Postal reformers fear loss of momentum

The U.S. Postal Service’s improving bottom line could make it harder to pass reform legislation that both the agency and lawmakers say is badly needed.

The more than $10 billion drop in USPS’s losses could blunt the sense of urgency for a congressional overhaul, especially among the stakeholders and lawmakers who don’t like the leading proposals.

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Postmaster General Patrick Donahoe, as he has for several years now, stressed on Friday that his agency badly needs legislation that would both allow it to tap into new revenue streams and cut costs to deal with years of declining mail volume.

“We’ve achieved some excellent results for the year in terms of innovations, revenue gains and cost reductions, but without major legislative changes we cannot overcome the limitations of our inflexible business model,” Donahoe said in a statement.

But other postal observers wondered on Friday just how badly USPS needs wide-ranging legislation, given that the agency’s $5 billion loss for fiscal 2013 was about $1 billion less than projected — and entirely due to a healthcare payment.

The Postal Service defaulted on a $5.6 billion required prepayment for future retirees’ healthcare at the end of September, accounting for more than 100 percent of its losses.

The varied responses show how difficult it will be for Congress to come together on postal legislation, which has been in the works more than two years.

Lawmakers remain divided on key issues like whether or how much the agency should put aside for future retirees, whether to keep Saturday delivery intact and whether to shift away from door-to-door delivery.

Those differences don’t always break along party lines, with Republicans and Democrats from rural areas trying to protect delivery standards.

So far, the latest proposal from House Oversight Chairman Darrell Issa (R-Calif.) — which seeks cost-cutting maneuvers like scrapping Saturday letter delivery — has yet to be scheduled for floor time, after clearing the committee on a party-line vote in July.

Meanwhile, Sens. Tom Carper (D-Del.) and Tom Coburn (R-Okla.), authors of the leading Senate proposal, delayed a schedule markup of their bill amid complaints from Democrats.

That measure would open up some new revenue streams for USPS — including the opportunity to ship beer and wine — while also prioritizing curbside and centralized delivery.

But liberal lawmakers and unions pointed to the Postal Service’s decline in red ink to argue that cuts to USPS operations aren’t needed.

They said the Postal Service would have been $600 million in the black if it didn’t have its prefunding requirement, and continued their push to scrap the payments altogether. They also noted that USPS’s package delivery increased substantially for another year, driven in large part by the boom in online shopping.

“Today's report supports the need to fix the congressional pre-funding fiasco rather than attack postal workers and degrade postal services,” Fredric Rolando, the president of the National Association of Letter Carriers, told The Hill in a statement. “Legislation that reduces services to the American people and their businesses would only jeopardize the postal comeback shown in today's report.”

Liberals like Sen. Bernie Sanders (I-Vt.) and Rep. Peter DeFazio (D-Ore.) are also seeking to protect Saturday delivery, and to find even more ways for the service to raise revenues. NALC’s Rolando, for instance, praised a recent agreement USPS made with Amazon to deliver the company’s packages on Sunday.

“The way to save the Postal Service is not to dismantle it piece by piece, but to allow it to generate more revenue by offering new and innovative products and services that the American people want,” Sanders said in a statement.

But Issa, Carper and Rep. Blake Farenthold (R-Texas), who chairs the Oversight subcommittee with jurisdiction over the Postal Service, all said that the $5 billion in losses showed that legislation is needed to downsize the agency.

Issa and Farenthold argued that the cost-cutting measures USPS is already employing will no longer be as effective, and renewed their call to end Saturday letter delivery. They also pointed to USPS’s statement that it only had around nine days of operating cash available.

A spokesman for Issa also noted that election-related mailings helped drive USPS revenues during the early part of fiscal 2013, and that the agency’s unfunded pension liabilities grew as well.

“Only Enron’s accountants would call USPS profitable this year. The unions are citing changes in the long-term liability for workers’ compensation costs and changes in the value of outstanding stamps to argue the Postal Service made a profit,” the spokesman, Ali Ahmad, said Friday.

“As USPS noted in its release this morning, its deficit liabilities exceed its assets by approximately $40 billion. Whether USPS has a surplus or a loss in one year is an increasingly insignificant data point in the face of its long-term liabilities.”

Some stakeholders urging lawmakers to act also feared that Friday’s numbers could lower the chances of legislative action.

Art Sackler of the Coalition for a 21st Century Postal Service, which represents large mailers, said “the industry is worried that the numbers may provide a false sense of reassurance to some concerning the need for legislation.”

Sackler’s group is fighting a USPS proposal to raise stamp prices more than the rate of inflation.

“USPS remains in a very deep financial hole, and still needs legislative change urgently,” he said.