kerman, CNBC Squawkbox Co-Host
That penny didn’t do it?
Becky Quick, CNBC Squawkbox Co-Host
The increase in the postage stamp yesterday.
Representative Elijah Cummings (D-MD)
It doesn’t get you $15 billion. Doesn’t get there.
Joe Kerman, CNBC Squawkbox Co-Host
Is there a number that would do it, that would get us there, a free market number? What would do it?
Chairman Darrell Issa (R-CA)
There is a free market number, as i said.
Joe Kerman, CNBC Squawkbox Co-Host
$1?
Chairman Darrell Issa (R-CA)
They’re losing $14 billion to $15 billion a year. It’s what people want at a price they’re willing to pay. In some cases we’ve restricted what the post office can charge for various classes of mail but the biggest challenge is there are about 660,000 workers at the post office. In the private sector there would be about 400,000 and it’s not a debate about whether we need to get to that mum, it’s how we get there. Do we induce retirement and find a way to trim that workforce, or do we wait for people to retire from an organization that has three full-time employees that are 98 years old, literally. Not a talking point. We have a problem at the post office that it can’t seem to shrink on its own fast enough. As a result the biggest problem is we’re paying people we don’t really need and not doing the reorganizations we should.
Becky Quick, CNBC Squawkbox Co-Host
Are we going to see post offices closed in some smaller towns and are we going to see delivery on Saturday still? That’s what most constituents want to know.
Chairman Darrell Issa (R-CA)
Becky, that’s a good point. The Saturday delivery has been hotly contested. The truth is that when i was born; we delivered seven days a week and twice on Monday through Friday. It was a time in which we really relied on every day having to get mail and businesses had that twice a day because they wanted the morning mail and the afternoon mail and they processed. Today we’re in an internet age in which the mail is for less than it used to be. You can do documentation and contracts; you can buy and sell billion dollar entities over the internet. So, is there a reason for the post office? Absolutely. Do we need six-day delivery? I personally don’t believe so. But in the bill that we moved out of our committee that i believe really needs to move, what we did was we said that’s one of the options. It saves a big chunk of money, $3.3 billion.
I’ll tell you something that is not known by the public widely. if we simply had everybody go to a box at the front of their house, or right at the corner of the street like many people do, actually the majority do, if everybody did that, we’d save $5.5 billion to $6 billion. Just the arcane idea that the postman walks up and sticks it inside a chute of some homes but not the majority of homes that saves more money. That’s one of the transitions along with a modern and more efficient fleet and others that need to happen. But I will tell you that the direct answer to most people. Processing center reform, eliminating some of the 500 processing centers and streamlining those actually saves more money by far than closing post offices themselves.
Representative John Tierney (D-MA)
I might add that one of the things we’re missing totally is the overpayment, overfunding of the pension fund which i notice some people just don’t want to talk about but it’s a serious number. It’s billions of dollars. And I think if we start there, we take the biggest chunk of resolving this issue and move on. There are serious things that have to be resolved and different ideas. But my businesses in my community want delivery of mail on Saturday. A lot of people want delivery of the mail on Saturday. And they also understand this is a service that has great value to the American public yet we don’t pay a dime of taxpayer money. One of the hearings that we had there was testimony from the Postal Service that it was $3 billion a year of value to the American taxpayer yet the taxpayer pays nothing into the postal service. So we should start with the pension over funding and work from there and work around. I think we should take a serious look at reserving the Saturday delivery for our businesses and many of the people who live in the districts.
has anyone looked into DARRELL ISSA and his past ? read his history he”s had anything but what anyone would call a standup american . google his rise to wealth and power. he”s the one who should be let go .
Agreed!!!!
I bet not one Congressman or Representative has ever visited a plant or delivery unit
Please come visit the processing units in your Districts before you make any major decisions and follow the Post man or mail carrier to see what all is involved in getting the mail to you Please visit the V street office which mainly deliveres all of the Government mail to our Congressman on Capital Hill including the President Please visit us before you make any more rash decision about the good employees that process and deliver the mail to our many rural and urban districts and walk a day in our shoe and see what the employees go through on a daily basis Visit the new FSS machines that were bought and paid for by the USPS and what they process on a daily basis Just give us another Vera and incentive buyout and most of your most valualbe employees will gladly retire with dignity and respect
Don’t forget that the purpose of the postal service was to “serve America”. Not to make a profit on the American people. It is a government division not a private company. The prefunding of the retirement is unheard of!!! Mandate that on the rest of the businesses in America and see what happens!! No business would survive!!
Shawn makes this point vey well.
Right on !!! Not to mention go private and see how fast that company stops servicing areas it deems not profitable. They’ll do only what’s profutable and the Government will be left trying to figure out how to serve the rest at a loss.
