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238 [Postal Strike] [I] [1 of 3]
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238 [Postal Strike] [I] [1 of 3]
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White House Staff Member and Office Files (Nixon Administration)
John D. Ehrlichman's Files
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DOCUMENT WITHDRAWAL RECORD [NIXON PROJECT]
DOCUMENT
DOCUMENT
SUBJECT/TITLE OR CORRESPONDENTS
DATE
RESTRICTION
NUMBER
TYPE
N-1
Memo
Charles W. Colson to Ehrlichman Re:
4/6/70
C (Nixon)
Postal pay /reform
N-2
Notes
Handwritten notes headed "signif of this
n.d.
C(Nixon)
event"
(10pages total)
N-3
Notes
Typed notes "Base position for Negotiations"
n.d.
C(Nixon)
w/ attached handwritten draft notes,
also entilled "Base Position for
Negotiations".
N-4
Notes
Handwritten notes beginning "8:00 a.m. ph
3/31/70
C(Nixon)
PM6 Blount" (1 pages total)
N-2 them N-4 meintegrated from
Contested Tily on December 19, 2006
FILE GROUP TITLE
BOX NUMBER
WHSF: Ehrlichman
33
FOLDER TITLE
Numerical subject File
238 [postal Strike I of 31
RESTRICTION CODES
A. Release would violate a Federal statute or Agency Policy.
E. Release would disclose trade secrets or confidential commercial or
B. National security classified information.
financial information.
C. Pending or approved claim that release would violate an individual's
F. Release would disclose investigatory information compiled for law
rights.
enforcement purposes.
D. Release would constitute a clearly unwarranted invasion of privacy
G. Withdrawn and return private and personal material.
or a libel of a living person.
H. Withdrawn and returned non-historical material.
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
NA FORM 1421 (4-85)
Reproduced at the Richard Nixon Presidential Library and Museum.
DOCUMENT WITHDRAWAL RECORD [NIXON PROJECT]
DOCUMENT
DOCUMENT
SUBJECT/TITLE OR CORRESPONDENTS
DATE
RESTRICTION
NUMBER
TYPE
N-1
Memo
Charles W. Celson to Ehrlichman Re:
4/6/70
C (Nixon)
[81]
Postal pay /reform
open 6/8/2009
N-2
Notes
Handwritten notes headed "signif. of this
n.d.
C(Nixon)
[82]+[83]
event"
(10pages total)
N-3
Notes
Typed notes "Base position for Negotiations"
n.d.
C(Nixon)
[84]
w/ attached handwritten draft notes,
also entitled "Base Position for
Negotiations"
N-4
Notes
Handwritten notes beginning "8:00 a.m. ph
3/31/70
C(Nixon)
[85]
PM6 Blount" (7 pages total)
FILE GROUP TITLE
BOX NUMBER
WHSF: Ehrlichman
33
FOLDER TITLE
Numerical Subject File
238 [Postal Strike 1 of 31
RESTRICTION CODES
A. Release would violate a Federal statute or Agency Policy.
E. Release would disclose trade secrets or confidential commercial or
B. National security classified information.
financial information.
C. Pending or approved claim that release would violate an individual's
F. Release would disclose investigatory information compiled for law
rights.
enforcement purposes.
D. Release would constitute a clearly unwarranted invasion of privacy
G. Withdrawn and return private and personal material.
or a libel of a living person.
H. Withdrawn and returned non-historical material.
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
NA FORM 1421 (4-85)
Reproduced at the Richard Nixon Presidential Library and Museum.
Presidential Materials Review Board
Review on Contested Documents
Collection:
John D. Ehrlichman
Box Number:
33
Folder:
238 [Postal Strike 1 of 3]
Document
Disposition
81
Retain Close Invasion of Privacy open 6/8/200 9
82
Retain
Open
83
Retain
Open
84
Retain
Open
85
Retain
Open
Reproduced at the Richard Nixon Presidential Library and Museum.
FILE NO. 238
No. of
No. of
Date of
entry
pages
entry
Material entered
27
2
3/31/70
HRH transmittal of Buchanan statement on the
strike situation Mar 27
28
2
3/31/70
Mar 26 Dex to Key Biscayne re Cahsn report
from David Nelson re Senate decision on HR
13000
Reproduced at the Richard Nixon Presidential Library and Museum.
FILE NO. 238
Postal Strike
No. of
No. of
Date of
entry
pages
entry
Material entered
1
2
3/27/70
March 20 Hampton memo to JDE re Work
Stoppages by Postal Employees
2
1
3/26/70
March 20 Rummel memo to Rosen re cities
with postal workers out
3
1
3/26/70
JDE notes
4
1
3/26/70
Highlights of Rademacher's comments at 12:30
news conference
5
4
3/26/7-
Rehnquist memo to JDE re E.O. and Proclam
ation for use of troops
6
2
3/26/70
Timmons memo to JDE re list of invitees to
WH for briefing on potal strike situation
7
2
3/26/70
March 22 memo from a confidential source in
the NYPD
8
many
3/26/70
Ben Holman (Justice) memo to Robert Brown 1
minority community reaction to postal strike
9
2
3/26/70
Declaring a National Emergency - Proclamatio
10
2
3/26/7 0
E.O. Calling into service members and units
of the National Guard
11
2
3/26/70
JDE Notes
12
many
3/26/70
Notes of JDE, Blount, Klassen, Shultz, Z, H
meeting on March 23 re strike
13
notebook
3/26/70
OPeration Graphic Hand (Secret)
14
many
3/27/70
Blount memo for Laird re request for troops
to safeguard process and deliver mail
15
1
3/27/70
Laird memo to Resor: request for assistance
from the PODept.
16
2
3/27/70
Cole memo for Pres re comments to make at
meeting with Gen. Presidents Building Trades
Unions AFL-CIO
17
3
3/27/70
George Meany March 23 statement
18
3
3/27/70
Nelson memo to JDE re preliminary injunctio
against Branch 36 NALC in Ch9cago
19
1
3/27/70
Timmons memo to JDE re Postal Pay Bill
HR13000 to be run through after Easter
20
many
3/27/70
information re pay hikes and legislation on
pay hikes and postal reform + JDE notes
21
2
3/27/70
Colson memo to Klein re press on issue
of strike
22
2
3/27/70
Resor memo to U/Sec of Army re delegation
of authority in use of troops for strike
23
1
3/27/70
Chotiner memo to JDE re strike: suggestions
ny John Cosgrove of Nat'l Press Club
24
2
3/27/70
Colson memo to JDE re strike strategy 3/24
25
2
3/27/70
Colson memo to JDE re Rademacher/ postal
strike
26
2/
3/27/70
Colson memo to the file re Rademacher
Reproduced at the Richard Nixon Presidential Library and Museum.
238
THE WHITE HOUSE
WASHINGTON
MEMORANDUM FOR
THE PRESIDENT
SUBJECT:
Private Meeting in the Oval Office for
Photos and Very Brief Discussion of the
Postal Reorganization Agreement
April 16, 1970, Thursday
10:45 a. m.
I. PARTICIPANTS:
Postmaster General Blount; Deputy Postmaster General Ted Klassen;
Senator Hiram Fong; Senator Gale McGee; and George Meany, President,
AFL-CIO.
II. PURPOSE:
(1) To allow the Postmaster General and Mr. Meany to report
to you that as a result of the collective bargaining sessions, an
agreement on postal reorganization has been achieved. (It is hoped
that the presence of Senators McGee and Fong, at this time, will
have a positive effect on establishing their support).
(2) A. photo opportunity with the individuals present.
III. TALKING POINTS:
Postmaster General Blount, Ted Klassen, and George Meany
should be congratulated on the excellent job they have done in reaching
this agreement between the AFL-CIO and Post Office management. You
should emphasize that you are now prepared to accept the agreement
and strongly recommend that the legislation be passed by Congress as
soon as possible.
Senators McGee and Fong should be congratulated on the excellent
way in which they handled and moved through Congress the 6% pay raise
which you signed yesterday.
Reproduced at the Richard Nixon Presidential Library and Museum.
