CCAGW Calls for Congress to Deliver on Postal Service
(Washington, D.C.) – Today, in response to the United States Postal Service’s (USPS) announcement that it will default on its future retiree health benefit payment due August 1, the Council for Citizens Against Government Waste (CCAGW) again slammed Congress for failing to enact a meaningful set of structural reforms that would improve USPS’s fiscal health. The Postal Service, which lost $8.5 billion in fiscal year (FY) 2010, $5.1 billion in FY 2011, and $3.3 billion in the first quarter of FY 2012, is literally on the brink of financial ruin and, as with all of the nation’s fiscal problems, Congress is ignoring the problem as it grows increasingly critical.
On April 22, 2010, former Postmaster General (PMG) John Potter announced that the USPS would lose $238 billion over the next 10 years. In a November 21, 2011 speech before the National Press Club, current PMG Patrick Donahoe pointed out that “roughly 25,000 out of our 32,000 Post Offices operate at a loss.” He added that thousands of post offices have less than $20,000 in annual revenue yet cost more than $60,000 to operate, and many of these unprofitable locations are a few miles away from another post office. He noted the Congress’s refusal to permit the USPS to close any post offices, or address the USPS deficit in a timely way.
Unfortunately, the Senate’s latest attempt to do something – anything – about postal reform is just another delay-and-defer action that allows the agency to get even closer to a full-blown taxpayer bailout. The 21st Century Postal Service Act (S. 1789), sponsored by Sens. Scott Brown (R-Mass.), Tom Carper (D-Del.), and Susan Collins (R-Maine) passed in the Senate on April 25, 2012 by a vote of 62 to 37. The bill delays common-sense changes to USPS operations, like the long-overdue closure of post offices and mail processing facilities, as well as ending six-day mail delivery. It would instead reduce the number of possible processing facility closures from 252 to 125, add several complex requirements to the process for post office closings, and require USPS to wait two years before stopping Saturday mail delivery. In addition, the USPS would be given access to an $11 billion cash infusion, drawn from “overpayments” made in previous years to a retirement fund, to be used as cash incentives to employees for early retirement. The Senate bill also sanctions the USPS entering into new lines of non-postal businesses which are already well-served by the private sector. Postal reform legislation in the House, H.R. 2309, co-sponsored by Reps. Darrell Issa (R-Calif.) and Dennis Ross (R-Fla.), would be a vast improvement over the Senate version, allowing the USPS to shutter underused facilities and shift to a five-day delivery schedule (slated to save $3.3 billion over four years). But the Issa-Ross bill also implements vital structural changes the USPS needs to survive without a taxpayer bailout by giving postal management the ability to shrink the USPS’s swollen workforce, institute flexibility and efficiencies in the work rules, and renegotiate contracts if necessary.
“This financial meltdown at the USPS is completely preventable,” said CCAGW President Tom Schatz. “Congress should adopt the boldest possible reform to avert yet another massive taxpayer bailout.”
The Council for Citizens Against Government Waste (CCAGW) is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.