HEY JOHN- THE TAXPAYER BUYS STAMPS AND PAYS POSTAGE.
Hey earl, you only have to buy a stamp to use the service, if you don’t want to mail a letter you don’t have to pay, but none of the money you pay in taxes supports the post office, actually, the prefunding requirement gives the treasury 5.6 billion a year, check out the facts, please…
Not exactly you pay for a service and at a great price. Mailing a letter would triple or more in the hands of a private company. Why don’t we get rid of all the Federal agancies that only survive on taxpayer money. I didn’t think so.
HEY SEAN – THE TAXPAYER DOESN’T PAY A DIME. THE RATE PAYER (MAILER) DOES. IF THE TAXPAYER DOES NOT USE THE POST OFFICE, THE TAXPAYER DOESN’T GET CHARGED ANYTHING.
Hey Earl, That’s right the taxpayer does buy stamps and pays postage if they are indeed taxpayers. Do taxpayers pay taxes on stamps or postage or even postal products? NO!! Bet you can’t go to the grocery store and buy food or beer without paying taxes. When was the last time we raised you know what about paying taxes at the store or when a loaf of bread went up a dollar overnight? The stamp goes up 1 penny in 2 and a half years and America is having a heart attack. Oh, and that whole internet thing. I love when people say I just email, it’s fast and it’s free. Excuse me, free! This country is full of ignorant people. Most people will tell you that they pay around $50 for good internet service. Email is not free!!
Earl, are you stupid or what. No ones taxes goes to the USPS to run the company.
30 Years of service and a view from the insdie support a view worth hearing.
1.primitive dilvery systems for the last 20 years
2. prefunding brought us to our knees,why ,break the union standard
3. save 3 billion now ,go to 5 day delivery,can’t ,its a election year
4. offer a incentive now,I’ll go age 62 not 66,to many bills between 62 and 66
5. freeze my property taxes and give me a break on my taxes
6. curbside delivery can deliver 25 percent more stops daily,why are we walking door to door
7. large numbers of people have buying power,why don’t we have buying power for insurance life and health.Is there a company that wants all our business and I mean all our business.It takers money to retire also,
8. large processing centers will help but only with our own transportation employees not private companies. We spend billions on private HCR’s
9. Hire all we can at the new rate but make it a career job not a get lost 20 year JOB.MAKE MY SAVINGS WORK FOR ME.Who works nights for 12.00 and likes it, no one
10. More holidays and comp time with pay of you lower the pay scale.
11. The village post office is the future.Every large city has an outlet ,example Walmart and countless others in America. DO IT NOW THE VILLAGE POST OFFCIE CONCEPT IS THE FUTURE.It drives business to the outlet and THE OUT LET SETS UP THE POST OFFICE INSIDE IT.WITH THERE MONEY ,BOX SECTIONS WITH ADDRESS’S AND RETAIL SALES IT DRIVES BUSINESS BOTH WAYS.
12. WHY DO WE PAY COMPANIES MILLIONS TO COUNT OUR MONEY?
13. I am worth my time and experience.Quit promoting the undeserving and ignorant.
14.TRAIN,TRAIN,TRAIN e training is in train our people.
15. There is more but enough said .The buck stops with me but then again no one cares.It is about the money 19 billion a quarter is not enough and it should not be.If your’e not growing your dieing.
this is an unreadable garbled mess. I’m sure you have some good points, but put them in full, coherent sentences and maybe someone will agree.
The mission of what used to be the Postal “Service” is to collect, process and deliver mail to all addresses in the United States with the universal service obligation. By moving away from collecting, processing and delivery, the USPS is systematically being dismantled and privatized, which is obviously the goal.Maybe Darrell Issa should do some research before he goes on national television and spreads disinformation. Where did he get those figures from? Are they based in fact or made up? When did the USPS start “losing” $14-15 billion annually? Also , where is the basis in fact that private industry would only have 400,000 employees. And at last count, there wasn’t 660,000 employees, but roughly 551,000. Being the USPS isn’t funded by taxpayer dollars, but a significant cash cow, especially since the PAEA of 2006 , the pre-funding requirement should be eliminated and the overpayment returned to the USPS.
Well said…
To earl; The taxpayer buys stamps and receives a service in return for that purchase. This purchase of stamps is not a TAX but a purchase of a service. Paying for a service is completely different from just placing the USPS on the federal budget and funding it through tax revenues.