Page 2
Senator McGee is supposedly greatly concerned with how the
Post Office can best serve the public. In this regard, it should
be pointed out that the agreement which has been reached and
which if passed by Congress will provide by far the best possible
service and benefits to the general public.
NOTE: (Congressmen Dulski and Corbett will be brought in
approximately two minutes before 11:00 for a brief photo
opportunity for the principal purpose of giving them
independent recognition and soliciting continued support).
John KR Coletetn Ehrlichman
Reproduced at the Richard Nixon Presidential Library and Museum.
THE WHITE HOUSE
WASHINGTON
April 15, 1970
MEMORANDUM FOR THE STAFF SECRETARY
From: William E. Timmons
BC
On the Postmaster General's request we are adding
three guests to the 11:00 a.m. meeting on postal
reorganization in the Cabinet Room, Thursday,
April 16.
They are:
1. Mr. Lane Kirkland
Secretary-Treasurer, AFL-CIO
2. Mr. Tom Harris
General Counsel, AFL-CIO
3. Mr. David Nelson
General Counsel, Post Office Department
CC: John Ehrlichman
Dwight Chapin
Henry Cashen
Ron Ziegler
White House Police
Chief Usher
Reproduced at the Richard Nixon Presidential Library and Museum.
'DHN EHRUCHMAN
the WHITE HOUSE
WASHINGTON
April 15, 1970
MEMORANDUM FOR THE PRESIDENT
From:
William E. Timmons
BT
Subject:
Postal Reorganization Briefing
Thursday, April 16, 1970
11:00 a.m.
The Cabinet Room
A list of participants is in Tab A.
A suggested agenda is in Tab B.
The principal features of the postal reorganization
agreement are in Tab C.
It is recommended that the Postmaster General escort
the four Post Office Committee leaders, Senators McGee
and Fong, Representatives Dulski and Corbett, with
George Meany into the President's Office at 11:00 a.m.
for "special" recognition and photographs by the White
House photographers.
You may then wish to lead the group into the Cabinet
Room where some of the bipartisan leaders and officers
of the postal unions will be assembled.
Ron Ziegler will be prepared to bring into the Cabinet
Room photographers from the White House press corps.
You will probably want to congratulate the labor officials
and members of the Executive Branch on achieving the
postal reorganization agreement.
Reproduced at the Richard Nixon Presidential Library and Museum.
- -2-
The Postmaster General will be available to discuss the
details of the accord and emphasize that each part --
reorganization, pay and rates -- is related to the other
and in the interest of the public should be SO considered
by the Congress.
You may also wish to call on George Meany for comments.
(He will be prepared to respond favorably).
You may conclude the meeting by pointing out that the
Executive Branch and labor leaders have worked diligently
in these historic collective bargaining sessions to reach
agreement, and the remaining job must be done by the
Congress. You might urge those Congressmen present to
move the legislation as expeditiously as possible.
The Postal Message and legislation will be ready for
transmittal to Congress at noon Thursday.
NOTE: Gale McGee has a 12 noon flight and may leave
the meeting a little early.
Reproduced at the Richard Nixon Presidential Library and Museum.
April 16, 1970
PARTICIPANTS
Executive
The President
Winton Blount, The Postmaster General
E. T. Klassen, Deputy Postmaster General
Congress
Senator Mike Mansfield
Senator Gale McGee
Senator Hiram Fong
Rep. Carl Albert
Rep. Gerald Ford
Rep. Thaddeus Dulski
Rep. Robert Corbett
Labor
George Meany, President, AFL-CIO
Francis S. Filbey, President, United Federation of Postal
Clerks
James H. Rademacher, President, National Association of
Letter Carriers
Herbert F. Alfrey, President, National Rural Letter
Carriers Association
Lonnie Johnson, President, National Association of Post
Office Mail Handlers, Watchmen, Messengers & Group Leaders
Monroe Crable, President, National Association of Post
Office and General Services Maintenance Employees
Chester W. Parris, President, National Federation of
Post Office Motor Vehicle Employees
Michael J. Cullen, President, National Association of
Special Delivery Messengers
James J. LaPenta, Director of the Laborers' Federal
Public Service Division
James C. Gildea, Executive Assistant to Mr. Meany
Andrew J. Biemiller, Legislative Director, AFL-CIO
Staff
Bryce N. Harlow
John Ehrlichman
Bill Timmons
Henry Cashen
Ron Ziegler
Herb Klein
Paul Carlin, Executive Assistant to the Postmaster General
Ken BeLieu
Lyn Nofziger
Reproduced at the Richard Nixon Presidential Library and Museum.
April 16, 1970
AGENDA
11:00 - 11:05 a.m.
Greeting and photos
The President's Office
11:05 - 11:10 a.m.
Photo opportunity for press corps
The Cabinet Room
11:10 - 11:15 a.m.
President's remarks
11:15 - 11:30 a.m.
Briefing on Agreement by
Postmaster General Blount
11:30 - 11:35 a.m.
Response by George Meany
11:35 - 11:45 a.m.
Leaders' Discussion
11:45 a.m.
Adjournment
11:50 a.m.
Press briefing by Blount and
Meany
The Press Room
Reproduced at the Richard Nixon Presidential Library and Museum.
over ,ЭД LingA
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Reproduced at the Richard Nixon Presidential Library and Museum.
April 16, 1970
PRINCIPAL FEATURES OF AGREEMENT
Organization Structure
Reorganized "United States Postal Service" becomes an
independent establishment within the Executive Branch
of the Government.
Postmaster General appointed by and serves at the
pleasure of the "Commission on Postal Costs and
Revenues, " which has 9 public members named by the
President and confirmed by the Senate.
Labor Relations
Collective bargaining on wages and working conditions
to be authorized as in the private sector.
Ban on federal employee strikes continues; binding
arbitration if bargaining impasse persists 180 days
from start of bargaining.
National Labor Relations Board to supervise union
elections and enforce unfair labor practice actions.
Finance, Rates and Rate-Making
Post Office can borrow up to $10 billion from the
Treasury or general public.
Term
Rate changes subject to public hearing before 3-man
Postal Rate Board named by President; final rate
no
conf
decision by Commission on Postal Costs and Revenues,
but subject to veto by two-thirds vote of either
the U.S. House of Representatives or the U.S. Senate.
Post Office to be generally self-supporting by
January 1, 1978.
service Cost
Pay
8% pay increase for employees of Post Office Department
effective upon enactment.
Promptly after enactment, collective bargaining will be
required on wages, hours, and working conditions. Re-
sulting agreement will compress to 8 years time for
postal employees to reach top step in whatever labor
grade may be established through collective bargaining.
Reproduced at the Richard Nixon Presidential Library and Museum.
April 16, 1970
8¢ First Class Rate with Proportionate Second
and Third Class Rate Increases
Present
Proposed
Basic
Basic
Percentage
Added
Rate
Rate
Increase
Revenues
(millions)
First Class
6¢
8¢
33%
$1,146
Second Class
2.4¢
3.6¢
50%
64
Third Class - Single
6 ¢
8¢
33%
26
Third Class - Bulk
3.9¢
5.2¢
33%
216
Fourth Class - P.P.
$1.20
$1.38
15%
125
Government Mail
6¢
8¢
33%
44
Air Mail
10¢
10¢
0%
0
TOTAL
$1,621
Reproduced at the Richard Nixon Presidential Library and Museum.
1145 Press office releases message
(tor 1pm release)
1200 Blount of Meany
brief press
Reproduced at the Richard Nixon Presidential Library and Museum.
1015
McGee
JE
tong
Meany
Beount
Keasen
1055
Dulski
Corbett
1100
mausfield
LOT Scott
albert
Speaker
ford
Shultz
I
7 union leaders
3 + union
1
-
Photo op
Z
Coeloquy- π-
Beount
Meany
=)
3
Disc. Message
Reproduced at the Richard Nixon Presidential Library and Museum.
238
POST OFFICE DEPARTMENT
The Postmaster General
*
*
UNITED STATES OF
Washington, D.C. 20260
April 16, 1970
URGENT AND CONFIDENTIAL
DETERMINED TO BE AN
ADMINISTRATIVE MARKING
E.O. 12065, Section 6-102
By RD
NARS, Date 4-11-80
MEMORANDUM FOR JOHN D. EHRLICHMAN
258 as 8 MA al ЯЯА over
THE MHILE BECEINED HONSE
From:
Winton M. Blount und
It is vital that the President clearly separate
the postal increase from the reorganization bill. We
have made a commitment to Mr. Meany that this would
be done. The unions' position is that while they will
not oppose the stamp rate increase, it is not their
position to support it.
