USPS Faces its Own Fiscal Cliff
January 6, 2013 - 1:29 pm
The 112th Congress adjourned last week without addressing a critical issue; what to do to prevent the US Postal Service from tumbling over their own fiscal cliff and crashing into the rocks of insolvency.
The USPS lost $16 billion last year — $25 million a day. This tidal wave of red ink is not entirely their fault. Several years ago, Congress mandated that the post office pre-fund retiree benefits for all future workers over the next ten years. The USPS says that this represents about 70% of the losses they experienced — an intolerable burden given the huge drop off in First Class mail delivery as a result of the explosion of email.
They have already defaulted on two payments to the federal government and they say that they can operate another 9 months before the kitty is empty. The Senate passed a bill that would have eliminated Saturday delivery while closing hundreds of small. rural post offices. But the House refused to take it up, believing it to be a band aid that would only delay the inevitable.
It’s important that they prioritize postal service legislation,” said Art Sackler, head of the Coalition for a 21st Century Postal Service, which represents mailers. “We don’t want to have it get lost again in the big shuffle.”
As the 112th Congress expired this week, so did the proposed legislation that would have provided some legislative direction for the Postal Service as it seeks a more profitable business model.
In a prepared statement, Postmaster General Patrick Donahoe called Congress’ inaction disappointing and said he would be looking to the new set of lawmakers to make postal reform legislation a priority.
Some of the players are changing. The Senate bill succeeded in large part because it was pushed by a bipartisan group of members, several of whom had experience and knowledge on postal issues.
Joe Lieberman, a Connecticut Independent who led the Senate Committee on Government Affairs, has retired. Massachusetts Republican Scott Brown lost his bid for re-election, and fellow Republican Susan Collins will no longer sit on the relevant committee.
That means all eyes are on Thomas Carper, a Delaware Democrat who now leads the government affairs committee and is expected to lead the Senate push for legislative reform in the new Congress.
House Republicans last year criticized the Senate bill, which they said would only delay the Postal Service’s demise, but were unable to get enough support to pass their own bill.
Carper and Republican Representative Darrell Issa of California, the chairman of the House Oversight and Government Reform Committee and a lead voice on postal legislation last year, said in a joint statement on Thursday they were committed to working together to reform the postal service.
Sackler said his group expects that the compromises reached by the previous Senate will be reintroduced in the new Congress.
Some of the compromises, he said, included delaying the ending of Saturday mail delivery for a year while giving the Postal Service time to figure out a profitable business model, as well as spreading the funding of the future retiree health benefits program over 40 years, up from the current 10-year requirement.
The Senate bill contained a $33 billion bailout to keep the USPS solvent. But without further reforms, it is likely that the Postal Service will keep coming back for more — a 20th century institution that seems unable or unwilling to address its 21st century problems.