Postal Service: Stuck on the Island of Misfit Toys?

Bob Schimek
Posted by Bob Schimek Senior Director of Postal Affairs Tuesday, November 28, 2017 - 22:44

Schimek applies his 26-plus years of mailing industry experience to provide product management and strategic direction for Quadient’s mailing business, formerly known as Satori Software. As Senior Director of Postal Affairs for Quadient, Bob Schimek serves as primary liaison between Quadient and USPS on technical matters affecting the company’s mailing solutions, which include CASS and PAVE certified software, integrated 48-month NCOALink processing and post-sort solutions. 

Customer Experience Update
Postal Service: Stuck on the Island of Misfit Toys?

As the mailing industry heads into what everyone hopes to be a very busy and successful holiday mailing season, it is important to remember that at this same time, we are crossing a pretty concerning milestone.  On December 7, 2017, we hit one full year where all nine USPS® Board of Governors (BOG) seats have remained vacant, and 3 years since the BOG had enough members to hold a legal quorum. Having a fully seated and functioning Postal BOG is critical to help ensure there is proper oversight, direction, accountability and (to the extent that a monopoly can be) ensure the Postal Service is being run like a business.  

While the Postal Service® is considered part of the Federal Government, this holiday season they are probably feeling like they are stuck on the “Island of Misfit Toys”.  In addition to the lack of Postal BOG, other examples that contribute to that feeling include: 

  • Congress mandates that the Postal Service deliver mail 6 days a week, yet provides no funding to support that mandate; the Postal Service does not receive tax dollars and operates on the sale of postage. 
  • The Postal Service is technically “off-budget”, but USPS revenues and expenses remain part of the unified budget which then impacts any postal reform related bills.  This includes the current postal reform bill that would reduce the pre-funding of postal retirement liabilities by requiring Postal retirees to enroll in Medicare.  One of the concerns in Congress is the budget impact that change would have on Medicare, even though postal employees have paid into Medicare their entire career. 
  • The Postal Service is mandated to provide free mailing, which is currently restricted to the blind and for overseas voters.  This would be another unfunded mandate that is covered though the postage paid by mailers.  When Congress implemented the additional restrictions around free mailing, they owed the Postal Service $1.218B in shortfalls in congressional appropriations.   In 1993, Congress agreed to pay the Postal Service $29M per year for 42 years (with no interest) and apparently they can skip those payment without penalty, such as the 3 years from 2012 – 2014 where Congress did not make their payment.  

At this point, even having a single Governor would resolve what will soon become a critical issue. There are certain powers and responsibilities that are reserved exclusively for the BOG. One example is approving price changes.  

You may be wondering if there are currently no BOG, then how is it possible that the Postal Service is implementing a price change that goes into effect on January 21, 2018?  That price change was actually pre-approved over a year ago just before the last BOG term ended.  While the Postal Service had the foresight to get the required approval, they did not get the same needed approval for the 2018 promotions.  This means the only way that any promotions will occur in 2018 is if as least one BOG is confirmed. 

Thankfully, the administration has recently nominated three candidates to serve as BOG for the Postal Service.  The next step is for the candidates to be properly vetted and hopefully approved by the Senate.  This approval could occur fairly quickly (possibly before Congress recesses for the year), or it could drag out for several years.  The previous administration had nominated five candidates for the Postal BOG, but Bernie Sanders put a hold on the nominations and they were never brought to the full Senate for a vote.  Any senator could do the same for the three candidates that have been nominated. 

How this is going to ultimately play out is unknown, but as a former well known Speaker of the House used to say “all politics is local”, so if you are reading this article, you are strongly encouraged to work with your company and contact the Senators for your state and let them know the importance of Postal Service within the mailing industry and the need to get these BOG candidates confirmed as quickly as possible.   While it won’t yet be enough to hold a legal quorum, having three of the nine positions filled would be a great holiday present for both the mailing industry and the Postal Service.