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 debt.

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 donft like in the bill, but itfs 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 agencyfs 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 officefs 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 funds.

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 since 2007.

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 Service executives.

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 Servicefs 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.

A version of this article appeared in print on April 26, 2012, on page A13 of the New York edition with the headline: Senate Passes Plan to Give Postal Service Fiscal Relief.