Costin saw post office pain coming

The U.S. Postal Service announced Wednesday it will stop delivering mail on Saturdays, which former Lynn District Postmaster Thomas Costin called a very sad day.”I think people look forward to getting mail six days a week,” he said from his home in Nahant. “I think people in smaller communities, more sparsely populated parts of the country will feel the effect more than in the larger cities.”The financially struggling Postal Service said it will continue to deliver packages six days a week, which some are calling an end-run around an unaccommodating Congress, which has repeatedly banned the idea of five-day mail service. The USPS is an independent agency and gets no tax dollars for its day-to-day operations but remains subject to congressional control.Cutbacks are expected to begin the week of Aug. 5 and are slated to save approximately $2 billion annually, according to Postmaster General and CEO Patrick R. Donahoe, who explained, “Our financial condition is urgent.”Costin, who was appointed postmaster in 1961 by his friend and President John F. Kennedy, and held the post for 30 years, said the Postal Service could have saved itself a lot of trouble and cash if it had stuck to its guns 30 years ago.In 1969, ’70 & ’71 Costin testified before Congress in a push for postal reorganization. Under Congress’ budget, the Post Office couldn’t keep up financially with modernization, he said. Funding new vehicles and burgeoning technology was beyond the Postal Service budget so Congress agreed to fund pensions for anyone who retired prior to the day of the re-organization.”From the day re-organization passed, the Post Office would pick up the cost,” Costin explained.In the two years of the re-organization the Postal Service made $1 billion each year, Costin said. In the third year Congress, seeing the postal windfall, changed the law so it wouldn’t have to fund any pensions, Costin said.He said he called the Postmaster General at the time, “I said he was making a horrible mistake and it would bite the Postal Service in the rear end in the future and that’s exactly what happened.”Costin said if Congress had just gone along with the original reorganization plan the Postal Service would have built up enough of a cushion where it could have operated at a profit today, “but they didn’t do that.”It seems he wasn’t far off the mark. The agency’s biggest problem – and the majority of the red ink in 2012 – is reportedly not due to reduced mail flow but rather to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion, lower than the previous year.In 2006 Congress voted to require the post office to set aside $55 billion in an account to cover future medical costs for retirees. The idea was to put $5.5 billion a year into the account for 10 years. But it’s money the post office doesn’t have.No other government agency is required to make such a payment for future medical benefits. Postal authorities wanted Congress to address the issue last year, but lawmakers finished their session without getting it done. So officials are moving ahead to accelerate their own plan for cost-cutting.Donahoe said the change would mean a combination of employee re-assignment and attrition, and is expected to achieve cost savings of approximately $2 billion annually when fully implemented.Costin isn’t the only one concerned with a plan that would still provide access to post office boxes on Saturdays, just nix home delivery.The president of the National Association of Letter Carriers, Fredric Rolando, said the end of Saturday mail delivery is “a disastrous idea that would have a profoundly negative effect on the Postal Service and on millions of customers,” particularly businesses, rural communities, the elderly, the disabled and others who depend on Saturday delivery for commerce and communication.Costin pointed to