Sep 15 2011
By Nicole Gaudiano
WASHINGTON -- When it comes to addressing the U.S. Postal Service's financial crisis, Sen. Tom Carper isn't afraid to be the bad guy.
Proposals such as ending Saturday delivery and shuttering post offices are unpopular with some lawmakers. But Carper, who chairs the Senate subcommittee that oversees the Postal Service, says such cost-saving measures are necessary for the service to survive.
"They have too many employees, they have too many post offices and they have too many mail processing centers," the Delaware Democrat said.
The Great Recession and the public's transition to electronic communications have left the Postal Service in dire financial circumstances. If Congress doesn't act, the service could default on key obligations later this month.
A 2006 law requires the Postal Service to prepay its future retiree health benefits, which cost at least $5.5 billion. That check is due Sept. 30, but there's no money to pay it. By August, the service could go out of business.
Carper says he has "hounded" administration officials and appointees to intervene. But until now, the issue has taken a back seat to other urgent matters, such as raising the debt ceiling.
President Barack Obama's administration asked lawmakers on Tuesday to delay the Postal Service's prepayment requirement for 90 days. Administration officials are working on a financial overhaul plan for the post offices that will be part of a broader White House debt reduction proposal Obama plans to submit to Congress.
"In a situation where you've got a tepid economic recovery and the prospects for the future are still not bright, the idea of the Postal Service going under late this year or early next year and putting at risk millions of jobs, that's not what we want to do," Carper said.
Legislation that Carper proposed in May would make it easier for the Postal Service to end Saturday mail delivery, close post offices across the country (the service has proposed no closings in Delaware), and access tens of billions of dollars it's overpaid into two retirement funds over several decades. Currently, the service can't use that money for other expenses.
The administration on Tuesday proposed returning a small portion of the overpayments -- $6.9 billion -- but left it up to Congress to pass legislation to return the rest.
Carper's bill would redirect those funds toward the annual retiree health care pre-payments, which account for almost all of the service's recent year-end losses. It also would help the Postal Service generate new revenue by allowing it to ship beer and wine -- as FedEX and UPS do -- and sell certain non-postal products.
"We need to act so that the Postal Service can save itself," Carper said on the Senate floor Wednesday. "We don't need to bail them out. We need to let them act like a real company."
The service is seeking congressional approval for comprehensive reforms, including the elimination of 220,000 jobs through attrition and layoffs.
Carper says layoffs won't be necessary. He thinks the service could reduce its workforce with retirement incentives, just as the auto industry did, if it had access to its pension overpayments.
"I am amazed at how many people from Ford, Chrysler and GM responded to incentives to retire," he said. "The goals were aggressive and they met their goals. I don't think there's any reason to think the same thing couldn't happen here."
It's unclear whether House members would be willing to return pension overpayments to the Postal Service. Legislation by Rep. Daryl Issa, R-Calif., would allow an outside board to reform postal finances if the service defaults, but does not include a provision for dealing with overpayments.
Issa, who chairs the House Committee on Oversight and Government Reform, considers "overpayments" a misnomer for what he says would be a retroactive recalculation of pension liabilities that would require changing the law, said Ali Ahmad, an Issa spokesman.
"The committee's position is, if you adopt the Carper bill as it is, it results in a multibillion-dollar bailout of the Postal Service," Ahmad said. "If you take liability away from the Postal Service, you add it to the taxpayer."
The Postal Service's Office of Inspector General, the Postal Regulatory Commission and two accounting firms have found that the Postal Service has overpaid at least $50 billion.
Independent Sen. Joe Lieberman of Connecticut, who chairs the Senate Homeland Security and Governmental Affairs Committee, said at a hearing Tuesday that returning those funds is "not going to be a slam dunk in this Congress.
"If that doesn't happen, we really need to put our heads together," Lieberman said.
The committee's top Republican, Sen. Susan Collins of Maine, supports returning overpayments. But she opposes closing post offices in rural or remote areas. And she says eliminating Saturday mail delivery would hurt businesses, ranging from home delivery medication companies to weekly newspapers.
Carper's bill would require the Postal Service to develop a plan to expand alternate retail options, such as kiosks or stations in grocery stores. It would also require a plan for developing a service standard that would guarantee all customers, especially in rural areas, a minimum level of service.
Asked why the bill has no co-sponsors, Carper said most people don't pay attention to postal issues. And he said there's something in his bill to make every interest group unhappy.
"But it's a comprehensive solution and it calls for a little bit of shared sacrifice from just about everybody," he said. "It may be the only comprehensive solution out there that actually fixes the problem.”