We have yet another “Postal Bailout!” story, this one written for Fortune by James D. Hamilton, a Professor of Economics at the University of California, San Diego. You would think that an article in Fortune, written by an economics professor, would be well-reasoned and insightful. And you would be wrong. Here’s what the good professor has to say about the question of how much money is “actuarially necessary to fund fully the existing pension liability”:

I have not investigated details behind the latter argument. But given both the near-term cash flow problems and the deteriorating long-run fundamentals of this enterprise, my prior expectation would not have been that existing commitments to existing employees have been so adequately overfunded that there is $50 billion free just waiting to allocate to rising health costs as well.

So you don’t actually have to check the facts- if your “prior expectation” is that the USPS’s future retirement obligations couldn’t possibly be overfunded, then it must be true! Case closed.

Professor Hamilton’s analysis fits perfectly with Congressman Ross’s justification for the prefunding requirement, which basically comes down to “because I say so“.

The professor does offer another compelling reason to force the USPS into bankruptcy though- he says he doesn’t get any mail. He apparently is not concerned with the fact that despite the drop in mail volume, Americans still spent $67 billion last year sending the stuff. That’s more revenue than either Apple or Microsoft took in. And that doesn’t take into consideration the million or so people employed by companies that rely on the mail.

But don’t bother the professor with all those useless “facts”- he’s got his “prior expectations” to rely on!

via Next up on the bailout list: The mailman? – The Term Sheet: Fortune’s deals blog Term Sheet.

You can’t make this stuff up- and, thanks to twitter, you don’t have to! Yes, postal “watchdog” Dennis Ross actually tweeted this:

But to be fair to the Congressman, it was late, and he was watching his favorite hockey team, the Tampa Bay Lightning, play the Boston Bruins in a Stanley Cup game (yes, they apparently play ice hockey in Florida- who knew?)- here’s how the “meat suit” denial evolved:

To which “Tommy Chuck”, apparently a Lightning fan himself, responded:

… which drew this from a Ross fan:

Tommychuck defended himself:

… and Dennis’s fangirl was all smilies, if somewhat menacing:

… and that’s where Lady Gaga came in…

All of which led to the words which posterity will forever associate with the legacy of Congressman Dennis Ross:

… but we’ll let Tommy Chcuk have the last word:

And who says simple bloggers can’t provide hard hitting news coverage!

PS- the story has a happy ending, too: the Bruins WON, 6-5!

WASHINGTON, D.C. – In a hearing of the Homeland Security and Governmental Affairs Committee, U.S. Senator Claire McCaskill expressed concerns that many rural Missourians have about proposed cutbacks in the United States Postal Service. McCaskill urged Postmaster General Patrick Donahoe to take into consideration the effect that proposed reforms to institute five-day delivery (with the proposed elimination of Saturdays) and to close hundreds of post offices would have on rural communities that depend on the Postal Service.

"I get it that we’ve got a huge problem here. I get it that money coming in doesn’t match money going out…but I do think it’s important that these rural communities feel like they have an opportunity to weigh in," McCaskill said in today’s hearing.

McCaskill emphasized how important Saturday delivery is to rural communities, especially as it relates to delivery of goods like medicine. Rural communities rely on the postal service for access to news, goods, and services that may not be available through other means.

"I do feel very strongly that if we can save six days, it is very important to the integrity of the product we have which is United States Postal Service, rain, snow, or sleet, it’s going to happen six days a week," she said.

McCaskill also expressed disappointment that a survey done by the Postal Service to garner input from "rural" communities focused on two non-rural communities, one in suburban Atlanta and one in suburban Seattle.

"Would it be possible to take a real look at a rural community, not one that is within commuting distance of a major city. It’s those folks…that Saturday delivery is very important for in terms of their ability to receive mail on Saturdays. Is there a reason why, what I would call a true rural community was not included in the survey?" McCaskill asked.

Postmaster General Donahue pledged to solicit additional input from such communities before any future decision-making.

via McCaskill: Postal Service Remains Vitally Important in Rural Missouri | Claire McCaskill | U.S. Senator for Missouri.

Self proclaimed “Oversight Watchdog” Darell Issa claims to be rooting out waste in the postal service and elsewhere, but that apparently doesn’t mean he has to practice what he preaches:

House Oversight Committee Chairman Darrell Issa, who as the House GOP’s lead watchdog has questioned the legitimacy of some Obama administration travel, jetted to Puerto Rico during the recess on a taxpayer-funded trip that included work and down time with a pal, POLITICO has learned.

