Published May 08, 2012
The U.S. Postal Service is often the butt of jokes, but there's nothing funny about the agency's bottom line.
The USPS is losing up to $25 million dollars a day. Until now, taxpayers have not been on the hook for its mounting losses, but that could be about to change. A bill recently approved by the Senate would appropriate $34 billion in federal money.
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"If the post office was a business, it would be in bankruptcy," said Rep. Dennis Ross, R-Fla. "It's insolvent."
Ironically, however, Congress shares much of the blame. For years, the Postal Service begged Washington for the freedom to cut its own budget by closing post offices and cutting employees. But Congress, under pressure from rural constituents and labor unions, prevented the cuts, and the service continued to bleed red ink.
In December, the USPS said it wanted to close more than half of its mail processing centers, eliminate 28,000 jobs, end overnight delivery of first-class mail, close 3,700 local post offices and end Saturday delivery.
The Senate said no, prohibiting the Postmaster General from taking those actions altogether, or delaying them for two to three years.
For the time being, the Postal Service has a moratorium on office closings -- but that moratorium expires on May 15, absent an elusive compromise between the House and Senate.
The service is now caught between competing interests. On one side, the desire to fix the budget and stop the financial bleeding. On the other, the desire to spare small towns across America from losing their local post offices, even if they aren't making money.
The Postal Service has identified 3,700 post offices for possible closure. Click here to see if your town's post office could be affected.
Both the House and Senate plans would curtail the Postal Service's ability to close those offices, though the Senate-passed measure is far more restrictive than the one being floated in the House.
A bipartisan group of senators led by Joe Lieberman, I-Conn., and Susan Collins, R-Maine, said their plan was a "compassionate" way to reform the service, using buyouts and incentives to reduce the workforce. They also claim their bill is paid for by ratepayers, not taxpayers, and over time would save money because more employees would take early retirement.
Postmaster General Patrick Donahoe claims the Senate is stopping him from saving $20 billion. House Republicans call the Senate bill a joke, a special-interest spending binge that does nothing to reform an agency losing business every day, as more and more Americans use e-mail and electronic banking.
"Over the last six years, the Postal Service lost 25 percent of their revenues," Ross said. "We as a Congress have to look at the fact that the post office is not in the 21st century. It's still 50 years behind and we have to bring it up, modernize it and allow it to take advantage of market trends."
A competing House bill co-sponsored by Ross allows the postmaster to cut services, close offices, raise fees and force existing postal employees to pay a greater share of their own retirement. The bill faces both Republican and Democratic opposition and has yet to reach the House floor for a vote.
Unless the House and Senate compromise, the USPS could announce post office closings next week. The postmaster general has scheduled a news conference for Wednesday.