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Posted at 02:00 PM ET, 04/12/2012

GAO warns Congress again about Postal Service


(Justin Sullivan - Getty Images)
With lawmakers poised to act as soon as next week on legislation overhauling the U.S. Postal Service, a new government audit published Thursday once again warns Congress that it must act soon to help the cash-strapped agency save billions of dollars in the next four years.

The Postal Service needs congressional authorization to shrink its delivery network and renegotiate labor contracts in order to save about $22.5 billion by 2016. At the request of lawmakers, it has agreed to postpone closing any facilities until May 15 in order to allow Congress to act.

With roughly a month left until the moratorium expires, “If Congress prefers to retain the current delivery service standards and associated network, decisions will need to be made about how USPS’s costs for providing these services will be paid, including additional cost reductions or revenue sources,” according to a report published Thursday by the Government Accountability Office.

Thursday’s report is just the latest in a series of studies by the auditing agency that recount what most Americans already know: The Postal Service is losing billions of dollars annually amid declining mail volume and increasing labor costs. According to the report, first-class mail volume peaked in fiscal 2001 at nearly 104 billion pieces, but has dropped by about 29 percent, or 30 billion pieces, in the last decade. For the first time ever, in 2010 fewer than 50 percent of all bills sent to Americans were paid by mail, GAO said.

The report provides broad outlines of the leading House and Senate proposals under consideration — that should be brought up for debate and a vote in the coming weeks.


Sens. Joseph I. Lieberman (I-Conn.) and Thomas Carper (D-Del.). (Andrew Harrer - Bloomberg)
The Senate plan, cosponsored by Sens. Thomas Carper (D-Del.), Joseph I. Lieberman (I-Conn.), Susan Collins (R-Maine) and Scott Brown (R-Mass.) would delay the Postal Service’s move to a five-day delivery schedule by two years and require the agency to downsize, rather than close, its processing facilities. The report said those delays “could make it difficult for USPS to save $22.5 billion by 2016” as it hopes to do. But the Senate proposal also provides about $7 billion to provide employee buyouts of up to $25,000 to as many as 100,000 eligible workers — a plan that could help USPS meet cost-cutting goals, the report said.


Rep. Darrell Issa (R-Calif.) (Stephen Morton - Bloomberg)
The House proposal, backed by Rep. Darrell Issa (R-Calif.), among others, includes plans for a panel similar to the Defense Base Closure and Realignment and Commission that would “address some of the political resistance to closing postal facilities” and possibly help overhaul postal worker labor contracts, the report said.

The proposed commission could help alleviate some of the political pressures of closing post offices and processing facilities, GAO said, noting that “In other restructuring efforts where this approach has been used, expert panels have successfully informed and permitted difficult restructuring decisions, helping to provide consensus on intractable decisions.”

Issa’s bill would permit — but not require — USPS to move to a five-day delivery schedule six months after passage. It also could elect instead to immediately designate 12 non-mail delivery days as it prepares to end its six-day delivery schedule.

“We cannot allow political interests to trump our responsibility to restore the Postal Service to solvency and protect the taxpayer from picking up the tab for surplus facilities,” Issa said Thursday in response to the report. But his office still has not said when the bill may be considered by the full House.

For his part, Carper, the Senate’s leading expert on postal reform, said Thursday’s report “confirmed much of what we already knew — that the U.S. Postal Service has gone to great lengths to reduce the number of mail processing centers it maintains in order to adjust its operations to reflect the changing demand for the products and services it offers.”

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