Reproduced at the Richard Nixon Presidential Library and Museum.
MEMORANDUM OF AGREEMENT
ON THE
"POSTAL REORGANIZATION AND SALARY ADJUSTMENT ACT OF 1970"
Memorandum of Agreement between United States Post Office Department
hereinafter referred to as "Department" and the AFL-CIO; National
Association of Letter Carriers, AFL-CIO; National Association of Post
Office and General Services Maintenance Employees, AFL-CIO; National
Association of Post Office Mail Handlers, Watchmen, Messengers and
Group Leaders (Affiliated with Laborers' International Union), AFL-CIO;
National Association of Special Delivery Messengers, AFL-CIO; National
Federation of Post Office Motor Vehicle Employees, AFL-CIO; National
Rural Letter Carriers Association; United Federation of Postal Clerks,
AFL-CIO; hereinafter referred to as "Unions".
*
*
*
Pursuant to the earlier agreement of April 2, 1970 between the Department
and the above-named unions, the parties have jointly developed, through the
collective bargaining process, proposed legislation which provides for a
major reorganization of the Post Office Department and an 8% pay increase
for postal employees. It shall be known as the "Postal Reorganization and
Salary Adjustment Act of 1970". The parties have jointly agreed to support
this legislative package without qualification and that together they will urge
the Congress to enact this legislation without change. The agreed-upon
legislative proposal provides, amongst other things, for the following:
Organizational Structure
Reorganized United States Postal Service becomes an independent
establishment within the Executive Branch of the Government.
Postmaster General appointed by and serves at the pleasure of the
Commission on Postal Costs and Revenues, which has 9 public
members named by the President and confirmed by the Senate.
Labor Relations
Enable collective bargaining under a statutory framework
establishing methods for conducting elections, providing one or
more methods for resolving negotiating impasses, and requiring
collective bargaining over all aspects of wages, hours, and working
conditions including grievance procedures, and in general, all
matters that are subject to collective bargaining in the private sector.
Reproduced at the Richard Nixon Presidential Library and Museum.
Page 2
Labor Relations (Cont'd)
Ban on federal employee strikes continues; binding arbitration if
bargaining impasse persists 180 days from start of bargaining.
National Labor Relations Board to supervise representation
elections and enforce unfair labor practice provisions.
Finance, Rates, and Rate-Making
Post Office can borrow up to $10 billion from the Treasury or
general public.
Rate changes subject to public hearing before 3-man Postal Rate
Board named by President; final rate decision by Commission on
Postal Costs and Revenues, but subject to veto by two-thirds vote
of either the U.S. House of Representatives or the U.S. Senate.
Post Office to be generally self-supporting by January 1, 1978.
Postal Pay Increase
8% pay increase for employees of the Post Office Department
effective as of the date when this enabling legislation becomes
law.
Promptly after enactment, collective bargaining will be required
on wages, hours, and working conditions, and to compress to 8
years the time for postal employees to reach the maximum step
in whatever labor grade may be established through collective
bargaining. When the new schedule becomes effective, an employee
will immediately be advanced to the next step in the schedule if at
that time he has been in his present step for the period provided
in the new schedule.
It is the understanding of the parties that the Administration will recommend
to Congress the necessary legislation to effectuate this Agreement.
It is the further understanding of the parties that no disciplinary action
will be initiated by the Post Office Department at any level against any
postal employee with respect to the events of March 1970, until
discussions have taken place between the Department and such employee's
union on the policy to be followed by the Department.
Reproduced at the Richard Nixon Presidential Library and Museum.
Post Office Department
AFL-CIO anys 11/Eain/
Jahnademasher National Association of Letter Carriers
AFL-CIO
Manine Crable
National Association of Post Office and
General Services Maintenance
National Lonnis Employees, Association AFL-CIO Johnson of Post Office Mail
April 16, 1970
Date
Handlers, Watchmen, Messengers
and Group Leaders, AFL-CIO
michael Henllen
National Association of Special Delivery
Messengers, AFL-CIO
National Federation of Post Office Motor
Vehicle Employees, AFL-CIO
National Herhert Rural Letter 3.acfrey Carriers Association
Francis United Federation S of Postal Fellay Clerks, AFL-CIO
Reproduced at the Richard Nixon Presidential Library and Museum.
RATE OF INCREASE IN EARNINGS
Percent Change
238
4 Quarters Ending--
Annual Averages
(Seasonally Adjusted)
1966-
1967-
1968-
1969-
March
June
Sept.
Dec.
March
June
Sept.
Dec.
1967
1968
1969
1970
1969
1969
1969
1969
1970
1970
1970
1970
Wages and supplements,
Stable
private nonfarm
5.6
7.3
6.8
6.9
6.9
6.9
6.3
6.6
Adjusted for price
vel increase
(2.7)
(3.0)
(1.37)
(1.9)
(1.3)
(1.2)
(0.4)
Average hourly earnings:
private nonfarm produc-
tion workers
4.7
6.3
6.7
6.5
6.5
6.7
6.9
6.4
Adjusted for price
level increase
(1.8)
(2.0)
(1.2)
(1.67)
(1.0)
(1.0)
(1.0)
Construction
5.6
7.1
8.4
6.2
8.6
8.9
9.8
10.2
Adjusted for price
level increase
(2.7)
(2.8)
(2.8)
(1.3)
(3.0)
(3.1)
(3.7)
M- ufacturing (exclud-
ing overtime)
5.0
5.9
5.9
5.7
5.5
6.4
6.1
Adjusted for price
level increase
(2.1)
(1.6)
(0.4)
(0.8)
(0.0)
(0.7)
(0.2)
Farm labor, wage rates-8.1
8.3
8.3
9.9
9.0
6.6
6.5
Adjusted for price
level increase
(5.1)
(3.9)
(2.7)
(4.8)
(3.3)
(0.9)
(0.6)
Reproduced at the Richard Nixon Presidential Library and Museum.
*
TO МТАЯ
Reproduced at the Richard Nixon Presidential Library and Museum.
RATE OF INCREASE IN EARNINGS - Cont'd
P.2
Percent Change
4 Quarters Ending--
Annual Averages
(Seasonally Adjusted)
1966-
1967-
1968-
1969-
March
June
Sept.
Dec.
March
June
Sept.
Dec.
1967
1968
1969
1970
1969
1969
1969
1969
1970
1970
1970
1970
1/ 2/
1/
1/
Federal employees
3.6
7.0
8.6
7.0
7.4
10.4
9.7
74. 8-
14.2
9.6
6.1
Adjusted for price
vel increase
(0.7)
(2.7)
(3.0)
(2.0)
(1.8)
(4.5)
(3.6)
Consumer Price Index
Increase
2.8
4.2
5.4
4.9
5.5
5.7
5.8
1/
Assumes 6 percent Federal pay raise retroactive to December 28, plus a 1 percent wage drift. No assumptions
are made about unusual changes in occupational earnings, such as large number of lower wage Census workers
being hired.
2/
Includes effects of retroactivity. Without retroactivity, figure would be 7.8 percent.
Reproduced at the Richard Nixon Presidential Library and Museum.
238
3rd Draft - Postal Reorganization
4/13/70
Safire/Nelson/Cashen/Harper
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 under-
took to negotiate and jointly sponsor a postal reorganization and
pay bill to be recommended to the Congress as a measure that
Could
might 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;
Reproduced at the Richard Nixon Presidential Library and Museum.
-2-
-- Provide a framework within which postal employees
in all parts of the country can bargain collectively with postal
management over pay and working conditions; and
-- 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 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.
I. The United States Postal Service
The negotiators quickly agreed that the structure of the
nation's postal establishment should be one that will permit the
postal system to operate on an independent, self-contained basis.
