USPS $5 billion in the red for 2011

As it happens, House and Senate committees have each passed their own plan to overhaul the Postal Service’s operations.

For its part, USPS has seen mail volume drop by more than 20 percent since 2006, a trend officials blame on both the increasing ease of digital communication and the dreary economy.

In total, the Postal Service saw revenues drop by almost $1.5 billion in 2011, from $67.1 billion down to $65.7 billion, and postal brass expect revenues to keep falling in 2012.

Joseph Corbett, the agency’s chief financial officer, also said in a Tuesday briefing that first-class mail, the Postal Service’s biggest revenue-raiser, saw a 6 percent decline in 2011 and cannot be counted on to make a comeback.

On the other side of the ledger, expenses dropped from $75.4 billion to $70.6 billion – in large part because the health care prepayment was delayed.

Corbett also reiterated in a briefing that the Postal Service could run out of money in less than a year’s time if Congress did not step up to the plate.

For now, USPS has until Friday to make the benefit prepayment. But postal officials have said the agency will default on the obligation unless Congress pushes it back again, and that USPS will be unable to make a $5.6 billion prepayment that is due at the end of the current fiscal year.

And even if those payments are pushed aside, Corbett said, the agency is still projected to be dangerously close to running out of funds by October 2012.

Top lawmakers in the chamber have vowed to work together to get USPS on more solid financial ground, but the House and Senate bills have broad differences that need to be bridged.

“The Postal Service faces insolvency because it has not cut its expenses in line with its declining revenues,” Rep. Darrell Issa (R-Calif.), the chairman of the House Oversight Committee, said in a statement. “Today’s report further underscores the fact that real reform is needed now, not two years from now, if we are to save the Postal Service.”

Private-sector observers also continued to express concern about the Postal Service's finances in the wake of Tuesday's announcement.

“For the Postal Service and the mailing industry, the news cannot get much worse," Art Sackler, coordinator of the Coalition for a 21st Century Postal Service, said in a statement. “There are 8 million private sector jobs that rely on the Postal Service, and these jobs will be put at-risk unless Congress quickly enacts bold reforms.” 

But Ron Stroman, the deputy postmaster general, told reporters on Tuesday that, while both the House and Senate bills have their merits, neither gives USPS the financial flexibility it truly needs.

“None of the bills gets us to where we need to go,” Stroman said. “We are hopeful that moving forward we’ll be able to work with both the House and the Senate to improve the bills.”

USPS has asked for, among other things, Congress to relieve the burden of the retiree prepayment, the ability to scrap Saturday delivery and access to an overpayment into a federal retirement program.

The agency has also said that it is looking to revamp both its processing network and close local branches, with labor making up 80 percent of its costs.

The House bill, pushed by Issa and Rep. Dennis Ross (R-Fla.), would empower a new oversight board to recommend post office closures and other cost-saving moves, and also leaves the door open for allowing USPS to go to five-day delivery.

But it also does not give the Postal Service access to a roughly $7 billion overpayment into the Federal Employee Retirement Service, calling that a projected surplus.

On the other side of the Rotunda, the Senate bill – crafted by Sens. Joseph Lieberman (I-Conn.), Susan CollinsSusan Margaret CollinsTrump plan to claw back billion in spending in peril Romney backs Laura Bush on border: 'We need a more compassionate answer' Amnesty International rips family separation policy: 'This is nothing short of torture' MORE (R-Maine), Tom CarperThomas (Tom) Richard CarperLawmakers prep for coming wave of self-driving cars Overnight Energy: Pruitt used security detail to run errands | Dems want probe into Pruitt's Chick-fil-A dealings | Yellowstone superintendent says he was forced out Dems seek watchdog probe into Pruitt’s Chick-fil-A dealings MORE (D-Del.) and Scott Brown (R-Mass.) – would spread out the retiree payment.

But with some rural lawmakers deeply skeptical of five-day delivery, the measure would also not allow USPS to move in that direction for at least two years.

Postal unions are also fervently against allowing USPS to drop down to five-day delivery.