USPS Crisis Could Be Averted As Senators Announce Solvency Plan

WASHINGTON -- Senators announced a bipartisan plan Wednesday to help keep the financially ailing Postal Service solvent and continue six-day mail delivery for at least two more years.

The proposal would lift the agency "from the brink of bankruptcy," said Sen. Joe Lieberman, chairman of the Senate Homeland and Governmental Affairs Committee.

The Postal Service lost $8 billion last year and could report even larger losses when its 2011 budget year report comes out in mid-November.

"We're not crying wolf here" about the agency, said Sen. Susan Collins of Maine, the top Republican on the committee.

Lieberman said the committee next week would take up the proposal, which also would encourage cuts in postal office staffing and refund agency overpayments to the federal retirement system.

The Postal Service said it welcomed the proposal.

Joining in the announcement were Sens. Tom Carper, D-Del., who heads the subcommittee with jurisdiction over the Postal Service, and Scott Brown of Massachusetts, the top Republican on that panel.

A separate overhaul plan sponsored by Rep. Darrell Issa, R-Calif., is awaiting action by the full House. Issa said he looked forward to working with the Senate on resolving postal problems.

According to the Senate bill:

_The Postal Service would receive a refund of nearly $7 billion it has overpaid into the Federal Employee Retirement System.

_The agency would be required to use part of the refund to set up a buyout program aimed at reducing staff by 100,000.

_Agency payments of about $5.5 billion into an account to fund future retiree health benefits would be reduced by spreading out the payment schedule.

_The postmaster general could negotiate with unions on a possible alternate health care system that would cost less.

_Mail delivery would have to continue at six-days-a-week for at least two years. After that, if the Postal Service wanted to reduce deliveries to five days, the independent Postal Regulatory Commission would have to verify that other cuts have been made and the savings still were not enough to ensure financial viability.

_The workers' compensation program would be overhauled. Currently the Postal Service has 2,000 workers over age 70 receiving workers' compensation. Switching them to retirement programs could save money.

"Without taking controversial steps like these, the Postal Service is simply not going to make it, and that would be terrible," Lieberman said.

Mail volume is down 22 percent since 2007, largely because of the combination of people switching to the Internet to communicate and pay bills. The recession has discouraged advertising mail.

"Jobs are at stake," said Collins.

The Postal Service is at the center of a $1.1 trillion mailing industry that employs 8.7 million people in direct mail, printing, paper-making, catalog sales, fundraising and other businesses.

Art Sackler of the trade group Coalition for a 21st Century Postal Service said the Senate plan was "smart and balanced," while Tony Conway of the Alliance of Nonprofit Mailers believe it would "provide needed relief for the Postal Service and ensure the continuation of critically important mail delivery."

Reed Anfinson, president of the National Newspaper Association and publisher of the Swift County, Minn., Monitor News, said the measure "takes a critical step toward a stable Postal Service."

Comments

[MichaelRCooke]

09:58 PM on 11/26/2011

Not notice of removal of the 'regulation' that the Postal Service must pay 70 years pension in advance for every employee - a standard no private industry matches. And Yeah, I may not have the number exacly - but it's roughly accurate in its improbability. The regulation exists simply to crush the postal service, and yes, the over payment is being refunded, but not the regulation removed. And the regulation is the problem.

Allow the postal service the same deal as the Pentagon as it relates to pension - asn see how competitive it can be, see how they can hire more employees rather than shed employees and become very competitive! I don't know that either - but get rid of this stupid regulation and give the Postal service equal opportunity to demonstrate it can compete with private enterprise!

[steinpiaz]

01:14 PM on 11/25/2011

Many people don't really understand how much the USPS helps American business and consumers. I'm American, but live in Canada and do a fair bit of online shopping (mostly books, but other things as well). Canada has privatized their postal system and for me to order a book from a Canadian bookstore 30 miles away the postage costs around $12.50. To order the same book from the US it's around $6.00. To order that book from the United Kingdom costs around $3.50. So, where do you think I order from?

There are millions of small American businesses doing huge international sales volume via Ebay, Amazon, etc and the postal service is key to their ability to survive and compete in the international market place. If the US raises postal fees too high these businesses, like many others before them, will be overrun by competitors in the country that has the biggest willingness to subsidize its home industries. And, that would be China.

Additionally, having the USPS in the game keeps UPS & FedEx honest and more competitive. In the states both UPS and FedEx rates are almost identical to USPS and US shipping costs are fairly low. But in Canada where they have no real competition from Canada Post, UPS is super expensive. This has had a very negative impact on Canadian small "mail order" businesses (which are virtually non-existant anymore). It also results in vastly more expensive costs for Canadian consumers.

[kyle76066]

06:36 AM on 11/13/2011

"Mail volume is down 22 percent since 2007". I've heard at least once a month for the last 22 years, that mail volume is down.
Recently a Window Clerk told me, that in the last decade, UPPER management has grown by 300%.
I see a different problem with the U.S.P.S., and if you believe management, it's your own fault.

[bereasonable0]

12:21 PM on 11/08/2011

How about doubling the cost of bulk mail ? It would either add revenue or cut down on the wasted paper that floods the system.

[dakotanprudle]

02:21 AM on 11/03/2011

Eventually there will be no mail delivery as we know today, the USPS will continue to lose money as everything will be done electronically which alot is done already, so why continue to prop it up and waste more money by delaying the inevitable, more waste as I see it.

[springsm]

06:59 PM on 11/02/2011

The Congress if they had the will, have the way. Recall the last minute bill that was passed just as Christmas break was happening and Dennis Hastert brought the bill to the house. Prepaying retirement for the next 75 years for all postal employees BEFORE anything else. It is an egregious iilmoral, unethical vote. It passed with some dinkhead dems voting for it too...but it was not thought out, it was done at the last minute and it was primarily to break the PO so that private business could take over. They basically would not be broke except for this. The media outlets surely don't want to name this one either.

[demisfine]

06:43 PM on 11/02/2011

Finally!!!
Something we can all agree upon, and something worth doing ASAP.

[Chazz280V]

06:40 PM on 11/02/2011

It's the oldest institution in our country. If the CONServatives didn't mess around with it back in 2006, they wouldn't be in such a dire situation in the first place. Simply reversing that legislation could fix the problem.

[dfranz]

06:09 PM on 11/02/2011

The Republicans under Bush found they couldn't simply eliminate the Postal Workers Union so they decided to destroy the post office instead by forcing unreasonable and unwarranted cash surplusses for union benefits.

It's the basic Republican strategy. If they can't do something straight forward, they do it underhanded.

[AJH]

06:37 PM on 11/02/2011

I have to believe that it provides the greatest value to rural "red state" america. As someone who grew up in a "town" whose only edifices were a general store and post office and vounteer fire station.

[henrypapillon]

04:33 PM on 11/02/2011

In short, the USPS is in trouble because the Congress keeps sticking its nose in and requiring special conditions for it not imposed upon private companies. If it wants the health insurance changed, why negotiate it, pass a law and that will be the policy---case closed.

[SantaMonican]

03:41 PM on 11/02/2011

Now, if lawmakers could only get along like this all of the time.....

[henrypapillon]

04:35 PM on 11/02/2011

Yeah, but that was only for a recommendation out of a committee. Now it goes to the full floor , where the Republicans will try to make political hay out of it and it will be held up by a filibuster until the situation gets critical, then they will finally pass a stopgap measure keeping the USPS from shutting down for 60 days and...............etc.