Justin's Political Corner

Sen. Bernie Sanders proposed legislation today that would break up the big banks and financial institutions that crashed the economy. The ending of too big to fail would also open the door to criminal prosecutions.

Sen. Sanders called ending too big to fail a matter of justice, “We have a situation now where Wall Street banks are not only too big to fail, they are too big to jail. That is unacceptable and that has got to change because America is based on a system of law and justice. In my view, no single financial institution should have holdings so extensive that its failure could send the world economy into crisis. At the very least, no institution, no CEO in America should be above the law. If an institution is too big to fail, it is too big to exist.”

The legislation makes its intended purpose clear, “Notwithstanding any other provision of law, beginning 1 year after the date of enactment of this Act, the Secretary of the Treasury shall break up entities included on the Too Big To Fail List, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout.”

Too big to fail banks and financial institutions, which tanked the economy, are using their size as a defense against criminal prosecution. According to Sen. Sanders, the legislation would give the Treasury Department 90 days to identify commercial banks, investment banks, hedge funds and insurance companies whose failure would have a catastrophic effect on the stability of either the financial system or the United States economy without a government bailout.

This is a matter of both economic security and justice. The six largest financial institutions in the US control 2/3 of the country’s GDP. They hold 2/3 of all credit cards, half of all mortgages, and more than 40% of all bank deposits.

The same people who crashed the economy in 2008 now find themselves richer and bigger than ever. While people who now find themselves in poverty because of the Great Recession are being thrown into jail for missing a payment, the rich have gotten richer.

H/T: Jason Easley at PoliticusUSA

The United States Postal Service is not broke.

It does not need to be downsized. Post offices do not need to be closed. Sorting centers do not need to be shuttered. Saturday service does not need to be scrapped. And hundreds of thousands of jobs in rural regions and urban neighborhoods do not need to be cut in a time of economic instability.

Yet, this week, the US Senate is debating about whether to advance a scheme that would begin a process of downsizing that—while not so immediately draconian as the plan advanced by House Oversight and Government Reform Committee chairman Darrel Issa (R-CA)—accepts the notion that the postal service’s future is one of closures and cuts. Ultimately, that downsizing points the postal in a direction where privatization could be inevitable.

But that does not have to be the case.

National Association of Letter Carriers president Fredric Rolando is right when he says: “Nothing is inevitable about the so-called decline of the U.S. Postal Service.”

What is real, however, is the threat.

Republican leaders in Congress have made proposals for dismembering the US Postal Service by cutting the number of delivery days, shuttering processing centers so that it will take longer for letters to arrive, closing thousands of rural and inner-city post offices and taking additional steps that would dramatically downsize one of the few national programs ordained by the original draft of the US Constitution. That scheme won’t be implemented by this Congress. But a half-step in that direction could be made.

Supposedly “centrist” US Senators Tom Carper (D-DE), Joe Lieberman (I-CT), Susan Collins (R-ME) and Scott Brown (R-MA) have developed a series of proposals they describe as a “bipartisan consensus” for a death by slower cuts.

Their “21st Century Postal Service Act,” the latest variation on a supposed compromise now being weighed by the Senate, would still move the postal service toward the closing of hundreds of mail processing centers, the shuttering of thousands of post offices, delays in mail delivery and a pressuring of consumers toward more expensive private-sector services. It is, says National Association of Letter Carriers President Fredric Rolando, “a classic case of ‘killing the Post-Office in order to save it.’ ”

Republicans, and those Democrats who side with them on this issue, hold that radical surgery is necessary because the postal service is in financial crisis.

Earlier this year, however, we learned that the pre-funding requirements have taken so much money from the USPS that—according to the postal service’s own inspector general—it has “significantly exceeded” the level of reserved money that the federal government or private corporations divert to meet future pension and retiree healthcare demands. “Using ratepayer funds, it has built a war chest of over $326 billion to address its future liabilities,” acknowledges Postal Service Inspector General David C. Williams.

That, US Senator Bernie Sanders argued at the time, put “the rationale for postal cuts in doubt.”

Sanders, who has taken the lead in challenging cuts to the USPS and who requested the assessment by Williams, says that on the basis of information contained in the assessment, the Postal Service should be released from the “onerous and unprecedented burden” of being forced to put $5.5 billion every year into its future retiree health benefits fund. Sanders’s office explains that “even if there are no further contributions from the post office, and if the fund simply collects 3.5 to 4 percent interest every year, that account will be fully funded in twenty-one years.” At the same time, the senator suggests, the postal service should be allowed to recover more than $13 billion in overpayments it has made to a federal retirement systems.

