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Senate Looks At Ways To Help Post Office

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WASHINGTON (AP) — It looks like rescuing the financially struggling Postal Service is going to require thinking outside the mailbox.

The post office was more than $2 billion in the red for the first three months of this year and is facing an $8 billion loss for the fiscal year, which could force it to default on some payments to federal accounts.

Sen. Tom Carper, D-Del., said Tuesday he is introducing a bill to restructure postal finances and ease some of the restrictions that limit its flexibility.

“The Postal Service, the Postal Service’s inspector general, the Postal Regulatory Commission and two independent actuaries have all come to the conclusion that the Postal Service has overfunded its obligations to the Civil Service Retirement System by between $50 billion and $75 billion,” Carper told a hearing of the Senate Homeland Security and Governmental Affairs subcommittee on federal financial management.

Carper, chairman of the subcommittee, said he has introduced legislation that would allow the post office to use the overpaid money to make its make advance payments to cover future retiree health benefits — taking upwards of $5 billion off its books each year.

In addition, the bill would provide for new postal services such as delivering alcoholic beverages — currently banned in the mail — and provide more flexibility in closing offices.

“No business facing the kinds of difficulties the Postal Service faces would survive for very long if it were told how many retail outlets they should have and where they should be located,” Carper said of the agency that wants to close small, low-volume offices but faces fierce opposition when it tries to do so.

Postmaster General Patrick Donahoe welcomed the proposals and said he hoped Carper’s bill could be combined with legislation from Sen. Susan Collins, R-Maine, to help set the post office on a course for a better future.

“We have aggressively cut costs in response to economic conditions and customer trends. We have reduced the size of our workforce by more than 112,000 employees in the last four years and we are consolidating both our mail processing facilities and our retail footprint. Our total cost reduction during this four-year period is in excess of $12 billion, Donahoe told the subcommittee.

The post office, which does not receive tax funds for its operations, has struggled with declining mail volume both because many people have switched to the Internet for personal communications and bill payments and because the recession caused businesses to reduce mailings.

New offerings such as boxes sold by the post office that ship for a flat rate regardless of the weight have been a success, Donahoe said.

He welcomed the idea of delivering alcoholic beverages ordered from stores or sent person to person, noting that is a large part of the business in some foreign postal services. Donahoe did note that such products would not be left at homes, but would be held at post offices for pickup by adults.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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