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New USPS boss faces old problems

David Gura Jan 30, 2015
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New USPS boss faces old problems

David Gura Jan 30, 2015
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The United States Postal Services prides itself on its ability to handle snow and rain and heat – and also “gloom of night,” but it’s had a tougher time with employee pensions and health benefits.

Saturday is Patrick Donahoe’s last day as postmaster general. He has spent his entire career – almost 40 years – with the U.S.P.S., and his successor, Megan Brennan, is likely to push for many of the reforms Donahoe has.

The postmaster general makes about $275,000 a year, but earns it, say people who follow the agency.

“It should come with free therapy sessions,” jokes David Hendel, an attorney with Husch Blackwell, who specializes in Postal Service contracting. “It’s a huge enterprise.  If it was a corporation, it would probably be a top-25 company.”

Bureaucracy may be one of the biggest problems that besets the agency, and presumably the incoming postmaster general knows that. Brennan started out as a letter carrier in Lancaster, Pa.  According to Hendel, the head of the Postal Service has a lot of people to please.

“You have got so many different constituencies, it is just so hard to gather up,” he says. “And couple that with limited powers.”

There are very few decisions you can make without approval, says Gene Del Polito, who heads a trade group called the Association for Postal Commerce. “When you are postmaster general, you really have 535 members of your board of governors – they are all members of the U.S. Congress, and they all think they know your job better than you do.”

In a farewell speech a few weeks ago, Donahue said lawmakers need to find new ways to build consensus. “The narrow interests can’t continue to get in the way of the broader national interest,” he said.

Donahoe singled out retiree healthcare benefits. The Postal Service is required to pre-fund them – something it has not been able to do for years now. And according to Hendel, pensions are a growing problem. “People are living longer and longer lives, and therefore, you can’t really put enough away today for the liability later, or they haven’t,” he says.

On the one hand, there is this expectation the U.S.P.S. should be run like a business, but Rick Geddes, who teaches policy analysis and management at Cornell University, says the postmaster general’s lack of autonomy has kept the organization from being as nimble as it has needed to be.

“We need to have fundamental postal reform at the legislative level that allows the Postal Service to adapt better to the realities of the communications marketplace,” he argues, predicting that will be something the new postmaster general will push for, just as her predecessor had.

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