Who owns the Postal Service?

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BY MARK JAMISON

Who owns the post office?  Who is the post office designed to serve?  What is the system’s ultimate function?

These questions are fundamental to the future and the fate of the post office, the postal network, and postal services in this country. How we answer them will have a significant impact on businesses, workers, and communities.

We know the Constitution instructs — or more accurately, permits — Congress to make arrangements for post offices and post roads.  That is a good indication that the Founders saw postal services and the infrastructure that supported them as broadly essential to the nation — nation in their reckoning being the sum of the people.

But Congress has abdicated its responsibilities.  It no longer functions as a deliberative body and has become increasingly ineffective as a legislative body.  The Postal Service's Board of Governors has proven to be equally ineffective and has left postal managers to run operations as they see fit.  The regulatory system is relatively limited and not really able to represent the interests of the public as a whole.

All in all, the Postal Service is simply not accountable to the American people in the way it should be — or the way it must be if it is to survive as a vibrant public postal system, as envisioned by the Founders

In the debates about the Postal Service, the public interest is too often forgotten.  It's worth quoting yet again the stirring words of Title 39:

"The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities. The costs of establishing and maintaining the Postal Service shall not be apportioned to impair the overall value of such service to the people."

If these words are to mean anything, the leaders of the Postal Service, Congress, and the Executive branch must be reminded that the Postal Service is there to serve not some narrow economic interests but the people of the United States. 

 

 

The vision of the Founders

There are only a couple of mentions of the post office in the Federalist Papers, the set of writings by Madison, Hamilton, and Jay which offered the explanation and underlying reasoning that supported the new Constitution.  In Federalist 42, Madison wrote:

“The power of establishing post roads, must in every view be a harmless power; and may perhaps, by judicious management, become productive of great public conveniency. Nothing which tends to facilitate the intercourse between the states can be deemed unworthy of the public care." (emphasis added)

Benjamin Franklin certainly had a great deal to say about the post office.  As one of the inspirational leaders of the new nation and its first Postmaster General, Franklin clearly saw the importance and value of a robust postal system.  Early in his career as a printer and publisher, Franklin was disadvantaged because a competitor, Andrew Bradford, used his power as a postmaster to deny Franklin’s papers access to the postal system — an act that impressed upon Franklin the importance of broad access to the post.  In his biography of Franklin, Walter Isaacson says that the benefit of Franklin’s tenure as colonial postmaster, greater than the compensation he received, “was that it furthered Franklin’s conception of the disparate American colonies as a potentially unified nation with shared interests and needs.”

The Founders clearly recognized that an infrastructure that could serve to bind the nation together was essential not only for the free flow of information but also as a means of enhancing commerce. Washington even argued that newspapers and journals should travel the mails for free, while Madison suggested their cost be subsidized but that as matter of economy there should be a charge.  Whatever the expectations on funding or self-sufficiency, it is clear that the Founders saw a need for a public post, a postal system that belonged to and served the American people broadly.

 

The PRA

The American people built and paid for our postal system. We the people own the United States Postal Service. It’s as simple as that.

Yet beginning with the 1970 Postal Reorganization Act (PRA) and the reorganization of the system into a corporate-like structure, there has been an ongoing attempt by relatively narrow interests to co-opt, control, and ultimately dictate the direction of our postal system.

The PRA coincided with a time in American history when thinking was changing, moving away from the broadly inclusive economics of the New Deal towards a model of unadulterated self-interest that sought to privatize gains while undermining public goods and leaving losses to be socialized.  

Milton Friedman’s dogma of shareholder interest was coming into vogue.  Even though corporations benefit from public systems like the rule of law, which uses the power of the state to enforce contracts, patents, and intellectual property protections, and even though they take advantage of public goods and infrastructure like the postal network or the interstate highway system, their only obligation, according to the Friedman dogma, was to their shareholders.  Communities, the environment, labor — all could be ignored or even damned in the pursuit of private profit and gain. Friedman devalued the idea of public goods and infrastructures, arguing instead that privatization should be the fundamental model.

It was the time of the Powell memo, a brief by future Supreme Court justice Lewis Powell arguing that corporate America needed to actively take control of our political systems and our public dialogue in order to further its interests.  

In the ensuing years we’ve seen our elections devolve into an unending quest for contributions, a system that more and more resembles “pay for play.”  We’ve seen a transition from a market economy to what political philosopher Michael Sandel calls a Market Society, a world where moral choices are squeezed out in favor of an ethic that puts a price on everything and makes everything for sale: consumerism not as a means to raise living standards but as a religion unto itself.

