By Bernie Becker - 04/17/13 01:30 PM EDT
House Oversight Chairman Darrell Issa (R-Calif.) blasted Postal Service officials on Wednesday for not doing more to shore up the struggling agency’s finances.
“I don’t doubt or discount that Congress and the president have unfinished responsibilities and disagreement has delayed reform,” Issa said in his prepared opening statement for a hearing featuring Postmaster General Patrick Donahoe and the nation's comptroller general, Gene Dodaro.
“But in the absence of congressional action, it’s time for Postal Service management to exercise full use of its authority to do everything possible to avoid a taxpayer bailout. This is a time for action and decisiveness, not a time for excuses and empty rhetoric.”
A week before the hearing, the USPS dropped its plans to end Saturday letter delivery while continuing to move packages, which the California Republican held up as proof that the agency was succumbing to political pressures.
Issa and other House and Senate members have been discussing Postal Service reform for about two years but have yet to reach an agreement. The House didn’t bring up a reform bill written by Issa for a vote in the last Congress, and House and Senate negotiators were unable to clinch a deal before the start of the current Congress.
But the House Oversight chairman said he hoped to release new legislation soon, and that he and the panel’s top Democrat, Rep. Elijah Cummings (Md.), had been making progress on a bipartisan measure. A spokesman for Issa declined comment on just how soon legislation could be released.
In his statement, Donahoe called the abandoned plan to stop Saturday letter delivery a “lost opportunity,” and took a shot at lawmakers for dragging their feet.
“Our employees, unions, management organizations and customers have shared in the sacrifices needed to keep the Postal Service solvent,” Donahoe said.
“Every entity with a stake in the future of the Postal Service has taken some kind of action, with one notable exception — Congress. It is time for Congress to act decisively, to make these difficult decisions and to enact long-lasting change that will ensure the viability and health of our nation’s Postal Service.”
Dodaro, meanwhile, said that “urgent action” was needed and that a lack of funds was threatening the USPS’s financial solvency.
“If Congress does not act soon, USPS could be forced to take more drastic actions that could have disruptive, negative effects on its employees, customers, and the availability of postal services,” Dodaro said.
The agency lost close to $16 billion in fiscal 2012 amid declining first-class mail volume. A large chunk of those losses — more than two-thirds — stemmed from defaults on prepayments for future retiree healthcare, a requirement not asked of other agencies.
Dodaro said that Congress needed to lessen the burden of the required prepayments, give the agency more authority to increase revenues and cut costs, and mandate that any negotiations with postal unions take into account USPS’s poor financial footing.
Fredric Rolando of the National Association of Letter Carriers, who also appeared at the hearing, said he was concerned that the Postal Service and some lawmakers were too concerned with cost-cutting.
“Forcing the Postal Service to slash service and reduce quality and degrade its unique last-mile delivery network will simply draw more business away and tip us into a death spiral,” Rolando said. “We cannot destroy the village to save it.”
The Postal Service’s board, in urging the agency to drop its plan to limit Saturday delivery starting in August, said Congress had tied the USPS's hands by passing a stopgap spending measure that mandated six-day delivery. The Government Accountability Office (GAO), which Dodaro heads, had released an analysis saying that the Postal Service was bound by the six-day requirement.
But Issa said the agency's legal justification for dropping the plan, which its leaders say could save up to $2 billion a year, contained other options that the Postal Service has not pursued.
Its legal analysis says the Postal Service likely cannot refuse to accept the appropriation connected to the six-day requirement in the continuing resolution, something Issa and other Republicans have suggested. But the USPS could ask President Obama to call for rescinding that appropriation, though the GAO may disagree on that front.
Under questioning from Issa, Mickey Barnett, the chairman of the USPS board, said that the agency had decided to drop its new delivery plan because it knew the change would get challenged in court and could affect thousands of postal employees and businesses. Issa had pointed out that the agency had defaulted on the healthcare prepayments, which are also required by law.
“The unions wanted to keep six day, and they didn’t mind not paying their just debts pursuant to the law,” Issa said in response to Barnett’s answer.
— This story was updated at 3:30 p.m.