Washington: It has endured for more than two centuries amid technological revolutions, civil wars, and tectonic shifts in society and geography. But the days may be numbered for America’s national postal service if the US Congress doesn’t act fast.
The US Postal Service (USPS), which predates the US itself, is careening toward bankruptcy in the wake of a record $15.9 billion loss this year that has ignited fierce debate over the government’s role in preserving an iconic American institution.
“What we’re facing now is our own fiscal cliff,” US Postmaster General Patrick Donahoe said in televised comments Wednesday.
Donahoe implored Congress to pass legislation by the end of the year that would help it free up capital and bolster its entrepreneurial flexibility.
“If they act now, we’ll get this whole thing behind us and we can be profitable and then focus on growing the postal business,” he said.
The travails faced by the agency underscore a deep ideological divide in the United States over the role of government.
Conservative-minded critics – including Republican lawmakers – call the agency an unwieldy, inefficient behemoth incapable of competing with private couriers like FedEx and United Parcel Service (UPS). American taxpayers, they say, should not act as a fiscal backstop if it can’t survive on the open market.
Supporters, meanwhile, say the agency was set up to fail thanks to a 2006 law requiring it to prefund retiree health benefits 75 years into the future-to the tune of $5.5 billion annually for 10 years. No government agencies or private-sector businesses are forced into such onerous terms, they say.
“The USPS largely faces a manufactured crisis,” Warren Gunnels, senior policy adviser to US Sen. Bernie Sanders, told RIA Novosti.
Sanders, an independent from the state of Vermont, has proposed legislation that would lift the burdensome prefunding mandate, recover at least $50 billion in overpayments to retiree pension funds, and remove a ban preventing the USPS from making money on services unrelated to mail-such as notary services and shipping wine and beer.
If these measures were enacted, Gunnels said, the USPS could be operating in the black.
Lorelei St. James, director of physical infrastructure issues at the US Government Accountability Office (GAO), declined to comment Wednesday on Gunnels’ assertion.
Her agency plans to release a report early next month assessing various proposals by US lawmakers to deal with the postal service’s retiree benefits funding, said St. James, the GAO’s point person for postal issues.
Sanders’ bill did not gain traction in the US Senate, but he and his colleagues in the Democratic-controlled upper chamber of Congress passed a postal reform bill in April that would reduce the level of prefunding for retiree benefits and give it a 40-year window to make the payments.
The bill now goes to the US House of Representatives, where legislation sponsored by members of the Republican majority is focused more on introducing austerity measures to the postal service’s operations.
One of the sponsors of that bill, House Oversight Committee Chairman, Rep. Darrell Issa, derided the Senate bill earlier this year as a “special interest binge” that “does not stop the financial collapse of USPS.”
But Issa believes there is “a good chance” that Congress will pass “comprehensive postal reform legislation” by the end of the year, a committee staffer told RIA Novosti on Wednesday.
To be sure, the agency faces significant problems in its business operations beyond funding its retirees’ health benefits.
Revenues fell off a cliff in 2007 with the onset of the global economic crisis, and at the same time the agency was hit by a steep drop in demand for its first-class mail services-in large part because companies and consumers shifted to paperless billing online.
“Those bills used to be mailed out by the post office, and then consumers would mail them back,” said St. James of the GAO. “That market is now severely eroded.”
Donahoe, the US postmaster general, said in Wednesday’s televised interview with CBS News that the agency lost 25 percent of its first-class mail volume over the past five years.
His agency could recover rapidly if Congress would remove the prefunding mandate for retiree health care and allow the postal service to cut Saturday delivery of mail, but not packages, Donahoe said.
He added that the agency doesn’t cost the American taxpayer a dime.