These shifts resulted in the Great Recession, the hollowing out of the American middle-class, and the emptying of broad-based opportunity into a narrow trough that primarily feeds Wall Street.

In 1968, just as this transition was taking shape, LBJ created Kappel Commission to come up with ideas for transforming and reorganizing the Post Office Department.  The commission was staffed largely by businessman and corporate leaders like its chair Fred Kappel, the retired chairman of AT&T.  Following the received wisdom of the time that the words “corporation” and “business” implied efficiency — an idea that went back to Frederick Taylor and his time-and-motion studies, which wrongly conflated process efficiency and the maximization of profit with efficacy and human flourishing — the Kappel Commission set about offering suggestions to reorganize the Post Office Department (POD) more along the lines of a corporation.

Much of what the Kappel Commission recommended became embodied in the Postal Reorganization Act of 1970. The Act transformed the POD into the semi-autonomous United States Postal Service. The Postal Rate Commission became responsible for overseeing the rate-making process as well some customer-service issues. The PRA reorganization also gave general oversight of postal operations to a new Board of Governors.

 

The BOG

The BOG was something akin to a corporate board, although in reality it lacked the accountability a corporate board has to stockholders.  After consultation with leaders of the House and Senate, members of the BOG were appointed by the President and confirmed by the Senate.  They could be removed only for cause. In other words, if they chose a direction for the Postal Service that conflicted with the broad interests of the American public, there was no way to hold them or the management of the Postal Service accountable.

Title 39 describes certain qualifications for members of the BOG in Section 202 (a)(1):

"The Governors shall represent the public interest generally, and shall be chosen solely on the basis of their experience in the field of public service, law or accounting or on their demonstrated ability in managing organizations or corporations (in either the public or private sector) of substantial size; except that at least 4 of the Governors shall be chosen solely on the basis of their demonstrated ability in managing organizations or corporations (in either the public or private sector) that employ at least 50,000 employees. The Governors shall not be representatives of specific interests using the Postal Service, and may be removed only for cause."

While the idea that the BOG was to serve the public interest generally, the public interest was never clearly defined, and the PRA essentially reorganized the Postal Service as a corporate entity.  

Initially the Act provided for some public support of the Postal Service through appropriations to support the universal service obligation and preferential rates for periodicals and non-profits. (Kevin Kosar, formerly of the Congressional Research Service, wrote a couple of reports that are quite useful: here and here.)  But those subsidies were intended to be phased out.  

The PRA and subsequent legislation were designed to transfer the financial support of the postal network from the American people solely to mailers, although it did little to acknowledge the public’s large investment in the system or the fact that the postal network served as infrastructure and therefore had a much wider impact and benefit to the general public. 

Ideally the BOG is supposed to reflect a broad public interest, but it is heavily weighted towards corporate types. For example, a recent past chair of the BOG, Thurgood Marshall Jr., was a well-connected Democratic operative and lawyer who was a founder and board member of Corrections Corporation of America, one of the largest private prison operators.  Is it a coincidence that the latest push towards privatization was sanctioned under Mr. Marshall’s watch?  

If they aren’t corporate, they’re likely to be political insiders.  Other past and current members of the BOG include Dennis Toner, a former board member who was chief assistant to Vice President Biden; Ellen Williams, a current member, who was head of the KY Republican Party; and Mickey Barnett, the most recent chair, who was heavily involved in the New Mexico Republican Party.

The simple fact of the matter is that the BOG has never reflected the larger public interests.  For example, there don’t seem to have been any appointments who had a background in labor. There have been CEOs of large corporations, but there have been virtually no consumer advocates. Several academics have been nominated, but in almost every instance their focus has been on corporate economics and not public goods.

If the current organization of postal administration wasn’t bad enough, the Obama Administration has been absolutely horrible in making appointments to the BOG.  Currently there are only three out of nine appointed members serving, and two of them are in their grace year, meaning they are serving beyond their regular appointed term.  For the last several years, PMG Donahoe was essentially allowed to implement his vision for what postal services should be in this country without any meaningful oversight or accountability from the Board.

One of Mr. Obama’s recent nominations to the BOG was Vicki Kennedy (it's not clear if she is still under consideration).  She might seem like a good choice to some Progressives, but the fact is that Mrs. Kennedy’s resume offers little comfort.  She is a well-connected Democrat who runs a consulting company that services "private clients on the development and execution of public and private strategies for their business needs.”  

Mrs. Kennedy’s selection at least looks good in comparison to the nomination of James C. Miller III, a former governor who has testified before Congress in favor of postal privatization.  Earlier this week, President Obama nominated Miller to term as Governor, along with Stephen Crawford and current board member Mickey Barnett.  (More on the BOG in a future post.)