This means that for the first time in generations, the Post Office
will be run by people whose authority will be commensurate with
their responsibilities; it means that the Post Office will carry its
own burden and not be a burden to the taxpayer; and it means that the
Post Office will be run in the public interest of all Americans and
not in the political interest of any individuals.
Reproduced at the Richard Nixon Presidential Library and Museum.
-3-
Fourteen months ago, I pledged that this Administration
would do its best to end the system of political patronage that has
been plaguing the Post Office for the better part of the past two
centuries. We have kept that promise; looking to the future, only
basic changes can provide permanent insurance against a rebirth
of partisan politics in the Post Office.
The legislation that the postal negotiators have agreed
upon, and that I now endorse, would build a firewall 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. 11 The new establishment would be organized in a way de-
signed to make it at least as free from partisan political pressure
such
as such presently existing independent establishments as 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.
Reproduced at the Richard Nixon Presidential Library and Museum.
-4-
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 appoint by the President withthe 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, withthe 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; and
Reproduced at the Richard Nixon Presidential Library and Museum.
-5-
- - Collective bargaining over wages, hours and, in general,
all working conditions that are subject to collective bargaining in the
private sector.
These were essentially the goals spelled out in the proposal
for postal reform that I sent to the Congress in May of last year. The
independent postal establishment on which agreement has now been
reached would provide an excellent means of achieving those goals.
Any proposal for massive reform of a Government organization
as important as the Post Office Department is bound to generate opposition
from those who have a vested interest in preserving the status quo. In
this instance, however, the initial opposition to postal reform has
largely melted away in the face of the urgent national requirement for
a better postal system. Further delay in starting on the road towards
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
coersion 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
Reproduced at the Richard Nixon Presidential Library and Museum.
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 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.
Reproduced at the Richard Nixon Presidential Library and Museum.
-7-
Negotiations over new labor agreements would be expected
to begin ninety days before the expiration of existing agreements, and
there would be a statutory guarantee of final and binding third party
arbitration to resolve negotiating impasses after a ninety day cooling-
off period, an outside fact-finding panel would try to assist the parties
in reaching agreement, and opportunities for mediation and conciliation
would 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 continue to apply, as would the provisions of
Title VI of the Civil Rights Act of 1964. The labor standards provisions
to which Government contracts are made subject would be made
applicable to contracts entered into by the new Postal Service.
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
Reproduced at the Richard Nixon Presidential Library and Museum.
-8-
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; and
-- 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 pos tal
negotiators during their di scussions 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 will 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
Reproduced at the Richard Nixon Presidential Library and Museum.
-9-
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.
Last week 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, this met with limited enthusiasm; yet
it provided a specific illustration of the true cost to the user of our
mail service.
In the course of negotiations, an alternative proposal was
made to cushion the immediate effect of the application of the
principle of pay-as-you-go on the users of the mail. Under this
plan, the general taxpayer would pay 10% of the total cost of the new
postal service in the first year, with that percentage of support de-
clining each year until the mails were completely self-supporting by
the end of calendar 1977.
Though the goal would be delayed, the acceptance of the
principle of pay-as-you-go -- even in stages -- is a fundamental
breakthrough.
Reproduced at the Richard Nixon Presidential Library and Museum.
-10-
N
I prefer an immediate end to subsidication; but since the
principles of pay-as-you-go and postal reform are so important,
I am ready to accept this gradual but steady approach to that goal.
I also prefer the method of raising most of the needed new
revenues from first-class users, since three out of four letters in
this classification are business mail; first class mail -- contrary
to popular belief -- does not now pay its own way. 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
as well.
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 to eight cents;
-- Keep the price of the air mail stamp at ten cents;
-- Increase second class postage rates an average of 50%; and
-- Increase third class bulk rates an average of one third
(the same percentage increase as first-class), while increasing
third class single piece rates from six cents to eight cents.
Reproduced at the Richard Nixon Presidential Library and Museum.
-11-
These rate increases will generate additional revenues of
$
, enough to put the new, independent United States
Postal Service on the road to a sound, pay-as-you-go basis, with
the 10% contribution by the Federal taxpayer completely phased out
in 1977.
V. Toward Postal Excellence
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.
Reproduced at the Richard Nixon Presidential Library and Museum.
-12-
That is a goal worth striving for. With this postal reform
legislation, it is a goal that can be achieved.
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 the opportunity to
pass legislation that will bring a new fairness to postal employees,
a new efficiency to the system itself, and long overdue equity to
the taxpayer.
Taken together, this is a package of fairness, and I urge
the Congress to deliver it promptly; it is eagerly awaited by those
who need better mail service and those who need greater opportunity
in a revitalized postal system.
Reproduced at the Richard Nixon Presidential Library and Museum.
238
THE WHITE HOUSE
WASHINGTON
AGENDA
CABINET MEETING
Monday, April 13, 1970
3:00 P.M. to 4:30 P.M.
1.
THE POSTAL PACKAGE
Honorable Winton M. Blount,
The Postmaster General
2.
WAGES AND LABOR COSTS IN 1970
Honorable George P. Shultz,
Secretary of Labor
3.
THE BUDGET OUTLOOK
Honorable Robert P. Mayo,
Director, Bureau of the Budget
4.
IMPLICATIONS OF RECENT DEVELOPMENTS
FOR THE ECONOMY
Dr. Herbert Stein, Acting Chairman,
Council of Economic Advisors
5.
BRIEF REMARKS BY THE PRESIDENT
Reproduced at the Richard Nixon Presidential Library and Museum.
CCEP me postal page demomary?
PRESIDENT'S COPY
THE WHITE HOUSE
WASHINGTON
AGENDA
CABINET MEETING
Monday, April 13, 1970
3:00 P.M. to 4:30 P.M.
3:00-3:30
1.
THE POSTAL PACKAGE
Honorable Winton M. Blount,
The Postmaster General
a) Sub-topics
6%
-- Background of legislative action
8%=
-- Work stoppage highlights
-- Negotiations and agreement on pay,
Comp: .145
(20 min)
postal reorganization, and discipline
-- Costs and revenue proposals
-- Reorganization highlights
-- Summary of significant achievements
(10 min)
b) Discussion
Note: You may want to express your views on
this matter at this point (immediately following
the PMG's briefing) rather than at the end of
the meeting.
3:30-3:55
2.
WAGES AND LABOR COSTS IN 1970
Honorable George P. Shultz
Secretary of Labor
Reproduced at the Richard Nixon Presidential Library and Museum.
3:55-4:20
3.
THE BUDGET OUTLOOK
Honorable Robert P. Mayo,
Director, Bureau of the Budget
a) Sub-topics
--
Revised outlook for 1970
(15 min)
-- Current appraisal of 1971
-- Preliminary thoughts on 1972
(10 min)
b) Discussion
4:20-4:30
4.
IMPLICATIONS OF RECENT DEVELOPMENTS
FOR THE ECONOMY
Dr. Herbert Stein, Acting Chairman,
Council of Economic Advisors
(5 min)
a)
Brief summary
(5 min)
b) Discussion
4:30--
5.
BRIEF REMARKS BY THE PRESIDENT
33
1650
INFORMATION
Reproduced at the Richard Nixon Presidential Library and Museum.
PROPOSED POSTAL REORGANIZATION AND PAY BILL
Organizational Structure
Reorganized Post Office Department becomes independent establishment.
Postmaster General appointed by, serves at pleasure of, Commission
on Postal Costs and Revenues, which has 9 public members named by
President and confirmed by Senate.
Labor Relations
Collective bargaining on wages and working conditions as in private
sector.
Ban on federal employee strikes continues; binding arbitration if
bargaining impasse persists 180 days from start of bargaining.
NLRB supervises union elections and enforces unfair labor practice
actions.
Finance, Rates, and Rate-Making
Post Office can borrow up to $10 billion from Treasury or general
public.
Rate changes subject to public hearing before 3-man Postal Rate Board
named by President; final rate decision by Commission on Postal Costs
and Revenues, but subject to veto by two-thirds vote of either House or
Senate.
Post Office to be generally self-supporting by January 1, 1978.
Pay
8% pay increase for employees of Post Office Department effective upon
enactment.
Promptly after enactment, collective bargaining will be required on
wages, hours, and working conditions. Resulting agreement will
compress to 8 years the time for postal employees to reach top step
in whatever labor grade may be established.