It’s always the cart before the horse..If we go for “Gangbox” delivery; granted you would save
money on Carriers delivering mail but who is going to maintain those boxes? who is going to
collect the keys when customer’s move? Who is going to maintain the maintainence on the boxes? Who is going to shovel out the boxes so the carriers can deliver? These things aren’t taken into consideration when we talk about cost savings. The Post Office would be ultimately
responsible for all of this if they mandated that these boxes would have to be used. A whole other class of worker “Maintainence Worker” would have to be established for this and then you really wouldn’t know how often these boxes would have to be maintained. How fast would the
locks last, how fast would the they have to upkeep the keys with customer’s that move or part of the household moves. Nobody brings up these answers to the above questions because we’ll figure that out when we get there. THE OTHER PROBLEM AS STATED ABOVE IS THAT THE GENERAL PUBLIC KNOWS VERY LITTLE ABOUT THE MONEY THAT IS OWED TO THE POST OFFICE BECAUSE OF OVERFUNDING OF OUR PENSION SYSTEM..WITH ALL THE REPORTS FROM ISSA AND COMPANY, THIS IS ALWAYS SIDESTEPPED AND NEVER MENTIONED.
Yes the post office over funded the pre health tax benwfits. This company is off budget, so the monies paid into the federal gov’t isn’t just sitting there not being used. So that’s why their so much rouble getting the moneies back to pay the employee’s who work hard for no monies. Postal employee’s aren’t compensated for what they do. Instead their working short of employee’s who left with the first buyout year ago when several employe’s left and the postal servic recovered from it. Instead of helping this federal agencey you rather see it go under. So if you put people out of work “Who’s going to pay taxes. Someone did suggest that we do away with congress bsince you only need the people for your own personal gain. The only time we hear from you worthless people when it’s election time. So be very careful about how you vote to eliminate postal job becuse they cast votes also.
you really want to see or hear something interesting. Ask your friendly local congressman/senator how much he/she really feels about the post office and then hit them with an oh yeah, how much did YOU pay in postage to mail out all the stuff that you mailed to your constituents. Oh wait congress and senate do not pay ANYTHING to mail official (even reelection) stuff out. Don’t you wish you could have free postage
Perhaps while they are looking at the over payment of retirement funds, they should look at the salaries of management. They make way more than the craft employees and mostly do “reports” that dont move any mail.
Earl – The sender pays the postage not the taxpayer. Also the reason the Postal Service will lose $14 billion this year is that congress is requiring it to pay $11.1 billion into a trust fund for future heath care premiums. So almost 80% of the loss is directly attributable to congress. Before the postal reform act of 2006 the postal service was making money and had paid off all its debt.
Moving boxes to the curb would save $5-$6 billion.
Eliminating Saturday delivery would save $3-4 billion.
Closing half the plants and eliminating overnight delivery would save $1-2 billion.
So if you were in charge what would you do????
It appears to me that current management is starting with the idea that saves the least money and decreases service the most.
Thanks for this superb post. I agree with views posted. Good justification done.
HEY EARL – your shift or caps lock key appears to be broken or stuck; I would look into that if I were you. Also, by your logic the taxpayer also funds UPS, Fed Ex, Microsoft, Starbucks and Ford (at least for their US profits). We thank you for your insight as well as your well-considered response.
well there shouldnt be anything between the local post office and postal headquarterea, No Poom , no district , no area offices..let the local post office do what they are paid too do..all those layers of management are not needed…like Marvin said if u dont touch the mail you better be looking for another job
Hey Earl- Buying stamps and paying postage aren’t mandatory like taxes. I haven’t mailed a letter or sent a package in over 2 years.
41yrs plus.Ready to go Give me the cash money that can out of my pocket in to civil service reduce my retirement and i am gone without costing you a penny.Done before around 1993 or so.Also how about offering the 15000,00 buyout again i am gone.You will get with both deals on the table a 100000 workers asap.Now 5 day delivery it should be done in one year after you offer the twooptions.Also postage rates should be equal to at laest canadas rates.Some rates over seaeas are a 1.00 to a 1.75.Postal trucks should have advertising on every one.Stations should be open 9.00 am to 5.00pm 6 days a week for now.then if need be 5 day is still needed after you try my plan then so be it.One last though management over paid under work and in my office not qualified.west roxbury ma 02132.
41 yrs.Offer the monies i put in civil ser.and reduce my retirement.Offer the 15000.00 again.Raise rate to at least canada rate.Advertise on every truck in the fleet.All station open 9.00am to 4.00pm 6 days a week.go to 5 day in 2014.but with the three option i have mention i think i will not be needed.Also management
to many not qualified to many 204 b working in management.i have two that shoukd not be in management at my station a 204b and a supervisor that does not own the job ha is in .That an other story.West roxbury ma 02132
41 yrs,Reoffer 15000.00 buy out.Offer the monies that i paid in c s and reduce my retirement.Every truck in the fleet should have advetising on it.All station should be open 9.00 am to 4.00pm 6 days.Reduce staffing accordingly.Management two many 204b and not qualified people in management.I have on each,It is a dog and pony show daily.West Roxbury ma 02132
Someone should do the math and see how much it would cost to Pre-fund the retirements of current and future members of Congress and force them to make cuts to THEIR operating budget.
