6-day delivery spared through most of 2012

Jan 4, 2012

By Tonda F. Rush
WASHINGTON—Congress pushed into the holiday season in December with last-minute postal legislation that keeps Saturday mail delivery alive through Sept. 30, 2012. It added a new restriction on closing small and rural post offices during the year. And it pushed the mandated $5.5 billion in prepayment not made in 2011 for retiree health benefits off to August.
But it failed to advance sweeping postal reform legislation that has been passed out of the Postal Service oversight committees in both House and Senate. Neither HR2309, calling for USPS to be governed by a control board nor the more moderate SB1789 reached the floor. Organizations representing mailing organizations, including the National Newspaper Association, met with Postmaster General Patrick Donahoe, and noted that neither bill seems to have the votes to clear its own house in Congress.
The enactment of the six-day mail requirement passed, as in previous years, as part of an appropriations bill that funded the federal government through the end of the 2012 fiscal year. Congress has tied the Postal Service’s hands on reducing delivery days since 1983.
USPS continues to report a grim financial picture, projecting that by August 2012, it will have less than $100 million in cash. It requires about $220 million a day to operate.
Yet its proposals to reduce costs by closing post offices and mail processing plants and cutting services in various ways have hit massive resistance in Washington. From labor unions fearing an accelerated downturn in jobs to mailers’ groups like NNA concerned about the effect of slower service, or members of Congress upset about damaging service in rural areas, agreements on how to fix the ailing USPS remain elusive.
Senate Majority Leader Harry Reid, D-NV, promised in December that postal reform legislation would be at the top of his chamber’s priority in January when Congress returns for the second session of the 112th Congress. However, many sticking points in postal reform remain:
l Should USPS be permitted to pull its employees out of federal health care funds? It hopes to form its own risk pools. But removing 500,000 employees from federal funds could damage those funds, and create a new taxpayer liability.
l Should USPS be governed by its own politically-appointed board of governors or should Rep. Darrell Issa, R-CA, prevail in insisting upon a new governing board charged with taking dramatic steps that might include voiding labor contracts?
l Should USPS employees be forced to elect Medicare upon retirement rather than the more generous federal funds? They contribute to Medicare now through employee deductions but generally elect not to take the benefits. Uncle Sam has benefitted from the free money contributed, but not used. Getting support from the federal government will be a challenge.
l Should USPS continue with its plan to close about half of its mail processing plants, moving mail volumes into large urban plants where unused automation equipment sits? It began on that path in the fall until pushback from a group of Democratic senators persuaded Donahoe to suspend the closings until May 15.
l Should it abandon Saturday mail delivery, despite findings from the Postal Regulatory Commission that rural areas would be harmed and First-Class Mail could be slowed as much as 40 percent? Though the appropriations bill requires Saturday delivery, passage of postal reform legislation could trump that bill. USPS, however, has indicated it now predicts no shift to five-day delivery before 2013.
Donahoe continues to call for urgent action in light of continued weakening of the Postal Service’s financial position. But the most recent sweeping postal reform bill, adopted in 2006, took more than a decade to develop. Whether faster movement in 2012—an election year where partisan divides widen and legislative days are few—will meet Donahoe’s demands will be answered when Congress reconvenes during the third week in January. Or, as many legislative observers predict, not.
NNA has issued a call for members concerned about declining service and the future of the Postal Service to join NNA for its We Believe in Newspapers Conference and Day on the Hill on March 8. The event will be followed by a dinner at the National Press Club. (See the ad on Page 2 for more information on the conference.)