Reproduced at the Richard Nixon Presidential Library and Museum
PROPOSED POSTAL REORGANIZATION AND PAY BILL
Organizational Structure
Reorganized Post Office Department becomes independent establishment.
Postmaster General appointed by, serves at pleasure of, Commission
on Postal Costs and Revenues, which has 9 public members named by
President and confirmed by Senate.
Labor Relations
Collective bargaining on wages and working conditions as in private
sector.
Ban on federal employee strikes continues; binding arbitration if
bargaining impasse persists 180 days from start of bargaining.
NLRB supervises union elections and enforces unfair labor practice
actions.
Finance, Rates, and Rate-Making
Post Office can borrow up to $10 billion from Treasury or general
public.
Rate changes subject to public hearing before 3-man Postal Rate Board
named by President; final rate decision by Commission on Postal Costs
and Revenues, but subject to veto by two-thirds vote of either House or
Senate.
Post Office to be generally self-supporting by January 1, 1978.
Pay
8% pay increase for employees of Post Office Department effective upon
enactment.
Promptly after enactment, collective bargaining will be required on
wages, hours, and working conditions. Resulting agreement will
compress to 8 years the time for postal employees to reach top step
in whatever labor grade may be established.
Reproduced at the Richard Nixon Presidential Library and Museum
238 8
THE WHITE house
DETERMINED TO BE AN
ADMINISTRATIVE MARKING
E.O. 12065, Section 6-102
April 13, 1970
P--
Ry
CONFIDENTIAL Date 4-11-80
MAR
MEMORANDUM FOR JOHN EHR LICHMAN
CC:
Director Robert P. Mayo
Ken Cole
Henry Cashen
Bill Safire
FROM:
Ed Harper Ed
SUBJECT:
Postal Rate Schedule
Attached is the postal rate schedule about which the
White House and the Postmaster General have agreed.
ΓA
You will note that it features an 8 ¢ first class rate, a
R
50% increase in second class rates, a 33% increase in
third class bulk ("junk") rates, and no increase in
HUE HONSE
first class air mail rates.
13
Per your request, I am sending copies of this schedule
to Director Mayo and Bill Safire.
Attachment: Postal Rate Schedule.
Reproduced at the Richard Nixon Presidential Library and Museum.
238
postal
CASHEN FROM SAFIRE
4/13/70
Here is my rewrite of Dave Nelson's rewrite of the first draft.
Nelson
with
changes
OFF
it
you
what I fined.
The basic point of difference in substance is the argument for
why the President changed his mind about the 10 cents. Nelson
said first class mail hikes are needed, and 2/3 of a loaf is
better than none; I took the position that the President won his
principle of pay-as-you-go and would go along with a gradual
desubsidization, which meant only 8 cents needed.
The stylistic changes are (a) Nelson wanted to say "The negotiators
have agreed, and I now propose" several times to dissociate the
President from the proposals somewhat, but I think this would be
un-Presidential. He has to be behind what he proposes. (b) The
last few paragraphs of rhetoric struck Nelson as rather Madison
Av enue, which I take as a compliment and have left in (with some
modifications).
Reproduced at the Richard Nixon Presidential Library and Museum.
THE WHITE HOUSE
DETERMINED TO BE AN
WASHINGTON
ADMINISTRATIVE MARKING
E.O. 12065, Section 6-102
By
Rr
April 13, 1970
NAR. , Date 4-11-80
CONFIDENTIAL
MEMORANDUM FOR JOHN EHRLICHMAN
CC:
Director Robert P. Mayo
Ken Cole
Henry Cashen
Bill Safire
FROM:
Ed Harper Ed
SUBJECT:
Postal Rate Schedule
Attached is the postal rate schedule about which the
White House and the Postmaster General have agreed.
You will note that it features an 8 ¢ first class rate, a
50% increase in second class rates, a 33% increase in
third class bulk ("junk") rates, and no increase in
first class air mail rates.
Per your request, I am sending copies of this schedule
to Director Mayo and Bill Safire.
Attachment: Postal Rate Schedule.
Reproduced at the Richard Nixon Presidential Library and Museum.
8 ¢ First Class Rate with Proportionate Second
and Third Class Rate Increases
Separate
Present
Proposed
Basic
Basic
Percentage
Added
Rate
Rate
Increase
Revenues
(millions)
First Class
6¢
8¢
33%
$1,146
Second Class
2.4¢
3.6¢
50%
64
Third Class - Single
6¢
8 ¢
33%
26
Third Class - Bulk
3.9¢
5.2¢
33%
216
Fourth Class - P.P.
$1.20
$1.38
15%
125
Government Mail
6¢
8 ¢
33%
44
Air Mail
10 ¢
10 ¢
0%
0
TOTAL
$ 1,621
4-13-70
Reproduced at the Richard Nixon Presidential Library and Museum.
Book
APR 14 1970
EXECUTIVE OFFICE OF THE PRESIDENT
BUREAU OF THE BUDGET
WASHINGTON, D.C. 20503
APR 1 3 1970
MEMORANDUM FOR Mr. John D. Ehrlichman
Assistant to the President for
Domestic Affairs
Subject: Postal reform and the budget
It has come to my attention that on occasions the President
has mentioned an expectation that the postal reorganization
would take the postal system and the postal deficit out of
the Government's budget.
It is important that we have a mutual understanding of this
situation. Here is our perspective on the matter.
1. The gross expenditures of the Post Office
Department are not in the budget now. All the receipts
of the Post Office Department are already netted against
the gross expenditures, and only the difference is a part
of the budget totals. For example, for 1971, the budget
submitted in January contemplated postal outlays of
$8,238 million partly offset by applicable receipts of
$7,857 million, leaving budget outlays of only $382 mil-
lion. Only the $382 million is a part of the $200,771
million of total budget outlays.
2. Even with postal reorganization, the Government's
payments for "public services" and any Government contri-
butions to make up postal deficits would necessarily be a
part of our budget totals.
3. If there are no "public services" charged to the
Government and if the postal system is able to operate
without a deficit, the Government contribution for these
purposes would of course be zero.
4. Under the present ground rules, which have been
applicable to all Government-owned corporations since the
Government Corporation Control Act of 1945, and which were
Reproduced at the Richard Nixon Presidential Library and Museum.
2
reaffirmed by the President's Commission on Budget Concepts
in 1967, the net spending of wholly-owned Government corpo-
rations is included in the budget totals, and this spending
necessarily includes the disbursement of borrowed money.
The budget provides a financial plan and record for the
whole Government, not just for the general fund. Tennessee
Valley Authority, which finances its power construction
primarily from moneys borrowed in the market, is in the
totals. To remove the spending of Government corporations,
out of their own borrowings, from the budget would not only
make the budget an incomplete instrument, but it would also
provide great encouragement toward creating many vehicles for
borrowing on the market with probable disruptive effects upon
Treasury's own borrowing program and borrowing costs, and on
the Government's sector of the credit market. There was
testimony on this rule a few years ago, for instance, which
caused the bill drafters to change the legislation for the
Saint Lawrence Seaway Development Corporation and eliminate
the authority for it to borrow on the market contained in
the early drafts.
To depart from these rules for the Post Office would probably
require changing the rules for the other Government corpo-
rations and would undoubtedly prompt other attempts to get
out from under the budget. Such an action would probably
lead to a significant credibility gap for the Administration.
Robert S Mayo
Robert P. Mayo
Director
Reproduced at the Richard Nixon Presidential Library and Museum.
238
POST OFFICE DEPARTMENT
*
The Postmaster General
*
UNITED STATES OF
Mashington, D.C. 20260
April 10, 1970
MEMORANDUM FOR JOHN EHRLICHMAN
This is a broad outline of the bill under discussion with
the unions. We should have all the details pinned down
HONSE
by tonight or tomorrow and will advise.
WAS
1810 10 VW
Winton M. Blount
Enclosure: Draft of The Postal Reorganization
and Salary Adjustment Act of 1970.
Reproduced at the Richard Nixon Presidential Library and Museum.
