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View From the Hill: USPS still in trouble

By Grace Boatright, National Grange Legislative Director (View From The Hill Blog 10/1/12)

  OCTOBER 1, 2012 --

Just for fun, let’s talk about something other than the Farm Bill, the November elections, or Lindsay Lohan.

Yesterday, the Postal Service defaulted for a second time on their payment to the U.S. Treasury. The USPS has been telling Congress for over a year that without congressional action and assistance, they were going to be headed down the road to default and possibly even shut down altogether. Passing any kind of postal reform was/is on the laundry list of things that Congress didn’t do before they left town, and unfortunately, now it seems that the fate of the USPS is almost entirely in the hands of Congress.

“Absolutely, we would be profitable right now,” Postmaster General Patrick Donahoe said in an interview when asked if a lack of congressional action was to blame for their current problems.

The Post Office has been seeking cooperation from Congress to eliminate Saturday delivery and reduce or eliminate its prepayment requirement for future employee retirement health benefits. This year, postal losses are supposed to hit a record $15 billion. According to Donahoe, these two missed payments, that together equal $11.1 billion, make up the majority of that loss. He believes the money saved from stopping Saturday delivery could have offset the other $3 billion.

On a higher note however, Donahoe said that the USPS will barely avert immediate bankruptcy through a series of early retirement incentives, reductions in employees, and a mild boost in productivity. While that might be good for the USPS, it’s obviously not so good to the employees who were laid off due to these financial woes, or the customers who will inevitably see longer lines at the Post Office.

Postal unions, most predominantly the National Association of Letter Carriers, agree that Congress is to blame for this situation, but disagree on how exactly to save the USPS. According to the NALC, eliminating Saturday delivery would not save enough money to matter and would only hurt rural residents and elderly citizens, both of whom rely on the USPS for prescription drug delivery and other essential goods.

Of course, in the interest of our members, the Grange has encouraged the USPS to keep Saturday delivery as well.

However, despite its default on these two payments, the USPS plans to make a payment of $1.4 billion on October 15th for workers’ compensation. They have also guaranteed the public that, for now, these defaults shouldn’t affect daily mail delivery.

Like so many things, postal reform is on the agenda for when Congress returns for the lame duck session in November. Let’s hope they address the issue because, if they don’t, we may not have a USPS in 2013.

-Grace Boatright
National Grange Legislative Director

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