PMG’s Credibility In Doubt Again

(This article appeared in the November-December 2013 edition of The American Postal Worker.)

Greg Bell, Executive Vice President

At Senate hearings in September on proposed postal legislation — legislation the APWU and the three other postal unions oppose — Postmaster General Patrick Donahoe made several statements that once again call his credibility into question. 

At a Sept. 19 hearing, Sen. Tom Coburn (R-OK) said, “It is presently the law that an arbitrator cannot consider the financial health of the Post Office in arbitrating a labor dispute with the Post Office.  Is that correct?”  Donahoe responded, “That is correct.”

Really?!  The fact of the matter is Sen. Coburn’s statement and PMG Donahoe’s response are wrong.  When contract negotiations end in arbitration, arbitrators routinely consider the financial condition of the Postal Service — along with other issues raised by either party.

The exchange between Sen. Coburn and the Postmaster General is important because the bill (S. 1486) sponsored by Sen. Coburn and Sen. Tom Carper (D-DE) includes a provision that would require arbitrators to consider the Postal Service’s financial condition in interest arbitration.

The unions oppose this provision as well as many others in the bill. The reason is simple: By singling out this issue among all the others that arbitrators have to consider, the legislation could lead arbitrators to elevate the Postal Service’s financial condition above all other factors.

The USPS has lobbied to include the requirement in postal legislation.

At a second hearing on Sept. 26, Sen. Jon Tester (D-MT) pointed out that Donahoe’s statement was inaccurate.  Donahoe said, “I misspoke.  I should have said that they can consider it but they’re not required by law not to consider it.”

If this was the first time that Donahoe misspoke in this way his error would be understandable, but it’s not.

PMG: ‘Not Closing’

The Postmaster General also “misspoke” on closures. During the Sept. 19 hearing, Sen. Tester and Sen. Heidi Heitkamp (D-ND) asked Donahoe a series of questions about the closure of post offices and mail processing facilities.  

Sen. Tester asked, “Is there going to be further consolidation of mail processing facilities or post offices while we’re doing this legislation and debate in committee?”

PMG Donahoe said, “No.  The bill would put a two-year freeze on mail processing facilities.  We have some scheduled for 2014.  We would not advance any of those things to try to get under the wire. From a post office perspective, when I visited Montana last year, people told us, ’Keep our offices open, keep our local identity.  If you have to change window time, we understand that but give us access to mail.’  And we’ve done that.”

To make sure he understood what Donahoe was saying, Sen. Tester asked, “So what you’re saying is there wouldn’t be any post office or mail processing centers closed while we’re debating this bill before it becomes law?”

“Nope, we’ve done what we needed to do for this year, and if any further changes require service standard changes we will not do that,” Donahoe said.

In response to a similar question from Sen. Heitkamp, PMG Donahoe said, "There’s no proposal to close any post offices..."

There can be no doubt about what Donahoe said, nor is there any doubt about what he wanted the senators to believe.

But closures are taking place.  At least three post offices closed in the week before his testimony and 11 more are slated to be closed before the end of the year. In addition, the USPS accelerated its published schedule for consolidating mail processing facilities and implemented in 2013 most of the consolidations that were set for 2014. Five more mail processing centers are slated for consolidation before the end of the year.

Healthcare, Retirement

Despite Donahoe’s misstatements, the most troubling aspect of his testimony is his insistence that postal reform legislation must fundamentally alter the healthcare and retirement benefits of postal employees. The PMG wants to remove postal employees and retirees from the Federal Employee Health Benefits Program (FEHBP) and replace FEHBP with a postal-only plan; he also wants to keep new employees out of the Federal Employees Retirement System (FERS).

The proposed legislation would put our federal healthcare and retirement benefits at risk, and smooth the way for these devastating attacks on our benefits to take place by making them subject to contract negotiations and arbitration.

The postal unions adamantly oppose any legislation that would put federal healthcare and retirement benefits at risk.

The testimony at the Sept. 26 hearing shows that there is no justification for the proposals. Jonathan Foley, the director of Planning and Policy Analysis for the Office of Personnel Management (OPM), said, “OPM is concerned that the ability to negotiate retirement benefits, especially whether an employee is covered in FERS, will result in disparate execution of benefits.” 

Regarding healthcare benefits, he said, “OPM has long believed and has previously testified before this Committee that the Postal Service and its employees and retirees are well-served by the FEHB Program.

“Currently, OPM overhead costs for the FEHB Program are only 0.08 percent of total health premiums.  These very low overhead costs have been achieved by managing programs with very large numbers of enrollees and the accumulated experience of the agency and its staff having managed these programs for decades.

“The FEHB Program offers good value to employees and the taxpayer, and is not an excessively costly benefit as compared with other large employer plans.  In addition, annual premium increases for FEHB plans are typically at or below industry averages.”

But Foley also said, “OPM is willing to work with the Postal Service on exploring alternative health options within FEHBP.”

Paving the Way for Privatization

In the final analysis, the Postal Service’s legislative proposals are part of an elaborate effort to change the status of postal workers from federal employees to something closer to private-sector employees.

The intent is to make it easier to privatize the Postal Service, particularly mail processing and transportation.

For the PMG or anyone else to say otherwise simply lacks credibility.