4/10/70
THE POSTAL REORGANIZATION AND
SALARY ADJUSTMENT ACT OF 1970
The Post Office Department and the seven postal employee organi-
zations representing the major occupational groups in the Department have agreed
upon a postal reorganization and pay bill that they will jointly propose
to the Congress.
The Department and the unions have agreed that the structure of
the reorganized Post Office Department should be one that will permit
a "self-contained" postal operation.
This means that the structure of the postal establishment should
provide an appropriate measure of insulation from direct control by
The Bureau of the Budget
The Treasury Department
The General Services Administration
The Congress, and
The White House.
To be "self-contained," the Post Office Department must have:
continuity of responsible management
appropriate control over postal rates
a workable means of borrowing in the private market
Reproduced at the Richard Nixon Presidential Library and Museum.
freedom from partisan political intervention
the means to operate on a self-sustaining basis,
after public service costs have been taken into
account, and
the right to engage in collective bargaining with
representatives of its rank and file employees over
wages, hours, and, in general, all other matters
subject to collective bargaining in the private sector.
Accordingly, the proposed legislation would restructure the Post
Office Department as an independent establishment in the Executive
Branch of the Government. Section 104 of title 5 of the United States
Code, defines the term "independent establishment" as:
"An establishment in the executive branch which is not
an executive department, military department,
11
Government corporation, or part thereof
Examples of such independent establishments include the National
Aeronautics and Space Administration and the Atomic Energy Com-
mission.
The new independent establishment would be called "The Post Office
Department. 11 Its operating head would be a Postmaster General,
who would be appointed by a nine-member commission on postal
2
Reproduced at the Richard Nixon Presidential Library and Museum.
costs and revenues. The Postmaster General would be vested with
full authority to manage the day-to-day operations of the Department.
The first section of the bill spells out the broad policy that is to
govern the operation of the reorganized Department. This section
provides, among other things, that the nation's postal system shall
be operated as a basic and fundamental communications service
provided to the people by the Government of the United States; that
it will be designed "to bind the nation together" by facilitating
the prompt, reliable, efficient and economical transmittal of
personal, educational, literary, and business communications;
that it shall provide such service to patrons in all areas and shall render
public services to all communities; and that the costs of the service
shall not be apportioned in such a way as to impair its overall value
to the people.
The policy section goes on to provide that the compensation paid
to the Department's officers and employees shall be maintained at
a level of comparability to the compensation paid in major industries
in the private sector of the economy. The bill also provides that in
the determination of all its policies, the Post Office Department shall
give the highest consideration to expeditious collection, transportation,
and delivery of important letter mail.
3
Reproduced at the Richard Nixon Presidential Library and Museum.
Other provisions in the policy section are patterned closely on
corresponding provisions in S. 3613
PERSONNEL AND EMPLOYEE-MANAGEMENT RELATIONS
The negotiations between the Post Office Department and the postal
employee organizations led to quick agreement that the jointly sponsored
postal reorganization and pay bill should provide a statutory framework
for collective bargaining over all aspects of wages, hours, and, in general,
all matters that are subject to collective bargaining in the private sector.
should
It was agreed that this statutory framework/establish fair procedures for
conducting elections and for resolving negotiating impasses.
Accordingly, the proposed legislation would authorize collective
bargaining over wages, hours, and other matters that are subject to
ollective bargaining in the private sector, including, but not necessarily
limited to:
grievance procedures
final and binding arbitration of disputes
seniority rights
holidays and vacations
life insurance
medical insurance
overtime
training
4
Reproduced at the Richard Nixon Presidential Library and Museum.
safety
leave of absence
promotions
demotions, and
transfers.
Negotiating impasses would be resolved by final and binding arbi-
tration, after a 90-day cooling off period during which there would be
opportunities for mediation, concilliation, fact finding, and similar
procedures.
The National Labor Relations Board would, by law, be given juris-
dication over representation matters and over charges of unfair labor
practices by either labor or management.
As provided by Sec. 801 of H. R. 4, as reported by the House Post
Office and Civil Service Committee, rank and file postal employees
would be in the postal career service, which would be part of the Civil
Service.
All postal employees would retain their full benefits under the Civil
Service retirement system, and the provisions of the Veterans Preference
Act would continue to apply. The statutory Workman's Compensation
system for Federal employees would be continued without change.
5
Reproduced at the Richard Nixon Presidential Library and Museum.
Compensation, benefits, and other terms and conditions of employ-
ment in effect immediately prior to the reorganization would be continued,
for employees in collective bargaining units, until changed through the
collective bargaining process.
The right of postal employees to petition Congress would be expressly
preserved.
Labor standards provisions applicable to Government contracts -
the Davis-Bacon Act, Walsh-Healey Act, Contract Work Hours Standards
Act, and the Service Contract Act - would apply to contracts of the re-
structured Post Office Department.
FINANCE, RATES AND RATE-MAKING
The reorganized Post Office Department would have direct access
to its revenues, and a broad measure of control over its own finances.
The Department would be empowered to raise needed funds through
borrowing from the Treasury Department, or, under appropriate cir- -
cumstances, from the general public.
The postal rate structure in existence immediately prior to the
reorganization would be continued, but the Department would have
authority to make changes in the rate structure in accordance with a
procedure designed to give full protection to the rights of all interested
parties. The bill would provide for public hearings on rate changes
6
Reproduced at the Richard Nixon Presidential Library and Museum.
proposed by the Postmaster General, and such postage rates as
are now set directly by Congress could be changed by the Department
only after a 60-day waiting period during which the proposed change
could be vetoed by a 2/3 vote of either House of Congress.
TRANSPORTATION AND MISCELLANEOUS PROVISIONS
The general outlines of the existing statutory law governing pro-
curement of transportation services by the Post Office Department
would be preserved, but the authority of the Department to contract
for the procurement of such services would be broadened.
In addition, much of the existing law governing the mailability
of various classes of material, the designation of classes of mail
included in the Post Office Department's monopoly, and various other
matters, would be continued substantially without change.
PAY
In addition to the general 6 per cent pay increase retroactive to
December 27, 1969, the proposed legislation would enact a further
8 per cent increase for employees of the Post Office Department,
effective immediately upon enactment of the statute.
Promptly after the bill became law, the Postmaster General
and employee organizations having national exclusive recognition would
be required to begin negotiations over all aspects of wages, hours,
and working conditions in the Post Office Department. The agreement
Reproduced at the Richard Nixon Presidential Library and Museum.
resulting from these negotiations would compress to 8 years the time
required for postal employees to reach the top step in whatever labor
grade might be established for them. When the new pay schedule
becomes effective, an employee will immediately be advanced to the
next step in the schedule if at that time he has been in his present step
for the period provided in the new schedule.
CONCLUSION
The proposed legislation adopts, we believe, many of the best
features of a number of proposals that have been advanced over the
past year. Since the measure was hammered out in the collective
bargaining process, it entails concessions by all parties. The end
product, however, is, we believe, one that will adequately equip the
Post Office Department to perform the tremendous tasks awaiting it.
The Department, the AFL-CIO, and all the postal unions having national
exclusive recognition wholeheartedly support the bill.
Reproduced at the Richard Nixon Presidential Library and Museum.
April 9, 1970
ACTION
MEMORANDUM FOR JOHN EHRLICHMAN
FROM:
Ed Harper
SUBJECT: Postal Revenues, Expenses and Rates
REFERENCE:
The Attached Memorandum
The attached memorandum is a reasonably brief comprehensive
statement of some options to our present 10 ¢ stamp position.
If this position is ever to be changed, it should probably be
changed simultaneously with the announcement of the postal
agreement.
May I call your particular attention to the explanation of the
"Anticipated Annual Costs" table on Page Two and Question # 2
in Attachment D.
RECOMMENDATION
That you consider at your earliest possible convenience
the attached memorandum.
Attachment: Postal Revenues, Expenses and Rates Memorandum
ADE Hugrane called in a few late substance changes
which The memo. See E. page Z, Sd. A ,
do vat however offert The Atlachment
and of Attachment
Reproduced at the Richard Nixon Presidential Library and Museum.
THE WHITE house
9am Draft.
