Senators Appear Split on Postal Service's Future
Senators appeared split on Thursday about how to address the Postal Service's worsening financial condition, as lawmakers with oversight of mail delivery reviewed possibly closing facilities, ending Saturday mail delivery, cutting workers and restructuring costly payments to an employee retiree health benefits program.
Despite disagreements, lawmakers and Postal officials acknowledged that President Obama needs to sign legislation restructuring the Postal Service's finances by the end of September in order to ensure future mail operations.
The Postal Service suffered a $2.4 billion loss in the quarter that ended June 30 and forecasts a $7 billion loss for the fiscal year. Mail volume also dropped 12.6 percent over a nine-month period, due in part to the economic recession that began in 2007 and the wider use of the Internet.
Congress mandated in 2006 that the Postal Service make pre-payments to a retiree health benefits program for future retirees. The payments for current and future retiree benefits will total roughly $7 billion this year. The Postal Service's balance sheets were in better condition back in 2006 and lawmakers sought to have it prepay into the benefits program knowing that its financial condition would probably worsen in the future.
The House and the Senate will consider competing measures to relax the payment requirements after the August congressional recess, but the bills would provide only temporary relief.
At Thursday's hearing, Sen. Thomas Carper (D-Del.), who chairs the Senate subcommittee with Postal Service oversight, urged colleagues to end their resistance to closing post offices. The Postal Service operates 35,000 retail facilities and 400 processing plants, he noted.
"We simply don't need all of these facilities in this day and in this age. All too often, Congress puts up roadblocks whenever the Postal Service even mentions that it might be time to close or consolidate some facilities. We just can't afford to do that either."
Sen. Joseph I. Lieberman (I-Conn.) concurred, saying any resistance to closures will only increase the financial strain on Postal operations.
"Our constituents aren’t going to be happy, but every time they express their unhappiness, what we have to say is that it’s either going to mean we’re going to have to raise your taxes… or we’re going to have to put it on a government credit card, which is an act of irresponsibility."
Quoting from a report in Thursday’s Washington Post, Sen. John McCain (R-Ariz.) blasted Postmaster General John Potter for not committing to a specific number of post office closures.
"We have the right to ask for specific proposals so we can enact a new law," McCain said, faulting Potter and the Obama administration for the lack of specifics.
"A lot of this is due to the fact that American has changed. Just as we went from horse and buggies... we’ve gone to the Internet and e-mail and text messaging and Twitter. The Post Office has got to adjust to it or they will go the way of the horse and buggy," McCain said.
Though Potter would not commit to a specific number at a Wednesday news conference announcing the financial results, he said some urban facilities are likely to consolidate certain operations while others will vacate expensive locations so the Postal Service can sell the properties.
Sen. Susan Collins (R-Maine), the panel's senior Republican, expressed skepticism about possible service cutbacks.
"Is that really the right response to this crisis? The question is, will it really make a big difference in the cost-structure to the Postal Service?" She noted that if the Postal Service were to close all of the branches and stations on the list – which is not the plan – it would cut operating costs by less than 1 percent.
"The Postal Service cannot expect to gain more business if it's reducing service," Collins said.
Potter, touting the Postal Service's 35,000 locations nationwide, suggested to lawmakers that it should be allowed to consider providing other commercial services at post offices. He noted that postal services around the world offer several types of services, including banking, cell phone services, insurance sales and the ability to register for a new driver's license. Potter said the Postal Service is not currently considering other commercial opportunities.
| August 6, 2009; 10:04 AM ET
Categories: Congress, Oversight
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