High priority for USPS: Solutions to stop billions in losses

By Joe Davidson
Thursday, December 2, 2010; 11:48 PM

Patrick R. Donahoe began his first congressional hearing as postmaster general-designate on a sunny note.

"Despite recent headlines, the Postal Service remains a very strong and motivated organization," he told a Senate Homeland Security and Government Affairs subcommittee on Thursday.

Motivated for sure.

But moments after Donahoe's brief bit of optimism, he described an organization that is financially very weak.

"Our total loss for [fiscal 2010] year was $8.5 billion," said Donahoe, who officially becomes postmaster general Saturday.

"This is a stunning number in many aspects, and it is unsustainable."

On that point, everyone agrees. There's less agreement on how to nurse the U.S. Postal Service back to health, particularly on what it says is a vital remedy: cutting one day of delivery.

Whatever the fix, all agree the service needs help fast.

"The truth is that we're rapidly approaching a time when we may no longer be able to depend on the Postal Service," said Sen. Tom Carper (D-Del.), chairman of the federal services subcommittee. "That time may come less than a year from now."

Sen. Susan Collins of Maine, the top Republican on the full committee, summed up the Postal Service's financial condition with one word: "abysmal."

Donahoe said the $8.5 billion "reflects two payments not under our control" - $5.5 billion for a legislatively mandated pre-payment for retiree health benefits and$2.5 billion for a workers compensation accounting adjustment.

Practically bragging, he said that operating losses were a mere $500 million. That's big money in many places, but not much when compared to the Postal Service's greater losses. It does not rely on tax dollars.

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