WASHINGTON (AP) — With big postal cuts looming, the
Senate is deciding whether to stabilize the ailing U.S. Postal Service
with a short-term cash infusion while delaying most decisions on closing
post offices and ending Saturday mail delivery by requiring further
review.
The mail agency, teetering on the brink of bankruptcy,
says it needs to begin closing thousands of low-revenue post offices and
mail processing centers this year as part of a billion-dollar
cost-cutting effort to become profitable again by 2015. But local
communities are fretting about the economic impact and tens of thousands
of layoffs, drawing the concerns of lawmakers in an election year.
Late
last year, Postmaster General Patrick Donahoe agreed to delay closings
until May 15 so that Congress would have time to pass legislation to
shore up the agency’s finances.
The bill being debated on the
Senate floor this week was recently modified to take into account the
concerns of mostly rural states. For instance, it would:
—Cut in
half the number of mail processing centers the Postal Services currently
wants to close — from 252 to 125 — allowing more U.S. areas to maintain
overnight first-class mail delivery for at least three more years.
Currently there are roughly 500 mail processing centers.
—Slow if
not stop many post office closings by forcing the agency to consider the
special needs of rural communities and undergo additional layers of
regulatory approval. For instance, the Postal Service might have to
downsize rather than close facilities, or factor in whether rural
residents might have poor Internet service or have to travel longer road
distances should a post office close.
—Require the Postal Service
to wait at least two years before it could reduce mail delivery to five
days a week, a cut that is being urged by the Obama administration and
that could save between $2 billion and $3 billion a year.
In the
meantime, the Postal Service would get a cash infusion of roughly $11
billion, basically a refund of overpayments it made in previous years to
a federal retirement fund; the agency could use the money to pay down
debt and offer buyouts to 100,000 postal employees. It would be allowed
to make smaller annual payments into a future retiree health benefits
account, which currently amounts to more than $5 billion a year; get
more flexibility to cut worker compensation benefits; and be required to
establish a chief innovation officer to find new ways to bring in
postal revenue.
Left out of the bill was a proposal to raise the
price of a first-class postage stamp by 5 cents, to 50 cents, to help
pay for the added cost of keeping low-performing post offices and mail
processing centers open. Estimated to bring in $1 billion, the rate
increase was omitted due to concerns that a price increase would be
counterproductive by pushing more consumers to cheaper alternatives of
delivery, such as the Internet.
The Senate measure "does not rule
out some cutbacks in services or post offices, but it would require USPS
to exhaust all other options beforehand and ensure that its decisions
are based on sound planning," said Sen. Joe Lieberman, I-Conn., a bill
co-sponsor.
"We believe this approach offers the best hope for
stabilizing the Postal Service and putting it on solid footing
long-term, without dramatic and perhaps self-defeating cutbacks in
service," he said.
The Senate planned to debate the measure for
the next several days. The House has yet to begin consideration of a
different version of a postal bill, which seeks in part to create a
national commission that would make major decisions on postal cuts.
The
measure comes as the mail agency has been rocked by steadily declining
mail volume as people and businesses switch to the Internet in place of
letters and paper bills.
Already $12 billion in debt, the mail
agency says it could run out of money for day-to-day operations as soon
as this fall, forcing it to shut down some of its services. The mail
agency forecasts a record $14.1 billion loss by the end of this year;
without changes, it says annual losses will rise to over $21 billion by
2016.
At stake are more than 100,000 jobs, part of a postal
cost-cutting plan to save some $6.5 billion a year by closing up to 252
mail-processing centers and 3,700 post offices. In a report released
last week, federal auditors stressed that "dramatic changes" were needed

to stem the Postal Service’s mounting debt and that the agency’s
proposal to close mail processing centers was an important part of
accomplishing that goal.
The report by the Government
Accountability Office also noted the challenges of making postal cuts
due to community opposition. Hundreds of postal employees in cities
around the nation in recent weeks have rallied to draw attention to the
proposed cuts and urge lawmakers to oppose them.
Donahoe has said communities on the final closure list will be notified in July.
"The
Postal Service is at a crossroads. Our business model is broken,"
Donahoe recently told a House hearing. He has previously criticized the
Senate measure as offering only a short-term revenue fix. "We have
insufficient revenue to cover our costs … If the Postal Service were a
private company, we would be engaged in Chapter 11 bankruptcy
proceedings."
The Postal Service, an independent agency of government, is subject to congressional
control on major aspects of its operations.
Copyright 2012 The Associated Press.