WASHINGTON
4/10/70
April 9, 1970
MEMORANDUM FOR JOHN EHRLICHMAN
FROM:
Ed Harper
SUBJECT: Postal Rates, Revenues and Expenditures; Re Postal
Settlement Message
The purpose of this memorandum is to describe where we are in
the matter of postal rates, revenues and expenditures; the reaction to
the President's Message on the postal settlement; and some options
which could alter the present reaction to the Message.
I. The Present Situation. In his April 3rd Message to the Congress
on the postal settlement the President proposed to raise $2. 6 billion
in postal revenues. The Message showed the following breakdown:
Anticipated Annual Revenues
Totals
Increase first-class rates to 10 ¢
$2, 300 million
Increase second and third-class postal revenues
120
Increase parcel post rates
125
Government mail reimbursements
89
Total
$2, 634 million
The Message asserted that "these ($2. 6 million) revenues are essential
to meet the salary needs of postal workers, to wipe out the postal deficit,
and to contribute to the efficiency of the postal system. " The breakdown
of the $2. 6 billion among the three categories is as follows:
Reproduced at the Richard Nixon Presidential Library and Museum.
2
a
Anticipated Annual Costs
b
Postal Pay Increase
- 6%
$374.7 million
- 8%
548.2
- Compression
181.7
Sub Total
1,104.6
Postal deficit
609.0
Increased postal efficiency
900.0
$2,603.6
"The Postal Pay Increase, 11 at $1, 104. 6 million is detailed
per the settlement with the unions. The "Postal Deficit, 11 at $609.0
million is the expected difference presently carried between revenues
and all expenses exlucding the "public service cost" element. As the
postal rate structure is improved the postal deficit item is to be
reallocated to the improvement of the postal system's efficiency.
(The postal rate deficit can be calculated in the three ways described
in Attachment A.) The $900 million item, "Increased Postal Efficiency"
equals approximately the total postal deficit for the last two years and
is designed in the short term as a contingency reserve to set the new
postal entity on a solid financial basis consistent with good management
practices.
a) The estimated costs of fringe benefits are not included.
b) The estimated cost to the Post Office Department of the wage settlement
is based on figures supplied by Assistant Postmaster General Hargrove.
Reproduced at the Richard Nixon Presidential Library and Museum.
3
II.
Reaction to the President's Message
The media made a great deal of the fact that while the first
class mail rates for the "little man" were increased 67%, the rates
for the second and third class ("junk") mails were not comparably
increased for businesses. The President had apparently asked "the
little man" to pay for the postal workers pay increase.
Since the Congress seems determined to increase the first class
rates to 8¢ at a maximum, it might be tactically. wise to reconsider
the 10 ¢ first class rate proposal. Such a reconsideration might result
in a plan which would cut the first class rate proposal back to 8¢, but
would increase the rates for second and third class mailers.
III. The Options
Postal rates among the various classes of mail are not completely
independent. For example, the first class rate also sets the third
class single-piece rate and the government mail rate. The Interstate
must
Commerce Commission in the fourth class parcel post rates had to
fix charges at levels which produce no more than 104% of total allocated
costs. The only rates not hooked to the first class rate are the second
class rate, the third class bulk rate and the air mail rate.
Reproduced at the Richard Nixon Presidential Library and Museum.
A.
THE 8 ¢ OPTION
Setting the first-class stamp at 8 ¢ would by itself produce
$1, 341 million in revenues. The following table details this increase.
Interdependent Rates
Present
Proposed
Basic
Basic
Percentage
New
Rate
Rate
Increase
Revenue:
First Class
6 ¢
8 ¢
33%
$1,146
Third Class Single
6¢
8 ¢
33%
26
Fourth Class - P. P.
$1.20
$1.38
15%
125
Government Mail
6¢
8 ¢
33%
44
$1,341
Given an 8¢ first-class rate and only three rates as being variable
it is impossible to raise in a defensible manner $2. 6 billion (see attachmer
B.) To achieve the $2. 6 billion in revenues would require a 233 per cent
increase in the second-class mail rate and a 105 percent increase
in the third class-bulk rate which is both price sensitive and already almo
paying its own way on a fully allocated cost basis. (The percentage of
cost paid by each class of mail is detailed in Attachment C)
If the first-class stamp is set at 8¢ and proportional increases
are made in other classes of mail approximately 1.6 billion dollars
might be raised as is shown in the following table:
Reproduced at the Richard Nixon Presidential Library and Museum.
8¢ First Class Rate with Proportionate Second and
Third Class Rate Increases
Present
Proposed
Basic
Basic
Percentage
Added
Rate
Rate
Increase
Revenues
First Class
60
8¢
33%
$ 1,146
Second Class
2.4c
3.60
50%
64
Third Class .. Single
60
8c
33%
26
Third Class -- Bulk
3.9c
5.2¢
33%
216
Fourth Class - P. P.
$1.20
$1.38
15%
125
Covernment Mail
60
8c
33%
44
Air Mail
100
11¢
10%
15 &
Total
$1,636
4-8-70
JWH
Reproduced at the Richard Nixon Presidential Library and Museum.
The problem with shifting down from a 10 ¢ to an 8¢ stamp is
explaining politically why this week one billion dollars less revenue
is needed than was needed last week.
One strategy is to explan that the decision was made to launch
the new postal authority on a less financially sound basis than originally
proposed and ask the Congress to appropriate money for unexpected
contingencies as needed from the general fund. (For some probable
reporter's questions and some answers, see Attachment D.)
Reproduced at the Richard Nixon Presidential Library and Museum.
B.
THE SPLIT FIRST CLASS OPTION
One option is to split the present first class rate into two
rates - a personal rate and a business rate. Approximately 80%
of the first class mail is sent by businesses; only 20% is sent by
private individuals. The first class personal rate could be held
at the present 6¢ level; the first class business rate could be
adjusted at a value of $460 million per 1¢ of increase. The business
rate. would be paid by all businesses, corporations or partnerships
sending letters. Private individuals sending letters for their
business purposes - i.e., paying bills, applying for jobs, writing
their lawyers, etc. - would pay only the personal rate: Penalities
would be assessed for companies "cheating" by using the personal
rate.
The major difficulty with this option, as seen by Assistant
Postmaster General Hargrove, is that it would be too difficult to
enforce - not for big businesses or medium size businesses - SO much
as for relatively smaller businesses which could do without putting a
return address on their envelope and without using a postage meter
to send their mail.
Reproduced at the Richard Nixon Presidential Library and Museum.
C. THE 10 ¢ FIRST CLASS OPTION
One option is to stick with the President's message
calling for the 10 ¢ first class stamp. There are two principal
advantages to this option: (1) it raises sufficient revenues to
cover postal operations in the immediate and foreseeable future,
and (2) it has kept the second and third class junk mailers from
lobbying against the reorganization plan and rate increases. The
major disadvantages of this plan are: (1) it seems to unfairly
discriminate against the private individual using first class mails,
(2) it may be raising more revenue than can be used in the next
couple of years, and (3) it discriminates in favor of the junk mailer.
(See Attachment E - Facts About the Second Class and Third Class
Junk Mailer.)
"IT DOESN'T MAKE ANY DIFFERENCE"
One could argue that at this point in time, the revenue
consequence of rate proposals should take secondary position to
political and tactical considerations, because one of the key
points of our reorganization proposal is that the Postal Authority
and NOT the Congress controls the postal rate structure. Once the
reorganization plan in put in effect, the Postal Authority could raise
or lower rates for different classes and create new rate classes if
that appears appropriate.
Reproduced at the Richard Nixon Presidential Library and Museum.
Fee el
Penroduced at the Richard e Nixon Presidential ibrary and Museum
ATTACHMENT A
ALTERNATIVE METHODS OF CALCULATING
POSTAL RATE DEFICITS
The amounts of money necessary to cover the postal rate
deficit vary considerably with the proposals under consideration.
Under existing law, the postal pay and postal deficit factors
would result in a rate deficit of $1. 6 billion. A key element in
determing the rate deficit is an item known as "public service costs, "
which is defined by the Congress as cost to the postal system for
things such as rural free delivery, the mailing of non-profit
organizations publications, losses on various special postal services,
etc. Under present law the "public service cost" item is reimbursed
to the Post Office Department by the Congress from the general fund
on a fully allocated basis - i.e., operating capital costs/are fully allocated,
including depreciation
perhaps arbitrarily,- to all of the activities of the Post Office Department.