The Southern California Republican, accompanied by his wife Kathy and an aide, arrived on the island late Sunday and left on Tuesday. Taxpayers financed the trips by Issa and his aide; Issa, a multimillionaire, paid his wife’s airfare.

via Darrell Issa’s recess included trip to Puerto Rico – Glenn Thrush – POLITICO.com.

The APWU has released totals by state and local for the contract ratification vote. The national membership approved the agreement by a three to one margin, while the majority of members in Massachusetts, Rhode Island and Iowa voted no.

Details of the APWU contract ratification vote are now available, including a local-by-local tally. The results are shown alphabetically by state, with locals in each state listed alphabetically as well.

The local results were provided by the American Arbitration Association, which conducted the balloting under the supervision of a subcommittee of the Rank and File Bargaining Advisory Committee.

Ballots were mailed to 176,611 union members. In addition, ballots were sent to non-members who were invited to vote, provided they completed union sign-up cards that were enclosed in their ratification packets.

The tentative agreement was approved by more than 75 percent of those voting. The final tally was 69,451 to 22,351 in balloting that ended May 10.

More than 50 percent of APWU members participated in the voting. The participation rate represents a substantial increase over previous contracts, including the 2006-2010 contract, in which approximately 40 percent of eligible union members cast ballots.

In an effort to increase participation in the ratification process, APWU President Cliff Guffey announced that the national union would reward locals with the greatest participation of membership involvement. The top three locals in each of several categories will receive compensation to be used on behalf of the members. To be eligible, locals must have achieved a voter participation level of at least 50 percent.

Results of the rewards program will be posted at www.apwu.org soon as they become available.

APWU Contract Ratification Vote by State and Local

WASHINGTON, D.C. – U.S. Senator Daniel K. Akaka, chairman of the Senate Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, spoke at hearing today examining the ongoing financial crisis at the United States Postal Service.

Senator Akaka’s remarks, as prepared for delivery:

“I want to thank Chairman Carper for calling this important hearing today about the future of the United States Postal Service. As we have heard time and again over the last three years, the Postal Service faces a devastating financial outlook.

By the end of this fiscal year, the Postal Service may not be able to fully pay its five billion dollar retiree health benefits prefunding obligation. The Government Accountability Office report released last year examines several options to help the Postal Service.

I commend Senator Carper and Senator Collins, who have both introduced legislation that aims to help the Postal Service meet its obligations by addressing overpayments to the retirement funds. Additionally, Senator Carper’s Postal Operations Sustainment and Transformation (POST) Act offers several provisions which would allow the Postal Service to innovate and expand its business.

However, both of these bills still contain a provision introduced in the last Congress which would bias the collective bargaining process to favor the Postal Service during arbitration.

The fact that the Postal Service and the American Postal Workers Union ratified a new four-year contract last week demonstrates that the Postal Service and employees can work together to reach an agreement that meets everyone’s needs. Congress does not need to inject itself in the collective bargaining process.

I also want to mention the issue of five-day delivery. As I expected, the Postal Regulatory Commission’s estimated savings for cutting a day of service is lower than the Postal Service’s. The Postal Regulatory Commission also points out that Postal Service did not examine thoroughly the impact on rural areas. I am concerned about the impact of cutting service on Hawai’i, which already has slower mail delivery due to its location and challenges moving mail between islands. Ultimately, I do not believe this change would help the Postal Service attract new business or revenue. Instead, it could harm those who rely on the Postal Service.

Again, I want to thank my colleagues for their hard work on these issues, and thank all of our witnesses for their contributions to the conversation. These hearings will help us as we move forward with legislation to finally ensure a long-term fix for the Postal Service.”

The National Association of Letter Carriers issued the following statement in response to the postal reform bill introduced by Senator Tom Carper:

In conjunction with a Senate subcommittee hearing held May 17 on the financial condition of the U.S. Postal Service, Sen. Tom Carper (D-DE) introduced a new version of the Postal Operations Sustainment and Transformation Act.

The POST Act, introduced as Senate bill S. 1010, would fairly resolve the pension and retiree health pre-funding burdens that have crippled the Postal Service’s finances in recent years. It would require the Office of Personnel Management to fairly calculate the postal surpluses in the CSRS and FERS pension plans and allow the USPS to use the recovered funds to pay the heavy cost of pre-funding future retiree health. The bill would also provide greater freedom to use the USPS’s networks to offer new products and services to generate new revenue, including the delivery of beer and wine and the provision of services for state and local governments.

