Legislation approved by the Senate on April 25 is aimed at saving the U.S. Postal Service (USPS), which has been losing money daily and plans to make drastic changes if Congress doesn’t act by May 15.
Postmaster Patrick Donahue had proposed a series of cost-cutting measures, including eliminating Saturday and overnight delivery and closing up to 3,700 local post offices, mostly in small towns, and replacing them with automated centers operating out of local businesses. (See the February 2012 issue of Congressional Digest, “Saving the U.S. Postal Service.”) Donahue said that he had to cut $22 million in operating costs by 2016 in order to salvage the agency, but agreed to a five-month delay in implementing any closures to give lawmakers time to pass comprehensive Postal Service reform.
The Senate bill, which passed by a rare bipartisan vote of 62 to 37, would maintain Saturday delivery for the next two years and impose strict rules on how the USPS shuts down its post offices and processing centers. It would also require the USPS to continue providing local overnight first-class delivery. The measure would change the way the service pays into a retiree health benefit fund, saving more than $5 billion a year, according to USPS estimates, and return to the service $11 billion in excess payments it has made into Federal retirement accounts. That money would be used to create financial incentives for about 100,000 employees to retire or accept a buyout.
The House has yet to take up Postal Service reform, and the bill it passes is expected to be substantially different from the Senate version. Oversight and Government Reform Committee Chair Darrell Issa (CA-R) has introduced a bill to require create a postal commission to oversee the shutdown of $3 billion worth of post offices and mail processing centers over the next several years. It would establish another oversight body that would take control over the USPS if the agency defaults and operates with more than a $2 million deficit for an extended period.
Senator Joe Lieberman (I-CT), a sponsor of the Senate measure, praised its passage, saying, “This great American institution, which still delivers over 560 million pieces of mail every day and helps to support 8 million jobs throughout our economy, cannot to spiral downward into bankruptcy.”
Representative Issa disagreed, saying, “While the Postal Service is actually trying to shutter some facilities it does not need, the Senate bill forces the Postal Service to keep over 100 excess postal facilities open at a cost of $900 million per year. Worst of all, the Senate bill does not stop the financial collapse of USPS, but only delays it for two years, at best, when reforms will only be more painful. The Senate’s approach is wholly unacceptable.”
Thus, the future of the USPS remains uncertain. Once the House passes its bill, the two chambers will have to negotiate a compromise, so it is likely that the bill that reaches the President’s desk will be quite different from the one backed by the Senate.