Special Message to the Congress Recommending Postal Reorganization and Pay Legislation

To the Congress of the United States:

My message of April 3 outlined the preliminary agreement that the Government reached with its postal employees after the end of the recent postal work stoppage.

In that agreement, the Post Office Department and the postal employee organizations affiliated with the AFL-CIO undertook to negotiate and jointly sponsor a postal reorganization and pay bill to be recommended to the Congress as a measure that could ultimately lead to a cure of the problems that have been festering for years in the postal system.

The negotiations went forward in an atmosphere of good will and good faith on both sides, and they have now culminated in agreement on a legislative proposal that would:

--Convert the Post Office Department into an independent establishment in the Executive Branch of the Government, freed from direct political pressures and endowed with the means of building a truly superior mail service.

--Provide a framework within which postal employees in all parts of the country can bargain collectively with postal management over pay and working conditions.

--Increase the pay of postal employees by 8%, over and above the Government-wide increase of 6%, and shorten the time required to reach the top pay step for most postal jobs. I support the proposed legislation that has been agreed to in the negotiations between the Post Office Department and the postal unions, and in transmitting it to the Congress I urge that it be given prompt and favorable consideration.

The Secretary of Treasury is sending to the Congress shortly the detailed legislative proposals necessary to accelerate the collection of estate and gift taxes which will pay for the 6% government-wide pay raise.

I. The United States Postal Service

The negotiators quickly agreed that the structure of the nation's postal establishment should be one that would permit the postal system to operate on an independent, self-contained basis. This means that for the first time in generations, the Post Office would be run by people whose authority would be commensurate with their responsibilities; it means that the Post Office would carry its own burden and not be a burden to the taxpayer; and it means that the Post Office would serve the public interest of all Americans and not the political interest of any individual or group of individuals.

Fourteen months ago, I pledged that this Administration would do its best to end the system of political patronage that has plagued the Post Office for the better part of the past two centuries. We have kept that promise. Looking to the future, however, I believe that only basic changes in the system can provide permanent insurance against a rebirth of partisan politics in the Post Office.

The proposed legislation that the postal negotiators have agreed upon, and that I now endorse, would build a permanent fire wall between postal affairs and political patronage.

I propose that the Post Office Department be reorganized as an independent establishment known as "The United States Postal Service." The new establishment would be organized in a way designed to make it at least as free from, partisan political pressure as are such presently existing independent establishments as the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission, and the National Aeronautics and Space Administration.

The Postmaster General would no longer be a member of the Cabinet, under this proposal, and the Postal Service would be insulated from direct control by the President, the Bureau of the Budget and the Congress.

Instead of being appointed directly by the President, the Postmaster General would be selected by nine public members of a bipartisan Commission on Postal Costs and Revenues. These nine Commissioners--not more than five of whom could be from the same political party-would serve nine-year statutory terms, under appointment by the President with the advice and consent of the Senate. The postmaster General, who would hold office at the pleasure of the Commissioners, would be vested with full authority to manage the day-to-day operations of the Postal Service.

The legislation would provide the new Postal Service with the means of achieving:

--Continuity of top management, with the tenure of the Postmaster General based on performance and not on politics.

--Appropriate control over postal rates, with a Postal Rate Board holding full and fair hearings on rate changes proposed by the Postmaster General, and with either House of Congress being empowered to veto proposed rate changes by a two-thirds vote.

-A self-supporting postal system.

--A workable method of raising necessary funds by borrowing from the Treasury Department or from the general public.

--Collective bargaining over wages, hours and, in general, all working conditions that are subject to collective bargaining in the private sector

A proposal for massive reorganization of a Government organization as important as the Post Office Department should, obviously, receive careful study before it is adopted. Fortunately, the question of postal reform has been receiving intensive scrutiny, both in Congress and in the country at large, ever since my basic postal reform proposal was sent to the Congress last May. During that time the need for fundamental reform of the postal system has come to be almost universally recognized, and I suggest that further delay in starting on the road toward postal excellence would be indefensible.

II. Postal Employee-Management Relations

The negotiators have agreed that there should be a statutory framework for collective bargaining in the postal establishment resembling that of private industry.

The people of this nation cannot and will not submit to the coercion of strikes by employees of the Federal Government. Since strikes by employees of the new Postal Service must be prohibited, a workable alternative to strikes must be provided-an absolutely impartial means of resolving differences between postal management and postal employees without the public being subjected to interruptions in the postal service. That is what the proposed legislation agreed upon by the postal negotiators provides.

I propose that the new United States Postal Service be empowered to engage in collective bargaining with recognized employee organizations over wages, hours, and working conditions generally, with negotiating impasses being finally resolved, if necessary, by binding arbitration.

Determination of national collective bargaining units, recognition of collective bargaining representatives and adjudication of unfair labor practice charges would be handled by the National Labor Relations Board under procedures similar to those that have long been followed in the private sector.

In addition to wages and hours, matters that are subject to collective bargaining would include such things as grievance procedures, final and binding arbitration of disputes, seniority rights, holidays and vacations, life insurance, medical insurance, training and promotion procedures. Employee benefits enjoyed today would be carried forward, and, in the case of rank and file postal employees, any change in such benefits would be subject to the collective bargaining process.

