With USPS floundering, postmaster urges congressional action

The top postal official is calling on Congress to swiftly give the U.S. Postal Service further cost-cutting tools in the face of what could be a $10 billion deficit this fiscal year.

Patrick Donahoe, the postmaster general, says in prepared testimony for a Tuesday congressional hearing that he is looking to slice $20 billion off the service’s annual operating costs and bring USPS more into the 21st century.

USPS’s bottom line has taken a hit in recent years not only from the weak economy, but also from technological changes that allow people to communicate electronically.

“The way people work, interact, learn, communicate, do business, and live their daily lives is vastly different than it was for our parents and even for many of us,” Donahoe says in testimony before the Senate Homeland Security and Government Affairs Committee. “The Postal Service has a place in this new world, but getting there requires us to change and adapt in ways that might not have been thought of before.”

ADVERTISEMENT
USPS is expected to hit its $15 billion borrowing limit by the end of this month, a prospect that has lawmakers such as Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) worried about a possible default. The service is also expected to see a 2 percent drop in mail volume this year, down to 167 billion pieces.   

In his testimony, Donahoe lays out several steps that USPS has already asked Congress to take, including to allow it to scrap Saturday delivery and get rid of a required prepayment for health benefits for retirees that isn’t required of other federal agencies. USPS has already announced that it will not be able to make this year’s $5.5 billion payment, which is due Sept. 30.

“The Postal Service, as I have described in this testimony, has done and will continue to do our utmost to address both cost savings and generation of new sources of revenue,” Donahoe says. “Solving these complex issues will take a truly collective effort, involving the Postal Service, Congress, our mailing industry partners, employees, and union leaders.”

USPS has also indicated that it wants the authority to lay off tens of thousands of workers over the next three years, despite labor contracts that contain no layoff provisions. Unions are pushing back against that and other USPS proposals, with contracts covering roughly 45 percent of the service’s 560,000 employees expiring in November. 

For their part, Collins and Carper, who have both introduced USPS-related legislation, are both expected to say Tuesday that the Postal Service needs a broad overhaul.

Collins’s opening statement compliments USPS for thinking outside of the box as it tries to cut costs, but also says proposals such as ending Saturday delivery would not help prop up the service.

“I want to give the new Postmaster General credit for more creative proposals to stem the crisis,” Collins, the ranking Republican on the Homeland Security panel, is scheduled to say. “At times, however, the Postal Service’s responses have been inadequate and counterproductive.”

Carper, meanwhile, will urge lawmakers from both parties to help find a solution to the Postal Service’s problems. In addition to the two Senate bills, House Republicans and Democrats also have their own separate proposals to revamp the agency.

“It is my hope that the discussion we have here today will jumpstart the process of developing a bipartisan, bicameral consensus around the reforms necessary to restructure the Postal Service’s finances and transform its operations to reflect the uncertain future it faces,” Carper, the chairman of the subcommittee that oversees USPS, says.