Senate Passes Plan to Give Postal Service Fiscal Relief
Published: April 25, 2012 - New York Times
WASHINGTON — The Senate on Wednesday overcame
opposition from several Republicans and passed legislation that would overhaul
the financially ailing Postal Service, voting weeks before the agency plans to
begin closing thousands of post offices and consolidating hundreds of processing
centers to cut costs.
The measure was passed 62 to 37, despite a warning
from Senator Bob Corker, Republican of Tennessee, that it would add to the national
Senators who sponsored the bill said it would provide
needed relief for the Postal Service, which said it would run out of cash if
Congress did not act.
gThis is a bipartisan bill that will bring necessary
change to the Postal Service in order to save it,h said Senator Joseph I.
Lieberman, independent of Connecticut, who sponsored the bill with Senators Susan
Collins of Maine and Scott
P. Brown of Massachusetts, both Republicans, and Thomas
R. Carper, Democrat of Delaware.
Postal worker unions gave the bill a mixed reaction.
The National Association of
Letter Carriers called it flawed because, among other things, it would cut
services and jobs. The American
Postal Workers Union agreed but said the bill would provide short-term
relief to the Postal Service.
gThere are some things that we donft like in the bill,
but itfs far better that something has passed rather than nothing,h said Cliff
Guffey, president of the American Postal Workers Union.
The Postal Service, which objected to parts of the
bill because it would limit the agencyfs ability to close facilities and cut
services, expressed disappointment in the vote. gIf this bill were to become
law, we would be back before the Congress within a few years requesting
additional legislative reform,h the postmaster general, Patrick R. Donahoe, said
in a written statement.
The bill would provide retirement incentives for
nearly 100,000 of the post officefs 547,000 workers. It also would allow the
agency to study the elimination of Saturday deliveries if it could not cut costs
in the next two years, and it would free up the agency to offer a broader range
of revenue sources like delivering beer and wine for retailers. The agency would
also recoup more than $11 billion that it had overpaid into one of its pension
Perhaps most significant, the bill would restructure
the payments the agency makes into a health benefits fund for future retirees.
Under a 2006 law, the agency has to pay $5.5 billion annually into the fund,
which the Postal Service said had added $20 billion in debt to its balance sheet
The bill would lower the amount of the prepayments and
allow the agency to stretch them out over 40 years. The Postal Service is the
only federal agency that prepays its future retiree health obligations.
Before the Senate began voting on the bill on
Tuesday, Mr. Corker and three other Republicans — Senators Jeff Sessions of
Alabama, Tom Coburn of Oklahoma and Dan Coats of Indiana — raised a point of
order. They argued that it would add $34 billion to the national
debt, including the overpayment to the pension fund.
But one of the Republican co-sponsors, Ms. Collins,
argued that the bill would not add to the debt because any spending would come
from revenue generated by the Postal Service, not from federal coffers.
The bill also would create a chief innovation officer
for the Postal Service to help it come up with new products and an advisory
commission to help it revamp its business model.
Lawmakers added provisions that would give citizens a
greater say in the closing of post offices and cap bonuses and pay for Postal
Mr. Coburn also added a provision that would limit
federal agency spending on conferences, in response to a spending
scandal by officials at the General Services Administration.
The Postal Servicefs financial woes have increased as
mail volume, particularly first-class mail, has dropped sharply because of
electronic messaging, to 168 billion pieces last year from a peak of 213 billion
in 2006. The Postal Service said volume could fall to 118 billion by 2020.
As a result, the service is losing $36 million a day,
after having generated an annual profit as recently as 2006.
A group representing large delivery companies like
FedEx and UPS, which rely on the Postal Service for some of their deliveries,
applauded the Senate vote.
gThis bill is a vital first step in pulling the Postal
Service back from the edge of a fiscal abyss,h said Art Sackler, co-coordinator
of a group called the Coalition for a 21st Century Postal Service. gThat is good
news for the Postal Service and the eight million private sector workers whose
jobs rely on it.h
Fredric V. Rolando, president of the National
Association of Letter Carriers, said the unions would turn their attention to
the House, where postal legislation is pending.
gWe are very disappointed that the Senate approved
such a flawed bill, but we are determined to continue the fight for legislation
that will provide a path to long-term viability for the Postal Service,h Mr.
Rolando said in a statement.
The House bill differs substantially from the Senate
version. It would create a commission much like the one that studied and
recommended military base closings to oversee the shutting down of post offices
and processing centers. It would also allow the Postal Service to end Saturday
mail delivery without a two-year delay.
Ali M. Ahmad, a spokesman for the House Oversight and
Government Reform Committee, which has jurisdiction over the Postal Service,
said the committee had not set a time to began working on the bill.