Facing default, Postal Service turns to Congress

WASHINGTON - The postmaster general is delivering a message to Congress: Help save the United States Postal Service.

Postmaster General Patrick Donahoe is among the witnesses scheduled to appear Tuesday afternoon before the Senate Homeland Security and Governmental Affairs Committee to discuss the Postal Service's mounting debt.

The USPS is facing a second straight year of losses of $8 billion or more. A decline in mail because of the Internet (circulation of mail is down 22 percent compared to five years ago) and the loss of revenue from advertising amid the economic downturn have taken a toll on the agency.

Postal officials say they will be unable to make this month's $5.5 billion payment to cover future employee health care costs because the agency will have reached its borrowing limit and doesn't have enough cash.

The USPS is a quasi-government run agency that receives no federal money and relies on postage to be self-funding.

Calling the situation "serious," Donahoe told The New York Times, "If Congress doesn't act, we will default."

Among the cost-cutting measures being considered: Eliminating Saturday deliveries, shutting up to 3,700 postal locations, and cutting as many as 120,000 workers - almost 20 percent of the Postal Service's work force.

U.S. Postal Service worker Magda Aguirre moves cartons of mail at the U.S. Post Office sort center on August 12, 2011 in San Francisco.
Justin Sullivan/Getty Images

Some changes would require changes in law. Postal service officials say, for example, they are legally required to provide universal service to 150 million addresses nationwide every week. Eliminating Saturday delivery or other services will require new legislation. Allowing mail trucks to make wine and beer deliveries might also bring in more revenue.

Drawing the ire of the postal workers' union is a website maintained by the House Committee on Government Oversight and Reform, which promotes the Ross-Issa Postal Reform Act. The website, "Saving the Postal Service," calls for no taxpayer bailouts, and would unilaterally rewrite collective bargaining agreements, cut reduced rates for non-profits and political committees, set up a commission to decide on closing of post office locations, and raise revenue by selling advertising space on mail trucks and in post offices. [There is no mention in the bill of eliminating lawmakers' franking privileges.]

APWU President Cliff Guffey chastised Rep Darrell Issa, R-Calif., for "wasting taxpayer money" with the site, and said the proposed law "would destroy the Postal Service as we know it."

Labor represents 80 percent of the agency's expenses, and critics of the union say postal workers pay less for their health benefits than other federal workers. Workers are also protected against layoffs.

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