Save The US Postal Service From Default! US Postmaster General to Beg Congress Today
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US Postmaster General Patrick Donahoe will address Congress today, during a Senate Homeland Security and Governmental Affairs committee hearing, in the hopes of persuading them to take emergency action in order to stabilize the finances of the United States Postal Service (USPS), which faces a possible default by the end of this month.
The USPS is said to be unable to meet a US$5.5 billion payment due at the end of the month, and will most likely have to shut down all operations for winter unless Congress steps in.
US Postmaster General Patrick Donahoe will address Congress today, during a Senate Homeland Security and Governmental Affairs committee hearing, in the hopes of persuading them to take emergency action in order to stabilize the finances of the United States Postal Service (USPS), which faces a possible default by the end of this month.
The USPS is said to be unable to meet a US$5.5 billion payment due at the end of the month, and will most likely have to shut down all operations for winter unless Congress steps in.
[quote]“Our situation is extremely serious,” said Donahoe in an interview with the New York Times. “If Congress doesn’t act, we will default.”[/quote]Donahoe, a 36-year-veteran of the Postal Service, wants Congress to allow the USPS to cancel anti-layoff clauses for nearly 120,000 workers in their union contracts as well as permission to replace current health and retirement benefit plans for 563,000 employees with less expensive programs.
These measures would be just a part of a series of painful cost-cutting measures to erase the USPS’s deficit, which is expected to reach US$9.2 billion by the end of this financial year.
Last month, news reports had already come in suggesting that USPS could close up to 3,700 postal locations in the country. The USPS also intends to end all Saturday deliveries as a way to cut costs.
One commonly cited cause for the USPS’s high costs is due to the legal obligation of the USPS to provide universal service, making deliveries to 150 million addresses nationwide each week. Furthermore, a 2006 law requires the USPS to pay an average of US$5.5 billion annually for 10 years to finance retiree health costs for the next 75 years.
Officials from the USPS acknowledge that apart from these cost-cutting measures, they will have to find a way for the agency to generate revenues after posting nearly US$20 billion in losses over the past four years. Some ideas include gaining the right to deliver wine and beer, placing commercial advertisements on postal trucks and in post offices, and offering special hand-delivery services for secure correspondence and transactions.
However, due to its legal obligations and constraints, the USPS will have to achieve Congress approval to save itself.
Yet, the intended measures brought up by the US Postmaster General is likely to face resistance from both members of Congress as well as from workers’ unions.
[quote]Senator Susan Collin (R) told the New York Times that, “the postmaster general has focused on several approaches that I believe will be counterproductive. They risk producing a death spiral where the postal service reduces service and drives away more customers.”[/quote]American Postal Workers Union President Cliff Guffey also called Donahoe’s plans “outrageous, illegal and despicable” in a prepared testimony, cited by the Washington Post.
[quote]“The attempt by the Postal Service to keep what it gained from our bargain and to unilaterally abrogate what the APWU gained is in utter disregard for the legal requirement to bargain with the APWU in good faith,” he said.[/quote]
