The outgoing head of the U.S. Postal Service took a parting shot at labor unions and the commercial mailing industry Tuesday for what he called the “shortsightedness and myopia” that have impeded efforts in Congress to modernize the money-losing agency he’s led since 2011.
“What’s holding us up?” Postmaster General Patrick R. Donahoe told reporters at a speech at the National Press Club as he prepares to retire in February after a nearly 40-year postal career. “Myopia. Shortsightedness,” he said, describing the obstacles he hit in a four-year effort on Capitol Hill to secure postal legislation. “That may sound a little harsh, but it would be too easy to say that it’s just Congressional gridlock.”
“As much as we try to have an elevated conversation about the future of the organization,” he said, “we never get beyond the narrow set of interests that are determined to preserve the status quo.”
In a wide-ranging talk on the Postal Service’s financial struggles and potential for a profitable business model in the future, Donahoe, 59, said Congress needs to look at the agency as a business “that is going to be a lot different in the coming years” and take a far broader and longer-term view than it has.
“At some point in time, people have to start thinking about the future,” he said, not hiding his impatience with lawmakers and stakeholders who he said are too focused on their own self-interest. As for what the future of the mail will look like, it will not be “a person putting a piece of mail in a blue mailbox,” he said, but rather a far leaner organization, with a smaller workforce and less generous health care and pension benefits, that competes for e-commerce business, online advertising and other Internet-based services.
Donahoe’s swan song came a day after postal officials enacted cuts that will slow delivery of 14 billion pieces of First Class mail, primarily letters, from overnight delivery to two-day service as the agency shutters dozens of mail-sorting plants. The slowdown in service will increase average mail delivery times from 1.8 days to 2.1 days, postal officials said.
The new standards will not affect packages and Priority Mail, such as medicine and most advertising materials, Donahoe said. He minimized the delays, saying they will affect 2.5 to 4 percent of the mail, “mail that’s going away at the fastest pace.” But union leaders accused him of hiding the truth about what would be widespread delays across the system.
“He’s not telling the truth on delivery standards,” American Postal Workers Union President Mark Dimondstein said in an interview, claiming that it is unrealistic that medicines will be put into a faster delivery stream.
Dimondstein said Donahoe “has been slashing and burning for four years,” and had a “shameful tenure” that caused tens of thousands of unnecessary job losses. “Instead of cutting back hours of service, they should expand hours of service,” he said.
Donahoe is preparing to hand over the reins of the Postal Service to the agency’s chief operating officer, Megan Brennan, who is expected to follow largely in his path.
He rose from mail clerk in his native Pittsburgh to lead the Postal Service during one of its most turbulent periods. The agency reported a $5.5 billion loss for fiscal 2014, another in a string of multibillion-dollar losses. Despite big growth in package deliveries, first-class letters are continuing a downward slide as more Americans correspond and do business online, plummeting 35 percent over a decade.
Donahoe downsized postal operations significantly, reducing the size of the workforce by 212,000 positions through buyouts and attrition, cutting delivery routes and hours at post offices and closing big mail-sorting hubs. He negotiated new contracts with unions that tightened work rules to eliminate costs. He struck a deal to deliver packages for the online retailer Amazon on Sundays and to deliver groceries in some markets, all to offset the decline of first-class mail, once the agency’s profit engine.
He raised the price of stamps and tried but failed to stop Saturday delivery of letters without the approval of Congress, when lawmakers stalled on passing postal legislation.
“If we hadn’t pressed so hard and moved as quickly as we did, especially on the cost side of the equation,” Donahoe said, “I have no doubt we would have run off the financial cliff by now.”
But without legislation to give the agency greater flexibility to cut costs, reduce expensive mandates and let postal officials pursue new lines of business, the USPS will have trouble being profitable. Lawmakers have failed in in the last two Congresses to reach agreement on a plan, in large part because of opposition from unions and mailers.
On Tuesday, Donahoe he took his strongest shot at those interests, which he said cannot continue to resist changes he described as inevitable.
He described business interests that use the mail, from banks and credit card companies to direct-mail advertisers, as excessively focused on limiting price increases –even as the lack of broad legislation from Congress puts more pressure on postal officials to raise mailing prices. And he accused unions of singlemindedly fighting to preserve jobs and benefits with too little flexibility.
“Most young people aren’t looking for a single employer over the course of their careers,” Donahoe said, describing a new generation of American postal workers that enjoys fewer benefits. “In today’s world, does it really make sense to offer the promise of a government pension to a 22-year-old who is just entering the workforce? And how reliable is that promise?”