By Nicole Gaudiano
WASHINGTON -- To remain solvent, the U.S. Postal Service would have to offer buyouts or retirement incentives to help reduce its workforce by at least 100,000 under legislation introduced Wednesday by a bipartisan group of senators, including Democratic Sen. Tom Carper of Delaware.
The proposal, designed to help the cash-strapped service meet its goal of saving $20 billion a year by 2015, would give the service access to about $7 billion it overpaid into one of its pension funds. Those funds would go toward employee incentives -- including cash buyouts of up to $25,000 -- and debts and other obligations.
The proposal takes a cautious approach in some instances, requiring the service to evaluate downsizing before closing mail-processing facilities and to hold off on its plan to eliminate Saturday mail delivery for at least two years, using that measure only as a last resort.
It would give the service authority to increase postage rates in the future only after a study of mail classes that don't pay their way.
The bill would look for savings elsewhere, such as cuts to workers' compensation benefits for postal workers and other federal employees. And it would move home delivery in some cases from mailboxes at the door to the curb to achieve billions in savings.
"Without taking controversial steps like these, the Postal Service is simply not going to make it, and that would be terrible," said Sen. Joe Lieberman, I-Conn., chairman of the Senate Homeland Security and Governmental Affairs Committee.
Members of the committee -- Lieberman, Carper, Sen. Susan Collins, R-Maine, and Sen. Scott Brown, R-Mass. -- reached a compromise on the bill after months of negotiations. Lieberman said the committee would debate the bill next Wednesday.
Carper, who chairs the subcommittee overseeing the postal service, said the service is facing a "dire" financial situation that needs to be resolved by the end of the year.
"We need to be able to demonstrate that Democrats and Republicans and an occasional independent can govern again," he said.
Without action, the Postal Service will run out of money to deliver the mail by next summer. Projected losses for fiscal 2011, which ended Sept. 30, are estimated at $10 billion.
In September, President Barack Obama proposed allowing the service to eliminate Saturday mail delivery and hike postage rates, adding 2 cents to the current 44-cent price for first-class mail.
The service has proposed cutting as many as 35,000 positions and revising the standards for first-class mail. Officials are studying 3,700 post offices and 250 mail-processing facilities -- including the Hares Corner facility near New Castle -- for possible consolidation or closure.
The senators' bill would require the Postal Service to develop service standards to guarantee customers access to retail services and would establish a "rigorous" public comment period before closing a processing facility.
"I think we'll have the opportunity for our day in court and the opportunity to make a case and to find out if we're going to be disadvantaged in some way relative to the rest of the country," Carper said of the Hares Corner facility.
The workers' compensation provision was important to Collins. She noted that the postal service has more than 2,000 workers who are at least 70 years old and get higher, tax-free payments from workers' compensation than they would under the standard postal retirement program.
One of those workers is 99.
"He is not ever going to return to work and should be either on a lower benefit so it's more comparable to what a retired worker would receive or switch to the retirement program," Collins said.
The bill would reduce such compensation for most recipients, except for current recipients who are permanently and completely disabled and unable to return to work.
Carper said the bill is about more than cuts. It would allow the service to sell non-postal products, offer services on behalf of state and local governments and ship wine and beer like its private competitors.
"The Postal Service needs to be innovative, they have to be entrepreneurial, they have to come up with new ideas," he said.