NALC strongly supports the POST Act’s retirement cost provisions and the new commercial freedoms it offers. These provisions would restore the long-term viability of the Postal Service. Unfortunately, the bill is marred by two provisions that we cannot support—the elimination of six-day mail delivery service and the addition of pro-management changes to the law governing collective bargaining disputes. The bill would allow the USPS to unilaterally cut the number of delivery days from six to five—or even to four or three days—without congressional authorization. And it would permanently mandate the consideration of three pro-management instructions to interest arbitrators (with no balancing worker considerations) before issuing an award to resolve contract impasses in the future. We believe that the delivery frequency provision is unwise and that the arbitration changes are both unfair and unnecessary.

The Carper bill’s introduction follows the introduction of a similar bill by Sen. Susan Collins (R-ME), The Postal Service Improvement Act of 2011, or S. 353, earlier this year. The Collins bill includes the core retirement cost reforms in the Carper bill. NALC believes a narrow finance bill that enjoys the broad support of the postal industry and wide bipartisan backing in Congress has the best chance of enactment. We look forward to working with Sens. Carper and Collins in the Senate and with a growing bipartisan group in the House that has endorsed the Lynch bill, H.R. 1351, to ensure the continued provision of universal postal services.

via Latest News | Sen. Carper’s postal reform bill.

National Association of Postmasters of the United States (NAPUS) President told a Senate subcommittee that the US Postal Service should look at trimming its “bloated bureaucracy before it starts closing more post offices :

It is important to note that the Postal Service has shed over 100,000 jobs over the past two years, including Postmaster positions, and there has been virtually no investment in capital. The postal infrastructure and vehicle fleet is deteriorating. Before the Postal Service begins to cut deeper into the bone of its services, the agency needs to prune further its bureaucracy and eliminate its still-bloated administrative overhead, which includes an oversized Area and District Office structure.

Full testimony (pdf file).

In response to a comment posted on his Facebook page, Congressman Dennis Ross says that the US Postal Service hasn’t overpaid any obligations. Ross says the prefunding requirement is appropriate because, well, because Congress said it was appropriate:

The USPS did not "overpay" any bill. It was required to prefund retirement. I will grant that prefunding is rare, but not unheard of. Nor should it be out of the ordinary. Prefunding protects future retirees and is more cost effective in the long run. But in the end, USPS retirement and health benefits have the guarantee of the taxpayer. To NOT prefund is to toss that risk more to the taxpayer. But all the prefunding argument is meaningless if the USPS continues to operate at labor costs of 80% of revenues. 1st class mail is going, going, and will be gone in the future. Either USPS changes its business model (and yes, reduces staffing), or the taxpayers will demand it be privatized or sold. That is reality.

Of course, as several commenters have pointed out, the prefunding requirement is a big chunk of that 80% in labor costs. Last fiscal year, the USPS had $67 billion in revenue- the mandated $5.5 billion future retiree prefunding requirement amounts to 8% of revenue. Conservatives like Ross love to lecture the USPS on how it should be run “like a business”, but I doubt that they can find an example of a successful private business that sets aside 8% of current revenue to overfund future hypothetical retiree health benefits. Congress has, in effect, increased the postal service’s labor costs by ten percent, and now demands that postal workers make up for it in reduced pay and benefits.

The other obvious problem with Ross’s comment is his position that the prefunding is appropriate simply because that’s what the law says. Strangely enough, he doesn’t seem to feel that way about other laws, like the ones that created Medicare and Health Care reform. Why is it OK to repeal Medicare, but PAEA is considered sacred?

via US Representative Dennis Ross.

Paul Vogel, president and chief Marketing/Sales officer, has named Cliff Rucker as acting vice president, Sales, effective May 31.

Rucker is a 28-year veteran of the Postal Service. He has been manager, Operations Support Southwest Area, for more than 5 years.

Rucker also has served as manager of the Houston and Oklahoma districts, and as a PCES Postmaster.

A certified Lean Six Sigma Green Belt, Rucker received the Chief Operating Officer Award in 2010 and has been rewarded three Vice Presidents Awards during his career. He has completed executive training programs at the Wharton School of the University of Pennsylvania and at Columbia University.

via USPS News Link – May 18, 2011.