Negotiations over new labor agreements would be expected to begin ninety days before the expiration of existing agreements. There would be a statutory guarantee of final and binding third party arbitration to resolve negotiating impasses after a ninety day cooling-off period, during which time an outside fact-finding panel would try to assist the parties in reaching agreement. Opportunities for mediation and conciliation would also be provided.

All postal employees would retain their full benefits under the Civil Service retirement system and under the existing Federal workmen's compensation laws. The provisions of the Veterans Preference Act would apply, as would the provisions of Title VI of the Civil Rights Act of 1964. The labor standards provisions to which Government contracts generally are made subject would be applicable to contracts entered into by the new Postal Service to the same extent as elsewhere in the Government.

Finally, the right of every postal employee to petition Congress would be expressly preserved by statute.

III. Postal Pay

In many parts of the country--particularly in our great urban areas--the pay of postal employees has lagged seriously behind the pay received for comparable work by employees in private industry. The general 6% increase has alleviated that problem for most employees of the Federal Government, but it fails to take into account two important considerations that are unique to the Postal Service:

--The need to offset the limited opportunities for job advancement that most postal workers have traditionally faced.

--The need to allow postal workers to share the benefits of the increases in efficiency and productivity that should be attainable under a properly reorganized postal system.

These factors played an important part in the thinking of the postal negotiators during their discussions on the pay question.

I propose an additional pay increase of 8% for postal employees, effective immediately upon enactment of the reorganization law, with prompt collective bargaining over pay schedules under which the time required for rank and file postal employees to reach the top pay step in their respective labor grades would be compressed to not more than eight years.

IV. Postal Rates

As the new Postal Service will be self-contained, so should it be self-supporting; as it will be non-profit, so should it be non-loss.

If the pay increases that the postal negotiators have agreed to recommend are put into effect promptly, and if postal rates were to remain where they are today, postal expenditures would exceed postal income in 1971 by approximately two and one-half billion dollars.

A postal deficit of this magnitude would be indefensible at any time; during a period when inflation is threatening the economic well-being of every American family, such a deficit would be totally irresponsible.

Less than two weeks ago I proposed a plan for raising first, second and third class postage rates to a level that would bring postal income fully into balance with anticipated postal expenditures. This plan included a proposal for increasing the price of the first class stamp to ten cents. Understandably, the proposed increase met with limited enthusiasm, and I am not insensitive to the widespread concern that this proposal evoked. Nevertheless, the need for the additional revenue exists, and the proposal highlighted the true cost to the user of our mail service.

In the course of negotiations, the parties considered an alternative proposal that would provide a transitional rate policy designed to cushion the immediate effect of the application of the principle of pay-as-you-go on the risers of the mail. The alternative approach, to be incorporated in the reorganization bill, would require the general taxpayer to pay 10% of the total cost of the new postal service in the first year. The percentage of taxpayer support would decline each year until the end of 1977, when the mails would be completely self-supporting except for continuing appropriations to reimburse the Postal Service for revenue lost on mail carried for non-profit organizations and other groups entitled by law to use the mail free or at specially reduced rates.

Though the goal would be delayed, acceptance of the principle of a true pay-as-you-go postal service--even in stages--is a fundamental breakthrough.

I would prefer an immediate end to general subsidization by the taxpayer; but since the principles of pay-as-you-go and postal reform are of basic importance, I am ready to accept this gradual but steady approach to that goal.

I would also prefer the method of raising most of the needed new revenues from the business organizations that are the principal users of first class mail. Again, however, I consider the principles of pay-as-you-go and postal reform to be overriding, and I am willing to make adjustments in my original proposals so as to raise more revenues from other classes of mail.

In the interest of making realistic progress toward the objective of bringing postal expenditures into balance with postal revenues, I now propose to

--Increase the price of the first class stamp by one third, from six cents to eight cents.

--Keep the price of the air mail stamp at ten cents.

--Increase the average second class postage rate by one half.

--Increase third class bulk and single piece rates by one third (the same percentage increase as first-class).

These rate increases would generate additional revenues of more than $1.5 billion--enough, with the temporary 10% contribution by the Federal taxpayer, to put the new, independent United States Postal Service on the road to a sound, pay-as-you-go operation.

V. Toward Postal Excellence

Mail users, postal employees and the nation as a whole have gone through a long ordeal in reaching the threshold of basic postal reform---but we have come a long way.

The Congress is now presented with an opportunity to pass legislation that will bring a new measure of fairness to postal employees, a new efficiency to the system itself, and long overdue equity to the taxpayer.

Neither better pay nor better organization will, in and of itself, guarantee better mail service.

Laws do not move the mail, nor do dollars. What moves the mail is people-people who have the will to excel, the will to do their work to the very best of their ability.

The United States is fortunate to have such people in its postal system today. As the Postmaster General has urged, these people must be retained; in the years ahead, more like them must be recruited. This legislation would represent an important step toward that end.

Enactment of the legislation that I now propose would give our postal employees the means to attain a goal they have never before had the means of attaining--the goal of building, in America, the best postal system in the world.

That is a goal worth striving for. With this postal reform legislation, it is a goal that can be achieved. I hope the Congress will lose no time in enacting the laws that are needed to let our postal people get on with the job.

RICHARD NIXON

The White House

April 16, 1970