Even with these new nominations, given the administration’s pace in making nominations and the dilatory pace of the Senate in getting anything done, it isn’t likely we’ll have a full BOG for many months. For now, anyway, PMG Megan Brennan is pretty much the sole determinant of national postal policy.

 

The PRC

In the absence of a strong BOG, some might look to the Postal Regulatory Commission to advocate on behalf of the broader public interest. But the PRC has a fairly narrow purview, which pretty much limits it to oversight to the rate making process, in keeping with its previous incarnation as the Postal Rate Commission.  The PRC does have a function for addressing rate and service complaints on its website, but in many if not most cases these complaints are simply forwarded to the Postal Service for resolution.

The PRC does collect statistics on these complaints, and it issues a monthly report about the complaints that have come through its system. The statute gives the PRC the ability to open a public inquiry if a particular complaint continually arises, but to my knowledge they have never done so.  Over the last several years we have seen continual incidents of the Postal Service bullying people into surrendering house or curb boxes for cluster boxes, and there have been many issues related to declining service standards, post office relocations, post office lease suspensions, and the like.  But the PRC’s ability to confront these issues has been limited.  In fairness, the Commission is largely constrained by both limitations built into the law and its own lack of resources.  There have also been efforts by some in Congress to marginalize the role of the PRC even further, as demonstrated by the Carper-Coburn bill last year, which would have pretty much taken the PRC out of regulating postal rates.

In its rate cases and in the general service “N” cases, the PRC does have a mechanism for providing some protections for the public. Its public representative system assigns a PRC staff member to every case, whether it be rate reviews, N cases, or post office closure appeals.  Former Chairman Ruth Goldway has often touted the public representative system, as she did in this article in Federal Times.

As much as I respect Ms. Goldway, I find her faith in this flawed system misplaced. There’s no clear definition of what the public’s interest is, which leaves it somewhat up to the individual filling the PR position in a particular case to decide what their role will be. Worse, the PRC’s OIG office is all but inactive, which means there is no consistent independent review of the effectiveness of the program.

When the PRC was hearing the appeal on the closing of the Glenoaks post office in Burbank, California, back in 2013, the PR was quoted in the press supporting the closure because the Postal Service was ““hemorrhaging money.”  Rather than defending the community’s interest in keeping their post office, the PR said, “I understand the petitioners are upset, but they have multiple options. They live in a metropolitan area” where there are other nearby locations to do postal business.

In the Friestatt, MO closure case, the PR assigned to the case did a yeoman’s job, but she was undermined by her office, which interfered with the filings from the folks in Friestatt and removed documents without notice.  (Some of these issues were raised in this post suggesting changes to the system.)

Probably the worst failure of the PR system was in the POStPlan docket.  In this important general service case that looked at service reductions in thousands of post offices, the PR put up virtually no defense, and he refused assistance and information that might have helped in better exploring the Postal Service’s proposals.  

To be fair, it should also be noted the POStPlan case was complicated by the fact that both NAPUS and the League of Postmasters chose not to participate as a result of a deal they had made with postal management.  After years of claiming that their greatest concern was for the American public and small town postal services, the two organizations sat on their hands.

The system review at the PRC really relies on concerned participation by outside entities. In the POStPlan docket the PR would have been overwhelmed even if he had been more assiduous in developing the case.

Overall the people who serve as Public Representative make a commendable effort, but they are hamstrung by lack of resources and a clear mandate. The unfortunate fact is that the way the statute constructs and empowers the PRC, it is not the best vehicle for representing the American public generally.

 

The Postal Advisory Council

There was one interesting element of the PRA that gave at least some recognition to the idea that the postal system and network were broadly owned by and designed to service the American public. Section 206 of the original act created a Postal Advisory Council. The PAC was to consist of representatives of labor, representatives of the mailers, and members of the public at large. The PAC would have brought stakeholders directly into the process, and more importantly, provided representation for a broad range of consumer interests, which would have created a counter balance to the BOG.

Sadly, the Postal Advisory Council was never constituted, and no appointments were ever made.  Then in 1975, the Federal Advisory Committee Act (FACA), a law designed to eliminate unnecessary boards and commissions, wrote the PAC out of existence.  In 2008, the APWU sued in an attempt to renew the council, but its effort was dismissed out of hand by the DC District Court.

