In Special Delivery to Lawmakers, U.S. Postmaster Signals SOS

By Joe Davidson
Thursday, March 26, 2009

If the U.S. Postal Service delivered mail by boat, it would be a sinking ship.

A large hole in the hull, punched by a huge iceberg named Recession, is draining mail volume while it allows financial losses to flow in and drown the service in a financial swamp.

The Postal Service is in dreadful shape and needs quick help from Congress to continue delivering the mail.

That was the message repeated over and over by a parade of witnesses yesterday before the House subcommittee on federal workforce, postal service and the District of Columbia.

"At this moment, the survival of the Postal Service -- a venerable institution that is literally older than our country -- hangs in the balance," warned William H. Young, president of the National Association of Letter Carriers. "The Great Recession we face today threatens to destroy the most trusted and universal connection most Americans have with their national government."

There might be some hyperbole in that. The postal service likely will rebound as the economy does. But how much will it suffer until then?

Postmaster General John E. Potter was deadly serious.

"We are facing losses of historic proportions," he said. "Our situation is critical."

The volume of losses, he added, are "of a magnitude we have not experienced in the 75 years since the Great Depression."

Here are the numbers: USPS moved 213 billion pieces of mail in fiscal year 2006. This year, that number is expected to fall to 180 billion. The amount of money the postal service has been losing goes up and down, but it's all bad -- $5.1 billion in 2007, $2.8 billion in 2008, and a projected $6 billion in both 2009 and 2010.

Potter pushed two ideas to help bail out the postal service. The first would allow it to pay for retiree health benefits out of its Retiree Health Benefit Fund instead of its operating budget. That change would have allowed the service to reach a $1.6 billion profit in 2007, instead of a $5.1 billion loss.

Bipartisan legislation allowing the change, sponsored by Reps. Danny K. Davis (D-Ill.) and John M. McHugh (R-N.Y.), was widely endorsed, including by employee representatives.

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