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Senators Appear Split on Postal Service's Future

By Ed O'Keefe

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.

By Ed O'Keefe  | August 6, 2009; 10:04 AM ET
Categories:  Congress, Oversight  
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We need to stop "fixing" an obsolete system every couple of years. Instead of getting mail hand delivered 6 days a week, we need to start hand delivering mail 3 days a week. It won't be the end of the world if I got home delivery of my mail on Mon, Wed & Fri. or Tue. Thru & Sat.
This would be a true plan for the future. If we started it now, we could comfortly "grandfather" it in over a period of a few years. Who knows, the price of a stamp might even drop.

Posted by: JoeNTx | August 8, 2009 12:04 PM | Report abuse

"Who knows, the price of a stamp might even drop.

a stamp is 44 cents.

that's nothing.
you cna't get a candy bar for that, but you can get door to door delivery from florida to alaska.

it's a great deal.

Posted by: newagent99 | August 8, 2009 7:46 PM | Report abuse

Remember the days when the Post Office was alive and well? THen George Bush took office and decided to bust all the unions, including the post office, which had a very strong union at that time. The big boys made out like bandits, of course, and this is the end result. Again, the Obama admin needs to boot the Bushies.

Posted by: pkbishop | August 10, 2009 11:03 AM | Report abuse

It's a changing paradigm (email) high oil prices (mainly last summer) and the recession which are hurting the USPS, not the union or lack of it.

Less articles are being shipped and that is about all there is to it.

Posted by: JRM2 | August 10, 2009 5:23 PM | Report abuse

Three days a week delivery? I disagree. Cheaper price for postage? Yeah, just like we received cheaper telephone service and better customer service when they got rid of the Ma Bell monopoly. Some things are better left as a monopoly. What have you seen that has provided better customer service for less money these days? We can't even get a real person to talk to? What about full service at the gas pump, check your oil, wash your windshield, put air in your tires? Where did that customer service go? The last great customer service is receiving your mail six days a week at your house for 44 cents a stamp. What can you buy for 44 cents these much is the electric bill you pay to run that computer you use? How much is the internet connection service? How much is your tv cable bill....44 cents...I don't think so! There are still people out there who are educated and still read books, newspapers, magazines. In rural areas, which are increasing as the economy folds, to raise gardens, fruits, chickens etc... they depend on not having a nearby source to buy their items since the Mom and Pop stores have also dwindled thanks to progress. Is it really progress, we pay out the nose for all services we receive today...and with out the customer service we used to get. Seems like we have regressed more than progressed. I say keep the last of the customer service programs the government provides, as you sure don't get that same service from the private sector. That's right, you don't get customer service from UPS or FedEx, who charge premium prices to deliver outside of a city or to homes....I'll bet you haven't checked the surcharges that these companies have added yearly for delivery to homes. As most private industry looks only to where the most profit is...if the Postal Service goes, so does anything for under $1.00. When have you mailed anything using UPS or FedEx for less than a dollar...they don't even start that cheap. You better think hard on what has happened since the demise of Ma hasn't gotten better, just more expensive.

Posted by: jwkzyf70 | August 11, 2009 10:07 AM | Report abuse

Again, a part of the US Government owned by Congress who was growing the Federal hand out programs to people who would not work so they didn't havre the time to over see the post office. So now they are going to destroy a part of government that actually worked.

Posted by: jackolantyrn356 | August 11, 2009 10:46 AM | Report abuse

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