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Posted at 12:53 PM ET, 07/12/2012

Postal Service reform not expected before August, likely killing ambitious overhaul this year


(Justin Sullivan - GETTY IMAGES)
A congressional solution to the financial woes faced by the U.S. Postal Service won’t be considered by House lawmakers before they leave for a month-long August recess, likely killing ambitious plans to overhaul the nation’s mail system this year.

The lack of a decision so far by House Republican to hold a vote on overhauling postal operations means lawmakers are once again likely to pass a short-term stop-gap measure to shore up postal finances, but not address longer-term structural and financial concerns, congressional aides and industry observers said Thursday.

The Senate passed a postal reform package in late April and postal officials and mailing industry leaders hoped the House would move quickly to pass a competing package and negotiate a final bill before the fiscal year ends Sept. 30. But House Republican aides and industry observers confirmed that despite public comments to the contrary, no bill is expected to be considered before August.

Just eight legislative days will remain in the fiscal year when the House returns in mid-September, leaving little time for Congress to change the current law that requires USPS to pay about $5.4 billion annually to prefund future retiree health and insurance obligations by Sept. 30. So lawmakers may once again do what they did last year: permit USPS to pay its annual obligations later in fiscal 2013.

Last year’s payment of roughly $5.5 billion is due on Aug. 1 and, unless Congress again permits USPS to pay later, the fiscal 2012 payment of roughly $5.6 billion is due in September, according to USPS spokesman David Partenheimer. Those two payments, plus declining revenues due to plummeting mail volume, means USPS is expected to lose $14 billion this fiscal year, Partenheimer said.

“Legislative changes are a vital component of the Postal Service’s comprehensive five-year business plan that would reduce our annual costs by $22.5 billion by 2016 and put the Postal Service on the path to long-term financial stability,” Partenheimer said in an e-mail.

But aides to House Majority Leader Eric Cantor (R-Va.), who sets the House schedule, said Thursday that he hasn’t determined when lawmakers will vote on a reform bill,. GOP leaders remain cognizant of upcoming dates by which USPS is obligated to make payments to fund health-care and retirement costs, said the aides, who spoke on the condition of anonymity in order to speak frankly about scheduling issues.

The GOP postal reform proposal, cosponsored by Reps. Darrell Issa (R-Calif.) and Dennis Ross (R-Fla.), differs significantly from the bipartisan Senate deal. The Issa-Ross plan allows USPS to end Saturday mail delivery, streamline postage rates and require postal workers to pay the same health insurance premiums as federal employees. It also establishes a financial control board to overhaul postal finances and a separate commission inspired to recommend which postal facilities should close.

The Senate deal, cosponsored by Sens. Joseph I. Lieberman (I-Conn.), Thomas Carper (D-Del.), Susan Collins (R-Maine) and Scott Brown (R-Mass.) would bar USPS from ending Saturday delivery for two more years and places several geographic and economic restrictions on closing far-flung rural post offices.

Carper called news of the House’s delay “deeply disappointing.”

“The House’s continued unwillingness to act on this issue is completely irresponsible,” he said in a statement Wednesday, adding later that, “The longer the House delays action, the more consumers and businesses become uncertain about the future of the Postal Service, undermining confidence in the Postal Service’s future and harming its ability to build new business.”

Ali Ahmad, an Issa spokesman, said the GOP legislation has sufficient support and that any delay “is intended to ensure that meaningful reforms not only win House approval, but are ultimately signed into law by the president. Issa and House leadership continue to monitor the Postal Service’s efforts to implement all cost cutting measures they are able to do under current law as well as the Postal Service’s financial condition to ensure that there is no disruption in service.”

Even if the House and Senate strike a deal, it’s likely to leave USPS officials unhappy. For more than three years, postal leaders have pushed lawmakers to grant them full flexibility to set delivery schedules, postage rates and the location of postal retail outlets. But restrictions set by appropriations bills — and the U.S. Constitution — still dictate that Congress must ensure the universal delivery of mail and lawmakers have appeared uneager to make significant changes in the midst of an economic downturn and close election year.

The Postal Service employs more than 500,000 full- and part-time workers, making it the nation’s second-largest employer after Wal-Mart. Thousands of small shipping companies and retailers, banking, insurance and other firms rely on USPS’s delivery schedule and network. Members of the American mailing industry warn that any delay in legislation risks more than $1 trillion in annual economic activity.

Any delay “is potentially disastrous for the eight million private sector workers whose jobs depend on the mail,” said Art Sackler, a leader of the Coalition for a 21st Century Postal Service, a group representing mailing industry firms. “This issue is critically important to the economy, and the House needs to have its voice heard.”

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