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A chance for Congress to acknowledge its role in postal crisis

By Joe Davidson
Washington Post Staff Writer
Thursday, June 24, 2010; B03

It's easy -- and accurate -- to blame the ailing condition of the U.S. Postal Service on the nation's sick economy. And the rapid movement toward electronic communications certainly has dealt the service a serious blow.

But as Congress looks for ways to pull the USPS from its financial sinkhole, lawmakers also should look in the mirror. Programs approved by this august body have helped push the Postal Service to the brink of financial disaster.

Slowly, belatedly, members of the House and Senate are coming to grips with their responsibility.

"All too often, we criticize the Postal Service for various management and service problems but then stand in the way when the postmaster general puts painful but necessary changes on the table," Sen. Thomas R. Carper (D-Del.) said Wednesday as he opened a joint House-Senate hearing on the Postal Service.

"We've also failed recently to address the financial constraints that have worsened the Postal Service's problems. There is growing evidence that the formula created in the 1970s to determine how much the Postal Service must pay into the old Civil Service Retirement System [CSRS] has resulted in significant overpayments. In addition, it's become evident that, in the 2006 postal reform legislation, we saddled the Postal Service with an overly aggressive retiree health pre-funding schedule that has pushed postal finances into the red in recent years."

That "statutorily imposed" pre-funding scheme, added Rep. Stephen F. Lynch (D-Mass.), has made "the Postal Service's financial situation even worse." In addition, dramatic declines in mail volume and the rise in electronic communications contribute to "this perfect storm [that] has resulted in the Postal Service experiencing an unprecedented cumulative loss of $12 billion over the past three consecutive fiscal years," said Lynch, chairman of the House Oversight and Government Reform subcommittee on the Postal Service.

Although Congress wants the USPS to run like a business -- it is funded through the sale of products and services, not tax dollars -- the legislators don't allow it to function as a business. The Postal Service does not have the authority to decide not offer certain services on Saturdays, for example.

Cutting Saturday delivery would save $3.1 billion annually, postal officials say, quite a savings when the USPS expects to lose $7 billion this year. But Congress is in no mood to eliminate such a long-standing service to constituents, even though polls indicate that they are overwhelmingly willing to give it up. A Washington Post poll in March found that 71 percent of Americans, including majorities of Democrats, Republicans and independents, support Postmaster General John E. Potter's proposal to cut Saturday delivery.

But it's a non-starter for many members of Congress on both sides of the aisle.

Rep. Gerald E. Connolly (D-Va.) raised the specter of people not getting mail-order medicines and Netflix films on time, although a Netflix official testified that the company's customers could adjust their rental habits.

Connolly accused the Postal Service of using a "false number" a potential 10-year, $238 billion loss -- "to try to scare the public and members of Congress into accepting fewer days of postal delivery, shuttered post offices and slashed wages of Postal Service employees."

Rep. Jason Chaffetz (R-Utah) repeated his suggestion to allow the USPS 12 "postal holidays" with no delivery. Cutting 52 days, or one day a week, is too much for him. "I personally am opposed to that," he said.

Carper, chairman of the Senate Homeland Security and Governmental Affairs subcommittee on federal services, said he is planning legislation that "will remove the obstacles that prevent postal management from cutting costs while dealing once and for all with the pension and retiree health issues we've spent so much time discussing recently."

One big issue is the $75 billion in overpayments that the Postal Service inspector general says the agency had made to the CSRS since 1972. That's going to be a very hard knot for Congress to untie.

Several speakers agreed that pre-funding of postal retiree health benefits, a practice not required of any other agency or used in private industry, is responsible for much of the Postal Service's dire straits. Del. Eleanor Holmes Norton (D-D.C.) said the requirement, about $5.5 billion a year (although Congress deferred $4 billion of the 2009 payment), makes the government "look very hypocritical."

Now, almost everyone seems to agree that the congressionally imposed requirement was a big mistake.

"The fact remains, this decision by Congress, not the recession and not the impact of the Internet, is primarily responsible for the financial crisis faced by the Postal Service in recent years," Fredic V. Rolando, president of the National Association of Letter Carriers, said during the hearing.

"The inescapable fact is that if not for these payments, the USPS would have been profitable in three of the past four years, despite the deepest downturn since the Great Depression."

Carper closed his statement by urging everyone, "even members of the House and Senate," to put aside "the biases and political battles . . . that have prevented us from making progress on the pension and retiree health issues so far."

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