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Around The Grange
Postal Service Proposes Record Closings

By Nicole Palya Wood, National Grange View From The Hill (8/10/11)

  SEPTEMBER 7, 2011 --

In an attempt to cut costs, the United States Postal Service has proposed a four month, $4.8 million study looking into the closure of 3,700 post offices across the country.  

Although most experts agree that only a fraction of the proposed number will actually be closed, the move would mark the largest downsizing of the United States Postal Service in its almost 200 years in operation.

In January of this year, the postal service proposed the closing of 2000 offices and ended up meeting with such staunch legislative opposition that only 280 actually ceased operations.

Now the USPS has proposed closing office locations which take in less than $27,500 annually or replacing some of them with a "Village Post Office."

This Village Post Office business model would consist of a USPS worker placed inside a town grocery store or bank that would offer limited services such as stamp sales and shipping flat-rate items and letters.

This system of elimination is bound to have a heightened impact on those who rely on rural mail services. 

"The fact is, maintaining our nation's rural post offices costs the Postal Service less than one percent of its total budget and is not the cause of its financial crisis," Sen. Susan Collins, R-Maine, said in a comment released on July 26. "While there are some areas where postal services could be consolidated or moved into a nearby retail store to ensure continued access, this simply is not an option in many rural and remote areas. For example, Matinicus Island is about 20 miles off the coast of Maine and receives mail five - rather than six days a week - and then only in good weather. Closing this post office or moving it into a large retail facility is simply not realistic."

The USPS has been in serious financial trouble since the Federal government cut funding for the organization several years ago. 

Although not supported by federal tax dollars, the organization is still heavily regulated by Congress and unable to react to market trends like FedEx and UPS.

Without Congressional approval, the USPS cannot change postage rates, make changes to the employees retirement or healthcare funds, or reduce delivery times and days. Current mandates also require the USPS to make prepayments on retiree health benefits each year, which costs the organization about $5.5 billion annually. When private companies experience consecutive years of loss, they are able to hedge their investments to obtain liquidity and invigorate their roles in the market. Again, the USPS hands are tied in this scenario. One of, if not the largest investment of the USPS are their contributions to the Civil Service and Federal Employee Retirement Systems. The USPS has requested access to the Civil Service Retirement System and the Federal Employee Retirement System for access to overpayments USPS made, which are estimated at almost $7 billion. So far, Congress has opposed the release of these overpayments back to the USPS. 

Critics believe that the only way the United States Postal Service can survive is to either be funded by Congress or be allowed to operate as a private enterprise. There are several pieces of legislation that have been introduced in the House and Senate to make changes to the USPS but none with momentum that call for complete congressional autonomy.

For a complete list of proposed closings, please go to: http://bit.ly/qm33Ao

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