Postmaster General: Congress should tackle postal bill before fiscal cliff

Lawmakers on both sides of the aisle and in both chambers have said they want to get a bill to the president’s desk by the end of the year, even as negotiations over the so-called “fiscal cliff” are expected to take up much of the oxygen in Washington in the coming weeks.

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In the wake of USPS losses, top members in both chambers also said they hoped Thursday’s announcement would spur some action. 

The Senate passed a postal reform bill in April. But House Republicans, who have yet to bring their bill to the floor, say that measure doesn’t make the fundamental changes needed to keep the agency afloat long-term.

“USPS has failed to take reasonable steps under its current authority to reduce losses over the past several years,” Reps. Darrell Issa (R-Calif.) and Dennis Ross (R-Fla.), the sponsors of a House postal reform bill, said in a statement.

“The losses announced today underscore the need for postal reform legislation to cut costs and capture savings to achieve long-term solvency.”

On the other side of the Capitol, Sen. Tom Carper (D-Del.), one of the sponsors of the bipartisan Senate postal bill, said lawmakers needed to act to ensure that USPS didn’t hit its own fiscal cliff.

“It is imperative that Congress get to work on this issue and find a solution immediately,” Carper said in a statement. “I am hopeful that now that the elections are over, my colleagues and I can come together and pass postal reform legislation so that a final bill can be signed into law by the end of the year.”

The comments come as postal officials said the fiscal 2012 losses illustrated that they had played “a bad hand well.” 

Roughly 70 percent of the service’s losses came from defaults of two separate required payments for future retiree healthcare, and Donahoe and other members of postal management noted that USPS had seen record revenues from election-year mailing and increases in revenues from shipping packages. 

The Postal Service’s operating deficit actually dropped slightly from fiscal 2011 to 2012, from $2.7 billion to $2.4 billion. USPS absorbed overall losses of $5.1 billion in fiscal 2011, after the scheduled retiree healthcare payment for that year was pushed into fiscal 2012.

Donahoe has said that a handful of changes would put the service on firmer long-term footing, including easing the roughly $5.5 billion a year USPS currently owes for the retiree prepayment. 

Postal officials have said they could accept provisions in the Senate bill that would relieve some of the pressure from that payment. The House measure would also allow USPS to move more quickly to five-day delivery, another step the agency calls crucial.

House Republicans would also, if necessary, empower a control board to cut costs at USPS. The Senate bill would open up new revenue streams for the service, like the ability to ship beer and wine, and give the agency access to an overpayment into a federal retirement fund.

The federal government recently projected that the surplus in the Federal Employees Retirement System shrank significantly. On Thursday, USPS also confirmed that it could run out of cash in October 2013 without congressional intervention.