Given our current political and social environment, it is possible and even likely that the PAC would have been ineffective.  Still, it may have served to bring more voices to the table.  More importantly, it might have been able to focus on the broad public policy and consumer issues that the current leadership of the Postal Service has intentionally ignored in their unrelenting effort to outsource and degrade postal infrastructure. At this point, there are really no mechanisms in place to attend to the broader public interest.

 

The Grand Alliance

So who looks out for the broad public interest in postal matters? The sad fact is that there is no institutional entity that has the statutory power or wherewithal to fill what is perhaps the most essential task in determining how we use and maintain our critical postal infrastructure.

There has been one recent interesting development, however.  The attempts of the APWU and its president Mark Dimondstein to create a grand alliance of consumer and labor groups might have an impact on how we protect, restore, and renew our postal infrastructure.  This alliance is the subject of an excellent article by David Morris on Alternet.

 Morris asks the question: Can One Union Save the Slumping Postal Service? Unfortunately, I think the answer has to be a qualified maybe.

Mr. Dimondstein’s ideas are both brilliant and ambitious, but the fact is that unions have evolved to take care of their members first and foremost. There is nothing wrong with that, of course.  This is a basic responsibility of a union.  Just as capital assembles itself in the form of a corporation in order to benefit its shareholders (at least that is the modern view, one worth disputing), labor assembles to defend and protect its interests. I would argue that in both cases the entities have broader obligations, but in today’s environment of individualism to the exclusion of all else it is difficult to imagine returning to a time when our institutions looked out for the broader societal interests.

Whether the APWU can pull off the sort of broad-based alliance that genuinely attempts to address the broad public interests at stake in the future of postal infrastructure is open to question. I recently participated in a conference call of those interested in postal banking. I was disappointed to hear some of the participants so focused on their own pet issue that they were unable to understand the current problems related to the degradation of the postal network. They seemed to see an opportunity to advance their cause without seeing the broader picture. Some hadn’t done their homework and didn’t seem to understand the regulatory and administrative structures they were going to need to address, instead seeming to believe that it was simply a matter of political will and merely piggy backing their project on a creaking and unresponsive postal management structure.

As I’ve written in previous posts (here and here), as we go forward with trying to find ways to develop and utilize the postal network and postal infrastructure, we need to recognize the flaws in the current organization of the Postal Service.  Simply layering new services on top of a crumbling foundation is a prescription for failure.  Still, I think that Mark Dimondstein is right in the general vision he expresses.

Someone needs to speak out in the interest of the general public on postal issues. Someone needs to be accountable for the investment we, as a nation, have made in postal infrastructure.  

Corporations have come to view the world through the prism of the next quarterly report, and to some extent labor and unions, while fighting a holding action, have come to view the world through the prism of the next contract.  That may have been Cliff Guffey’s greatest failure.  Mr. Dimondstein seems to understand that our future lies in the restoration of an ethic that views common purpose and public goods as a positive good, that sees beyond the next bonus or contract.

 

The general welfare

The state of the Postal Service is an almost perfect reflection of the state of American society. The postal network is an integral part of America’s infrastructure, and like much of that infrastructure, the network is crumbling — partly from a lack of political will but more from a cynical individualism that masks the ascendance of narrow and elite economic interests.

The Founders sought to balance our inherent drive for individual initiative with the need for a larger civic engagement and commitment.  The phrase “general welfare” does not appear in the Constitution accidentally nor is it merely incidental to the construct of American freedom.  A necessitous people are not a free people.  An economy that ignores public goods like infrastructure is a prescription for special interest, limited advantage, and civic isolation.

The postal infrastructure was built by and for the American people.  It remains essential and useful, and it possesses tremendous possibility for the future as a conduit for additional services that both support and maintain legacy systems that millions still rely on.

We must think about renewing and restoring the capacity and capability of the network. It has been undermined and degraded by an empty and self-serving ideology that disdains public goods and common purpose. We have seen the same sort of degradation to our physical infrastructures like roads, bridges, and water and sewer, often in the name of privatization. Our schools are threatened by an increasing corporate encroachment that sees revenue potential not public utility.

After a natural disaster like Hurricane Sandy, we think it perfectly appropriate to do more than clean up, to do more than settle. We talk about rebuilding and restoring, about renewal.

Well, there was nothing natural about the disaster of Hurricane Donahoe, but our response has to be the same as it would be to a natural disaster: Rebuild, Restore, Renew.  The postal network, its capacity, and capability, the standards, the jobs, the infrastructure — they are all in need of our commitment.

In order to do that, we must have a postal management and administrative structure that is accountable to the American people.


Mark Jamison is a retired postmaster.  He can be reached at markijamison01@gmail.com.

(Image source: B. Free Franklin post office in Philadelphia)

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