US postal reformers have reacted angrily to reports that legislation covering the restructuringof the US Postal Service is set to be delayed until the end of the year, leading to a potential
payment default by USPS.Senator Tom Carper, Chairman of the subcommittee that oversees the US Postal Service, describedreports that leading Republicans within the House of Representatives will not consider postalreform legislation before its five-week recess beginning in August as “deeply disappointing” and “irresponsible”. Republicans controlling the House of Representatives had originally tabled a debatefor the postal reform bill for July, but recent reports suggest that the legislation will now bedelayed until November or December, after the US presidential election.
“The US Postal Service USPS is obligated to pay $5.5 billion (€ 4.5 billion) to the Departmentof Treasury on 1 August. Without legislation, the Postal Service will be unable to make thatpayment and will be forced to default,” Carper claimed.
“I find these reports that the House leadership is now considering delaying action on postalreform legislation until after its August recess deeply disappointing. In light of the challengesthat face the Postal Service and the economy as a whole, the House’s continued unwillingness to acton this issue is completely irresponsible.”
He pointed out that in April, the Senate had come together to pass bipartisan postal reformlegislation. “Since then, the US Postal Service has haemorrhaged nearly $2 billion in losses in thetime that the House has sat on its hands and failed to take up our bipartisan Senate bill – or itsown bill – to reform the Postal Service,” Carper added.
Meanwhile, the House had “managed to find time to vote on any number of issues that don’t havethe ability to preserve jobs and economic activity as postal reform would”. Carper continued: “TheAmerican mailing industry employs over 8 million people and generates almost $1 trillion ineconomic activity each year and a healthy Postal Service is essential to this industry. The longerthe House delays action, the more consumers and businesses become uncertain about the future of thePostal Service, undermining confidence in the Postal Service’s future and harming its ability tobuild new business.”
He claimed the only way to protect USPS and the industry that relies upon it is for the House toact now, not wait until September or later. “I strongly urge them to act swiftly to debate and passa bill to preserve this American institution for generations to come,” he concluded.
Following the passing of the Senate bill in April, USPS said the proposed legislation includedmany “hard-fought improvements” but would “not enable all of the cost reductions that are necessaryto return the company to profitability”.
Earlier this year, the US Postal Service warned that it would lose up to $18 billion a year by2015 unless Congress grants it the freedom to raise prices, eliminate Saturday deliveries, and slowfirst-class mail by a day. The organisation said the five-year restructuring plan it presented thisyear would enable USPS to save $22.5 billion by 2016 and thus keep costs below expected revenuesfor the rest of the decade.
Under the five-year plan, USPS would close up to 252 of its 461 mail-processing centres, cuttingaround 35,000 jobs, along with 3,700 local post offices. These measures combined would eliminatemore than 100,000 jobs and save about $6.5 billion a year, USPS said, and were in addition to thepostal operator’s previous request to Congress for permission to make service cuts and reduceannual payments of about $5.5 billion (€4.2 billion) to prefund retiree health benefits.
In May, USPS announced that it was going ahead with a modified plan to consolidate its networkof 461 mail-processing locations, with almost half set to close in two phases over the next threeyears, starting this summer, while also revealing plans to loosen the next-day delivery obligationsof its First-Class Mail service, although union representatives urged members and politicians tofight the changes.
The first phase of the restructuring will result in up to 140 “consolidations” by February 2013,with “a second and final phase” of 89 consolidations currently scheduled to begin in February 2014– “unless the circumstances of the Postal Service change in the interim”.
USPS said the first phase of consolidation activities would reduce the size of the PostalService workforce by approximately 13,000 employees and, when fully implemented, would generatecost reductions of approximately $1.2 billion annually. It expected to pursue the second phase ofconsolidation activities for the additional 89 mail processing locations beginning in 2014 unlessits circumstances change.