The Administration's original proposal for postal reorganization -
H.R. 11750 - would treat the public service item on a "revenue foregone"
basis, rather than a fully allocated basis. The revenue foregone basis
calculates "public service costs" as if a non-profit organization's
publications had paid regular commercial publications rates for mailing.
Reproduced at the Richard Nixon Presidential Library and Museum.
H.R. 4 which was reported out the House Committee
adopted the revenue foregone procedure of H.R. 11750 but added
the provision that in its initial stages the new postal authority
would be supported with a subsidy equal to 10% of its total annual
operating revenues.
Thus, the postal rate deficit as calculated under present
lay with the pay raises is about $1. 6 billion; under H.R. 11750,
$2. 1 billion; and under H.R. 4, $1. 2 billion.
Reproduced at the Richard Nixon Presidential Library and Museum.
100 B
Renroduced at the Richard. Nixon Presidential I ibrary and Museum
ATTACHMENT B
THE DIFFICULTY OF RAISING $2.6 BILLION
WITH AN 8 ¢ FIRST CLASS RATE
Present
Proposed
Basic
Basic
Percentage
New
Rate
Rate
Increase
Revenues
First Class
60
8¢
33%
$ 1,146
Second Class
2.40
84
233%
297
Third Class - Single
60
Sc
33%
26
Third Class :: Bulk
3.9c
8¢
105%
681
Fourth Class .. P. P.
$1.20
$1.38
15%
125
Government Mail
60
8c
33%
44
Air Mail
10¢
11¢
10%
15
Total
$ 2,334
Target
2,614
Deficiency
$ 280
4/8/70
JWH
Reproduced at the Richard Nixon Presidential Library and Museum.
1-00 J
Revenue
Revenues as C per-
Revenues and
Demonstrably
contribution to
cent of demonstr
Y
Service category
reimbursements
related costs
institutional costs
related cos
First-class mail
$3 135.4
$1 691.5
$1 443.9
185.47
Airmail
215.7
165.3
50.4
130.5
Priority mail
269.8
88.8
181.0
303.8
Second-class mail:
Within the county
7.4
33.7
(26.3)
22.0
Outside the county:
Nonprofit publications
8.9
66.5
(57.6)
13.4
Classroom publications
1.7
6.7
(5.0)
25.4
Regular-rate publications
122.0
238.8
(116.8)
51.1
Fees
3.4
-
3.4
Total publishers' mail
143.4
345.7
(202.3)
41.5
Transicht mail
4.0
4.1
(.1)
97.6
Total second-class mail
147.4
349.8 4/
(202.4)
42.1
Controlled circulation publications
32.3
15.0
17.3
215.3
Third-class mail:
Single piece rate
122.0
98.1
23.9
124.4
Bulk rate - regular
594.9
299.4
295.5
198.7
Dulk rate - nonprofit
55.4
62.6
(7.2)
88.5
Fees
9.2
-
9.2
-
Total third-class mail
781.5
460.1
321.4
169.9
Fourth-class mail:
Parcels (zone rate)
704.2
422.7
281.5
166.6
Catalogs
33.3
12.8
20.5
260.2
Fees
.7
-
.7
-
(in millions)
Total zone-rate mail
738.2
435.5
302.7
169.5
Special fourth-class rate
89.3
99.4
(10.1)
39.8
Library rate
3.5
6.6
(3.1)
53.0
Fees
.2
-
.2
-
FOR MAJOR SERVICE CATEGORIES - FY 1969
SUMMARY OF REVENUES AND COSTS
Total fourth-class mail
831.2
541.5
289.7
153.5
Government mail
181.9
66.4
115.5
273.9
Free mail for the blind and handicapped
-
2.1
(2.1)
-
International mail
255.2
130.7
124.5
195.3
Special services
283.8
144.8
139.0
196.0
Nonpostal services for other agencies
109.9
-
109.9
-
11.8
3/
Unassignable revenues and costs
-
11.8
-
Total all mail and services
$6 255.9
$3 656.0
$2 599.9
in
171.1%
Institutional costs
-
-
3 622.8
-
Revenue deficiency before public service costs
-
-
$1 022.9
6
Public service costs
699.4
Revenue deficiency
-
$ 323.5
Reproduced at the Richard Nixon Presidential Library and Museum.
See footnotes on page #6.
Dl LEB
Reproduced at the Richard Nixon Presidential I ibrarv and Museum
ATTACHMENT D
PROBABLE REPORTER'S QUESTIONS AND SOME
ANSWERS ABOUT THE 8¢ OPTION
1. Is relinquishing the contingencies fund consist with the
President's basic proposal for a postal entity? No it is not, because
the President wished to establish the postal entity on a financially
independent and healthy basis
2. Why is the President back: down from his request for the
10 ¢ stamp? The President's original request had to be made before
the form of the postal reorganization was agreed upon with the postal
unions. The President had to provide for the contingency that a rate
policy which could have required as much as $2. 6 billion would have
been included in the reorganization proposal. The finally agreed upon
rate policy develops a revenue requirement substantially less than the
$2. 6 billion which has enabled the President to reduce his proposal.
Reproduced at the Richard Nixon Presidential Library and Museum.
3. What does this do to the FY 71 budget? The new postal
revenues which the President is now proposing are still greater
than the cost of the pay settlement and of eliminating the $609 million
postal deficit. Thus this settlement has no effect on the FY 71 surplus.
4. Doesn't this new revised schedule reflect the negative reception
which the President initial 1.0 ¢ proposal received? There are two
facts that should be kept in mind: (1) Our estimate for revenue
need has been revised by about $1 billion and (2) the fiscal facts of
postal rates are that more than one half of the nation's postal revenues
come from first-class mail; thus; if one is to secure a significant
increase in revenues he must significantly increase first-class mail
rates. The new estimates of revenue need have allowed the President
to adjust downward his request for a first-class rate increase and at
the same time he has made compensating increases in second and
third class mail rates.
5. Won't the increases in second and third class mail rates bring
the junck mail lobbyists outof their hiding places and thereby endanger
the chances of passing the postal reform proposal?
Many corporations making extensive use of the mail S have a clear interest
in postal rates and will undoubtedly send their representatives to tell
their side of the rate story to Congress. The postal unions, the Congress,
and the American people have all realized that the time for postal reform
has come. The mail users' lobbyists should not block postal reform because
Reproduced at the Richard Nixon Presidential Library and Museum.
(1) it will not directly or immediately effect is their rates and (2)
it should result in an improved mail service for them.
Reproduced at the Richard Nixon Presidential Library and Museum.
1-am Lu
Reproduced at the Richard Nixon Presidential Library and Museum.
ATTACHMENT E
FACTS ABOUT SECOND CLASS AND THIRD CLASS
JUNK MAILERS
The third class bulk rate regular mailers pay more than
199% of the out of packet
799% of thefully allocated costs to the Post Office for handling the
mail. The second class regular rate publications cover only about
51% of their ant of packet
one-quarter (1/4) of their fully allocated costs to the Post Office.
Note, that both the third class and the second class mailers are
required by the Post Office to pre-sort their mail; this sorting,
which thePost Office has to do for the first class mail, makes
the postal costs of handling second and third mail per unit substantially
less than the per unit costs of handling first class mail.
The second class postal users are non-profit organization
publishers, publications for classroom use and regular publications
such as Time, the New York Times, Newsweek, The Readers Digest
etc. Some newspapers and magazines are in a financially weak position
and object to paying greatly increased postal rates.
The third class mailers are referred to by the second class
mailers as the "junk mailers. 11 The third class mailers have traditionally
had a very effective lobby which is willing and able to spend the money
necessary to defeat legislative rate increases.
Reproduced at the Richard Nixon Presidential Library and Museum.
Another key factor about third class mail is that it is
rate-sensitive. In some areas, there are private sector delivery
and distribution firms which can easily compete with third class
bulk rates. For the delivery of messages, third class bulk rate
mailers can consider alternative media such as newspapers and
radio and television.
Reproduced at the Richard Nixon Presidential Library and Museum.