Like rain and sleet, cash shortfall and billions lost won’t stop USPS

The United States Postal Service has spent a lifetime promising mail delivery through rain, sleet, snow and other inclement weather. On Wednesday it added this year’s financial storm to the list.

The Postal Service (USPS) said it will make deliveries and pay its workers without interruption despite the specter of a $7 billion loss and a $700 million cash shortfall this year.

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So far this year the USPS posted a $2.4 billion loss in the third quarter and a total $4.7 billion loss. Agency officials blamed its poor fiscal situation on the recession, which is causing people to mail fewer items, and a requirement that it pay more than $5 billion this year into a trust fund for the future retiree health benefits.

Postmaster General John Potter said he has spoken to Obama administration officials and congressional leaders about legislation that will allow it to make up the shortfall, and added he’s confident lawmakers will take action. Both the House and Senate are taking up bills that would allow the USPS to redirect some of the money for the health benefits trust fund to its cash shortfall. But Potter said that if the agency can’t make up its deficit, it will not pay its full obligation to the fund this year.

“We’ve been very clear, and they’ve been very clear with us, that we’re going to continue to deliver the mail,” Potter said. “That will go on uninterrupted.”

Lawmakers from both parties have criticized USPS proposals to find savings this year, including the possible closure of post offices and an end to Saturday delivery service.

House members have pushed back against a USPS plan to consider consolidating dozens of facilities in cities, arguing that keeping them open is essential to their communities.

“Some of these facilities serve elderly populations that aren’t that mobile,” said Rep. Mike Doyle (D-Pa.). “Those folks need facilities they can walk to.”

Doyle’s district includes the Pittsburgh region, where the USPS is looking at closing 13 facilities. House members from New York City, including Reps. José Serrano (D) and Anthony Weiner (D), have questioned the agency’s list of 14 possible office closures there.

Sen. Susan Collins (R-Maine) has said that ending weekend service could hurt small businesses, such as small newspapers, that rely on mailing their products to consumers on Saturdays.

Potter sought to assuage concerns over the possible closure of USPS branches, noting that the agency regularly reviews which offices to keep open. Nearly 800 post office facilities are being considered for consolidation, but many on the list have yet to be reviewed by USPS officials, Potter said. The initial list included 3,500 facilities, he said.

“That’s created a bit of a firestorm because of the assumption that everything on the list that was published were facilities that were going to close,” he said. “The fact of the matter is that the list includes some facilities that haven’t been looked at yet.”

The Postal Service, because of its fiscal troubles, was placed last week on the Government Accountability Office’s (GAO) high-risk list of federal agencies in need of reform.

The USPS’s total debt will surpass $10 billion this year, the independent GAO projects. Because of the poor economy and a shift by consumers from regular mail to e-mail, the volume of mail handled by the Postal Service is expected to drop by nearly 14 percent, according to the GAO. The USPS said that the average number of pieces of mail it delivers to each address has dropped from approximately six pieces to four this year.

Potter suggested that a strong Postal Service is key to an economy that moves more than $1 trillion through the mail each year.

“It’s time to set a path for the future ... in terms of our business model and provide universal service for Americans for many years to come,” he said.