Performance Matters
By Bob Levi
NAPS Director of Legislative & Political Affairs
In my previous column, the congressional summertime postal snowball took center stage. It was a political spectacle that generated sizable momentum in support of robust Postal Service oversight. That positive drive has not diminished; rather, it has spawned House and Senate efforts to advance performance-enhancing legislation employing a more potent Postal Regulatory Commission (PRC).
Senate Homeland Security and Governmental Affairs Chairman Gary Peters (D-MI) was joined by committee colleague Sen. Jacky Rosen (D-NV) and Appropriations Committee ranking Republican Sen. Susan Collins (R-ME) in introducing S. 4675, the U.S. Postal Service Stop and Study Act. The bill would stop the Postal Service from implementing any permanent network changes without first seeking a PRC advisory opinion, grant the PRC the authority to review and make recommendations regarding operational changes already implemented and permit the PRC to stall future network changes should the PRC view the changes as detrimental to the quality of mail service. As this column went to press, the measure was listed among the bills awaiting committee action at its September meeting.
Unfortunately, American confidence in its Postal Service, as an institution, continued its downward spiral. In early August, the respected Pew Research Center reported the USPS’ approval rating fell five points to 7%, as compared to 2023. In 2019, the Postal Service earned a 90% approval rating. Notwithstanding this sad decline, the agency still ranked 2nd among federal agencies, four points behind the National Park Service and five points ahead of NASA.
In addition, on Sept. 11, the National Association of Secretaries of State and the National Association of State Election Directors sent a letter to the PMG raising serious concerns about the USPS’ performance capability in conveying election ballots for the 2024 election. This letter was shared with, among others, the Postal Service Board of Governors and members of Congress.
It is clear postal-allied members of the House and Senate strongly believe, as do economists and the American public, that performance matters. Diminished on-time performance and limited postal accessibility depress mail and parcel volume. The mutual relationship between declining performance and falling volume can be referred to as “performance elasticity.”
Therefore, with 21st-century wisdom and apologies to noted 19th-century British scientist Thomas Huxley, it can be declared: The greatest calamity of the network changes proposed by the Postal Service’s executive leadership is the slaying of its “beautiful” premise by very ugly facts. Within the text of legislation and the content of hearings, Congress—and now state election officials—have called out postal leadership for ignoring these ugly facts—deteriorating, nationwide on-time performance, failing rural mail service, lack of transparency and continued financial instability.
It appears these ugly facts have forced the Postal Service to reimagine and slow its implementation strategy. Considering congressional angst and the vote-by-mail component of the upcoming general election, the Postal Service is taking belated notes.
Besides legislation, members of Congress, particularly those in the Senate, have expressed deep reservations about and objections to the ongoing consolidations and realignments. This was obvious during the late-July Senate Homeland Security and Governmental Affairs confirmation hearings of Ann Fisher and Ashley Poling who President Biden renominated to the PRC. Most of the comments and questioning by both Democrats and Republicans involved strengthening the PRC’s authority to equip it with the necessary tools to make the Postal Service more accountable for its performance.
In reaction to congressional, regulatory and public pressure, it appears the USPS is rethinking its “Delivering for America” (DFA) plan strategy. For example, in response to withering criticism by Nevada’s congressional delegation led by Rosen, the USPS has modified its plans to move Reno mail processing to Sacramento. Outgoing letter mail processing will now remain in Reno.
It also has been observed that, at times, it appears the USPS is playing the carnival game Whac-A-Mole. When a DFA-caused operational issue raises its ugly head, postal leadership sends a Headquarters crew to whack it down, only to find the dreadful head emerges somewhere else in the network; so it goes. Consequently, despite the appearance of addressing some operational concerns, Congress and the PRC remain vigilant.
After protracted resistance and opposition to asking for a PRC “advisory opinion” on certain aspects of the DFA, postal leadership, under relentless congressional pressure and stakeholder criticism, relented, commencing the process by scheduling a Sept. 5 “pre-filing” technical conference. At that time, postal executives made their pitch to interested parties; those parties questioned selected USPS Headquarters staff regarding the proposal. The PRC opinion request has been designated N2024-1.
As this issue went to press, the USPS had yet to file the formal documents. Once filed, interested parties may cross-examine Postal Service staff about the proposal, file comments about the DFA and reply to USPS responses to those comments. Based on the hearing record, the PRC will provide its advisory opinion, which is just advisory. Under current law, the PRC cannot force the USPS to follow its advice. Nevertheless, Congress still has the ability to weigh in.
The Senate committee will have another opportunity to air its postal grievances at an expected fall confirmation hearing of four USPS Board of Governor nominees: former U.S. Labor Secretary Marty Walsh, former USPS Governor William Zollars, former Rep. Val Demings (D-FL) and former Director of the Pension Benefits Guaranty Board Gordon Hartogensis. President Biden nominated Walsh this past spring, Zollars and Demings in late July and Hartogensis on Sept. 9.
Hartogensis would replace current BOG Chairman Ramon Martinez, whose term expires Dec. 8, 2024. With this most recent nomination, Biden will have nominated four governors in 2024. If all four are confirmed, the board would comprise four Democrats (Ronald Stroman, Daniel Tangherlini, Martin Walsh and Demings), four Republicans (Robert Duncan, Derek Kan, William Zollars and Gordon Hartogenis) and one Independent (Amber McReynolds).
Hartogenis served as director of the Pension Benefit Guaranty Corporation (PBGC) from 2019-2024. His five-year term expired in April. The PBGC is a federally chartered corporation created to encourage continuing and maintaining voluntary, private, defined benefit pension plans, provide timely and uninterrupted payment of pension benefits and keep pension insurance premiums at the lowest level necessary to carry out its operations.
Hartogensis is married to Grace Chao, sister of former Labor Secretary Elaine Chao, and brother inlaw of Senate Republican Leader Mitch McConnell.
It will be a particularly interesting hearing given the anticipated exchanges between committee members and Zollars, as he was a USPS governor at the time the board greenlighted the DFA in 2021. It is hoped the Senate will act on all USPS presidential nominees, both for the PRC and the Board of Governors, by the end of September. Otherwise, the nominees can be subjected to the uncertainty of a post-election, lame-duck session of the Senate.
At the recent national convention, NAPS delegates approved, by voice vote, a resolution urging Congress to enact legislation that would amend the law restricting Postal Service Retirement Trust Fund investments to low-yield U.S. Treasury securities. Legislation introduced in the previous Congress would have permitted investments in diverse securities—such financial instruments as a fund replicating a Thrift Savings Plan long-term L-Fund.
At a July Senate committee meeting, Peters indicated he would be introducing such a bill. In 2023, the USPS Office of Inspector General projected that, had the USPS been able to invest its retirement funds in 60% stocks and 40% bonds, the fund would have earned a surplus of $782 billion in fiscal year 2022, rather than run a $119 billion deficit.
Finally, in late August, Reps. Garrett Graves (R-LA) and Abigail Spanberger (D-VA), primary sponsors of H.R. 82, the Social Security Fairness Act, announced they would file a “discharge petition” when Congress returned from its August recess. If there are 218 signatures on the petition, it could force the House to hold a vote on H.R. 82. Before Labor Day, H.R. 82 had the support of 325 cosponsors.
The bill would repeal the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP). Generally, the GPO and the WEP reduce Social Security benefits for many federal, state and local government workers who worked both in the private sector and as a government employee where Social Security was not part of their retirement income, such as the Civil Service Retirement System.
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