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Federal Eye
Posted at 05:35 PM ET, 11/21/2011

Postmaster general: Bills to fix Postal Service ‘do not come close’


Postmaster General Patrick R. Donahoe is sworn in as head of the U.S. Postal Service in January at USPS headquarters. His wife, Joan, is at left. (James A. Parcell - For The Washington Post)
Updated 5:33 p.m. ET

Competing House and Senate bills to fix the U.S. Postal Service “do not come close” to achieving the billions of dollars in savings needed in the coming years, the nation’s postmaster general said Monday.

Facing billions of dollars in losses this year amid slumping mail volume and rising labor costs, USPS hopes to cut about $20 billion by 2015. Proposals passed by House and Senate committees in recent weeks would permit the Postal Service to end Saturday mail deliveries, close thousands of post offices and processing facilities and potentially lay off hundreds of thousands of workers.

But the bills “would not provide the Postal Service with the speed and flexibility it needs,” Patrick R. Donahoe said Monday. “Both bills have elements that delay tough decisions and impose greater constraints on our business model. Taken as they are, they do not come close to enabling the cost reductions.

“Congress needs to step back and look at the Postal Service as a business and give us the business model that allows us to act quickly to lower our costs.”

Cherry-picking from the two leading proposals, Donahoe said he was pleased that the Republican-backed bill by Reps. Darrell Issa (R-Calif.) and Dennis Ross (R-Fla.) would quickly give USPS the ability to close post offices and end Saturday mail deliveries. But the bill’s proposal to establish a financial control board to overhaul postal finances would just add another layer of unnecessary bureaucracy, Donahoe said.

In the Senate bill, Donahoe said he appreciated its call to return about $7 billion in money paid by USPS into a federal employee retirement account, but said the bill’s requirement of up to two years of feasibility studies regarding the end of Saturday mail delivery would merely prolong the inevitable.

“There's a lot of interest, it’s just a matter of trying to get what’s out there right now thought through and pushed so we can get something done quickly,” Donahoe said of the proposals.

The Senate bill is cosponsored by Joseph I. Lieberman (I-Conn.), Susan Collins (R-Maine), Tom Carper (D-Del.) and Scott Brown (R-Mass.), whose aides did not respond to requests for comment.

But Issa reacted angrily, calling Donahoe “disingenuous” for arguing that his bill, which aides said would save $10.7 billion annually, doesn’t go far enough.

“He’s not even willing to embrace the cuts it contains or even the smaller savings contained in the Senate bill,” Issa said in a statement. “The Postal Service still seems to hold the misguided belief that accounting gimmicks and an increased reliance on taxpayer support will give it flexibility to push back insolvency for a few more years.”

Meanwhile, negotiators for USPS and two of its labor unions said late early Monday that they will continue talking for two and half more weeks after current labor contracts expired at Sunday night.

That gives USPS, the National Association of Letter Carriers and the National Postal Mailhandlers Union until Dec. 7 to hammer out a deal.

NALC represents nearly 300,000 active-duty and retired city letter carriers while NPMHU represents about 47,000 postal employees. Wages and benefits for workers represented by the two unions topped $15.7 billion and $3.5 billion last year, USPS said.

Follow Ed O’Keefe on Twitter: @edatpost

Wait! Don’t go yet! Please also read:

Postal Service posts $5.1 billion loss

Postal Service resumes payments to federal retirement fund

For more, visit PostPolitics and The Fed Page.

By  |  05:35 PM ET, 11/21/2011

Categories:  Postal Service, Congress

 
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