Please help us FIRE Darrel Issa by helping us elect Democrat Jerry Tetalman of Carlsbad, California to the 49th District of the House of Representatives. He is running against encumbent Darrel Issa, the richest man in Congress. JerryforCongress2012.com. Jerry is very supportive of helping the post office retain all of it’s employees. He is currently seeking their endorsement.
Oh s— give me my dam pink slip once and for all. Here goes the unemploymet line, oh yeah I can do all the transactions on line. Free money from the government, lets see who get my vote, its easy,,,,,,,, the first person to give me free money without working for it,,,,,,,,,,,,,,,,,,,,,thats what these minons want right?
Agreed, Bean! Uncommon sense, want to know a little something we had to dig to find out? When they close all these processing centers and local post offices the mail will travel hundreds of miles further by 18 wheelers…and they admitted that they did not study the additional fuel costs! Is the price of fuel insignificant?
lets take a look how much a Senator or Congressmen get for a pension after serving 2 or 6 years…then we can discuss cutting my pension that will not cover my heating bills and food after they reduce it for having health coverage
That is the best reply i read so far! I agree, Mr. Issa just want’s to privet-ice the USPS, if i was leaving in the 49th District in California! Jerry for Congress 2012 would get my vote.
Darrell Issa is for Darrel Issa. These Republicans, that forced the pre-payment of pensions, down the postal services throat, is an outrage. If not insider political assaination. These guys don’t want the postal service to survive. They want the unions to be crushed, end of story. They want no competition when it comes to elections in this country. If they can destroy one more union, that means no more contributions, by union members. Plan an simple, it’s not about any crisis, its about elections. The Republican party believes if we can’t win by cheating, then will take the vote away from those who might influence election results. But the big mistake they have forgotten about, people will still vote, because that has not yet been taken away by huge corporations, not yet. But if the Republicans can’t rig the game, then they will change the game. Just like they want to do with the postal service. But they haven’t counted on the blown back the american people who count on their mail being delivered everyday. Not once, or twice, or even three times a week. But six days a week, People don’t like change and if Darrell and his boy’s get their way, they will see an uprising when it comes election day. They can fix, the problem, real easy, stop the overpayment of pensions, and they will put the postal service, back in the black. Not cut personal, and distribution centers, or post offices, that people rely on to get their mail. Benjamin Franklin, I’m sure never envisioned, this day would come when he came of with the mail service, back in his day. These congressman should be ashamed, not to mention it’s none of their business. The postal service survives strictily on it’s products and services, not hand out from federal budgets. But as long as guy’s like Issa, think that they can destroy an institution, so one of his cronies, can make a bundle on the redistribution of wealth. Then this country will lose an instituion which has practical been around as long as our country has existed. People should be enraged by any such talk, and should tell their representatives how they feel. Otherwise they will lose that connection with the outside world. Then and only then we will truly be in isolation, from our neighbors.
My partial suggestion for manpower reduction? Max out all CSRS employees. You reduce work force by 125k or thereabouts.Most CSRS employees should have close to 30 yrs in already In addition to normal attrition this should give the P.O. numbers to work with initially. Everyone “wins”. Retirement payment term would be a roll of the dice. Some retirees would live long lives, others not. Payment stops unless they opt for survivors benefits. Either way the payment to them would be over many years. Money from a different pocket. This should suit all the paper pushers as well.
I think we should seriously look at the pensions and perks your government officials get for life.I think the over funding the retirement benefits is insane and is just an open cookie jar for washington.But at the same time there are to many managers at the post office.So they talk about privatizing this would the next step be to privatize the military also?And who would be lobbying for this.Get the government involved and it is all messed up no doubt.The majority of the Postal Service employees are hard working honest and tax paying citizens of this great land.It would be a great injustice to this country to get rid of or privatize this service.Remember no private company is required or will attempt to deliver at any address in the United States.This is the same reason UPS and Fedex use us for deliveries where they won’t go.Perhaps if the government would have allowed the Postal Service to keep its own Planes to fly the mail instead of having to use commercial, Fedex and UPS to fly your first class letters.Many things need change but it needs to start with faces in washington that are for the people and not special interest groups.
You all make great points – USPS doesn’t take a dime of taxpayer money. The same cannot be said for Darrell Issa. I have to support him whether I want to or not. And I have to work to pay his pension, at a much higher salary rate than that of the Postal employees he feels are so extraneous, whether I want to or not. It is very easy to throw nameless people under the bus. The person who invited him to come to a local USPS processing center is right on the money. Meet these people and see what they do all week. Bless you, Rep. Tierney.