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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.

Carper and Collins each have introduced legislation designed to keep USPS from death's door.

Both would allow the Postal Service to recoup $50 billion that the Postal Regulatory Commission estimates USPS has overpaid into the Civil Service Retirement System.

Carpers said his POST Act, short for Postal Operations Sustainment and Transformation Act, would allow the Postal Service to use that money to pay for retiree health benefits, an obligation that has significantly worsened its financial problems.

"This would take $5.5 billion or more off the Postal Service's books each year and prevent a catastrophic shutdown in the coming months," Carper said.

Both bills would allow USPS to close existing facilities and, in some cases, locate them in retail establishments.

"I want to point out that before co-location decisions could be made, the bill would direct the Postal Service to weigh the impact of any decisions on small communities and rural areas and solicit community input," Collins said in a statement. "The bill also would require that co-location does not diminish the quality of service."

On the question of reducing delivery service from six days to five, Donahoe, during an interview after he testified, said the move is "crucial" to returning USPS to financial health. Carper's legislation would give USPS authority to cut one day of service without congressional approval.

"Unfortunately, Congress each year prevents the Postal Service from exercising its authority to change delivery frequency when it believes that doing so is necessary," he said. "I'm not an advocate of eliminating Saturday delivery. . . . But I am an advocate of giving the Postal Service the freedom to manage, especially when our interfering in manage-ment decisions could prevent the achievement of so much in savings at such a critical time."

Postal unions don't see any good arguments for five-day delivery.

Fredric V. Rolando, president of the National Association of Letter Carriers, said doing away with Saturday delivery would eliminate 80,000 jobs during a recession.

"Congress would essentially be outsourcing a key public policy decision to whoever occupies the position of postmaster general at any given time," he said. "There would be no way to prevent the Postal Service from dropping two or even three days of delivery per week."

Donahoe did raise the possibility of three-day service during his testimony but said that possibility remained years away.

Volunteers honored

Six people were honored by the State Department on Thursday for outstanding volunteer service abroad.

The awards recognize U.S. government employees, family members, including domestic partners, and others at embassies and consulates "who gave exceptional volunteer service to their communities, mission or host country, or rendered outstanding assistance in emergencies," according to a department statement.

The award winners are:

Shirley A. Winter, a family member of a federal employee, who implemented a swim and water safety program in Yaounde, Cameroon.

Shameera M. Wiest, a family member who volunteered with the U.N. High Commissioner for Refugees in Kuala Lumpur, Malaysia.

Melissa E. Schraibman, a foreign service employee, and her partner, Mindy R. Michels, helped activists create programs for lesbian, gay, bisexual and transgender people in Tirana, Albania.

Beth A. Brownson, a foreign service employee, worked with children's shelters in Mumbai and assisted employees at the U.S. consulate looking to volunteer .

Jose M. Torres, a foreign service spouse, helped train canine search and rescue teams in Costa Rica and El Salvador.

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