That’s not the end of the debate about the future of the postal service. Along with Senators Patrick Leahy (D-VT) and Mary Landrieu (D-LA), Sanders is working with key Senate Democrats—and, the group hopes, some Republicans who represent rural states—to develop amendments, and potential alternatives, to the “21st Century Postal Service Act.” Not only would they get the accounting right, they would remove barriers to the USPS so that it can compete and grow.

The Senate should embrace it—not the slash-and-burn proposals of Republican leaders, nor the slower slash-and-burn proposals of supposed centrists.

h/t: John Nichols at The Nation

After a stopgap measure last year, Congress will once again debate whether the United States Postal Service as we know it can survive.  The better question is: Will Congress let it?

The U.S. Postal Service is at risk of defaulting on healthcare obligations or exceeding its debt limit by the end of the year. Last month, USPS management unveiled a “Path to Profitability” that would eliminate over a hundred thousand jobs, end Saturday service and loosen overnight delivery guarantees. The Postal Service also proposes to shutter thousands of post offices.  “Under the existing laws, the overall financial situation for the Postal Service is poor,” says CFO Joe Corbett.  Republicans have been more dire, and none more so than Oversight Committee Chairman Darrell Issa, who warned of a “crisis that is bringing USPS to the brink of collapse.”

Listening to Issa, you’d never know that the post office’s immediate crisis is largely of Congress’s own making.  Conservatives aren’t wrong to say that the shift toward electronic mail – what USPS calls “e-diversion” – poses a challenge for the Postal Service’s business model.  (The recent drop-off in mail is also a consequence of the recession-induced drop in advertising.)

ut even so, in the first quarter of this fiscal year, the post office would have made an operational profit, if not for a 75-year healthcare “pre-funding” mandate that applies to no other public or private institution in the United States.

The Postal Service fulfills its mandate without direct government funding.  Faced with right-wing warnings about bailouts, the postal worker union this week is running a new round of TV ads reminding taxpayers that USPS is funded entirely by fees, not taxes.  Guffey says the union — the largest of four representing post office workers — will likely hold rallies on next month’s Tax Day to drive home the same point.

Issa and other Republicans have been insisting for years that to stay solvent, USPS needs to make big cuts. In 2010, Issa told the postmaster general at a congressional hearing that the Postal Service has “more or less a third more people than you need. He  warned in an Op-Ed that “Allowing USPS to postpone billions in obligations just makes a bailout easier.” In a December Op-Ed, Issa compared continuing Saturday mail service to “asking us to revive the Pony Express.”

Sanders is among the backers of the Postal Service Protection Act, whose recommendations are similar to the ones in the senators’ letter. Guffey says the most promising route to an acceptable compromise would be for these recommendations to be incorporated into a tri-partisan bill introduced by Sens. Joe Lieberman, Tom Carper, Susan Collins and Scott Brown.

Among USPS management’s proposed changes are a transformation of workers’ healthcare plans and the elimination of at least 155,000 jobs.  USPS has already eliminated 130,00 full-time equivalent positions in the past three years.  In a union contract signed in May 2011, APWU agreed to concessions in order to preserve its “no-layoff” clause; Guffey says that the Post Office’s projections, designed to make the case for further sacrifices from workers, fail to factor in savings from the concessions they’ve already agreed to.  Union leaders expressed surprise last year when, within three months after signing the new contract with APWU, USPS issued white papers in support of congressional proposals to override those layoff protections.  But Corbett says he believes the reduction can be accomplished through voluntary incentives.

Cutting those jobs would mean further reductions in public sector employment, including among veterans and African-Americans, who for decades have been over-represented in Postal Service ranks.  “It just doesn’t seem like it’s the right time to go after veterans and their employment,” says Guffey. He wants Congress to maintain current delivery standards, which he says would save many post offices from closure.

Cuts have intangible costs as well.  Interviewed for a Washington Postprofile of the endangered post office in Star Tannery, Va., one resident said, “Closing the post office would be one step toward eradicating small-town life in America.”

True to form, President Obama falls between Sanders and Issa: He would scale back the pre-funding requirement and allow postage rates to rise, but would also back the elimination of Saturday service. In an emailed statement, White House spokesperson Matt Lehrich wrote, “The President proposed a balanced plan that would return USPS to financial viability while saving taxpayers money, and Congressional action that enacts this type of balanced plan is necessary.”

h/t: Josh Eidelson at AlterNet