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Federal Eye
Posted at 06:00 AM ET, 03/23/2012

Postal Service closing plans panned by lawmakers

The U.S. Postal Service stands to lose billions of dollars in the first year after it closes 200 mail processing facilities and slows the delivery of first-class mail, according to a feasibility study released this week.

(Justin Sullivan - GETTY IMAGES)
The study also estimates that first-class mail volume could slip 9 percent and the delivery of magazines would plummet 19 percent if the closures occur and deliveries would slow because mailings would have to travel longer distances between processing facilities and final destinations.

Eye Opener

Postal regulators released the study Wednesday. But USPS spokesman David A. Partenheimer said that the findings are incomplete and “do not provide a fair portrait of the views of Postal Service customers regarding the service change at issue.” A revised study found that USPS would lose $1.3 billion in revenue in the first year after the changes and contribute $500 million less in labor and pension payments that year, Partenheimer said. The annual cost reductions associated with these same changes is projected to be $ 2.6 billion, resulting in a net annualized savings at $2.1 billion, the revised study found.

Rep. Gerald E. Connolly (D-Va.). (Alex Brandon - ASSOCIATED PRESS)
Regardless of how much would be lost, “No wonder the Postal Service wanted to keep this report a secret,” Rep. Gerald E. Connolly (D-Va.) said Thursday. Connolly and Sen. Susan Collins (R-Maine) pushed for the report’s release, demanding that USPS and the Postal Regulatory Commission release the report before lawmakers consider legislation to overhaul postal finances and permit USPS to move ahead with the closure of hundreds of processing centers and thousands of post offices. The consolidation plans could lead to the elimination of hundreds of thousands of jobs and save billions of dollars in the next three years, according to USPS officials.

In the House, a GOP-backed measure is slated for consideration next week by the Rules Committee before the measure comes up for a vote. And Senate Majority Leader Harry M. Reid (D-Nev.) said this week that he may move as early as Monday to begin debate on a bipartisan reform measure cosponsored by Collins.

But several senators — mostly Democrats representing rural regions of the country — have taken steps to block or stall the legislation.

Sen. Barbara Mikulski (D-Md.) said Thursday that she plans to place a hold on the Senate measure because USPS hasn’t been forthcoming about plans to close a processing center in Eastern Maryland.

And seven Democrats wrote to Postmaster General Patrick R. Donahoe Wednesday requesting detailed information on mail pricing, the use of excess space, hefty executive compensation packages and the growing size of USPS’s Washington headquarters staff at a time that rank and file workers are accepting early retirement packages.

“We all agree on the need to take action to preserve mail services for all Americans, including through the protection of timely mail delivery, small and rural post offices, and processing facilities — all of which are important to the communities we represent,” wrote the senators, led by Joe Manchin (D-W. Va.).

“The Postal Service is basically saying that they can’t run their own ship here in Washington,” Manchin said in an interview Thursday. “Look at some of the salaries here, look at some of the mismanagement decisions made here.”

Postal executive compensation is capped at $199,700 annually, but several officials also earn incentive bonuses and deferred compensation, putting their earnings well above Cabinet secretaries and the vice president.

Sen. Joe Manchin (D-W. Va.). (Jacquelyn Martin - AP)
The decisions made by USPS in recent years “fall back on rural Americans every time,” Manchin said in the interview. “Those people don’t have a vote, we’re here for them, but it’s more than just getting mail and sending a piece of mail. In the communities that I represent, it connects the whole community.”

Sen. Thomas R. Carper (D-Del.), who along with Collins is the primary cosponsor of the Senate’s main postal reform proposal, said Thursday that the situation facing USPS “is dire” but not hopeless.

“That is why we need to pass this bipartisan and comprehensive bill as soon as possible,” Carper said. “It is my hope that Congress and the administration can come together on this plan in order to save the Postal Service before it’s too late.”

Follow Ed O’Keefe on Twitter: @edatpost

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By  |  06:00 AM ET, 03/23/2012

Categories:  Eye Opener, Postal Service

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