Mailers Fear New USPS Reform May be Needed

Mailer groups doubt that last week’s decision to give the U.S. Postal Service $4 billion worth of temporary fiscal relief was enough to solve its massive financial problems. They also fear Congress may be compelled to take up postal reform again despite the 11 years it took to pass the Postal Accountability and Enhancement Act in 2006.

On Wednesday night, President Obama signed the fiscal year 2010 legislative branch appropriations bill (HR 2918), which, among other things, included a provision deferring $4 billion in USPS contributions to pre-fund postal retiree health premiums until next September.

Had HR 2918 not passed, the USPS would have been obligated to fork over $5.4 billion into this fund, something the USPS has said it can’t afford to do when it’s expected to lose as much as $7 billion this year as mail volume keeps shrinking.

Gene Del Polito, president of the Association for Postal Commerce, thinks the time has come for postal employees to start sharing some of the sacrifices.

“Despite all the terrible things that are happening to companies all over the United States, there hasn’t been a single layoff in the postal service and there hasn’t been a single solid facility closure,” he said. “We’ve suffered, and they haven’t.”

He said he hopes that when the USPS and employee unions go into collective bargaining next year they need to come up with a plan “that makes sense if the postal service is to survive.”

“Our concern remains that mail volume may not rebound quickly in which case the postal service could still find itself with a cash crunch, making it difficult to meet all of its financial obligations,” said Bob McLean, executive director of the Mailers Council.

If that happens, “I think we’re going to have to look at more serious and more drastic legislative changes,” McLean said. Part of that could entail having Congress authorize the postal service to close some facilities which, he conceded, could cause political problems.

Neither Del Polito nor McLean thought Congress would allow the USPS to cut back to five-day delivery from the current six despite Postmaster General Jack Potter’s efforts to do so.

“There is clearly a lot of Congressional opposition to this idea and I believe it will take a lot more education from the postal service, mailers and employee organizations before this can happen,” said Mc Lean.

He thought facility closures were more likely than five- day delivery.

“I don’t know what Congress is going to do,” Del Polito said. “All I know is that Congress is soon going to be facing the day when they’re going to have to figure out how to support a postal system that can no longer be supported strictly on the basis of user revenue.”