Postal Service worried by ‘unsustainable path’

As the agency teeters on the brink of insolvency, leaders of the U.S. Postal Service on Wednesday once again took their pleas for help to Capitol Hill.

The USPS lost $1.3 billion in just the past quarter, and officials say they’re counting on this year’s Christmas mailing season to keep the iconic letter-carrying service afloat.

“This imbalance [between revenues and expenses] will only get worse over the coming decade unless laws that govern the Postal Service are changed,” Postmaster General Patrick R. Donahoe told the House Committee on Oversight and Government Reform.

“We are losing $25 million a day and we are on an unsustainable path. Our financial problems are due to the fact that we have restrictive laws that prevent us from fully responding” to its indebtedness, he said.

Wednesday’s hearing came just a week after the Postal Service abandoned plans to cut regular Saturday mail delivery, a key part of the agency’s long-term strategy to avoid bankruptcy. The USPS Board of Governors abruptly changed course last week after deciding that, under the current continuing resolution funding the federal government, the move to five days a week would be illegal.

The provision in question was first written in 1983, and has been repeated in budgets and continuing resolutions ever since. In very plain language, it directs the USPS to maintain service six days a week.

Postal Service officials clearly believe they would’ve opened the agency up to lawsuits had they gone forward with their proposal. They want Congress to pass legislation making it clear the USPS can cut a delivery day as part of a larger reform package.

But some members of Congress believe the Postal Service simply caved to political pressure to keep Saturday mail, and that legal opinions weren’t truly behind the decision.

Rep. Darrell E. Issa, California Republican and chairman of the oversight committee, suggested that labor unions helped sink the proposed change, a charge he first made immediately after last week’s decision and one he reiterated at Wednesday’s nearly four-hour hearing.

“The union wanted to keep six-day” delivery, Mr. Issa said.

USPS officials acknowledged that it certainly would have been hit with lawsuits had the agency cut Saturday delivery, though it’s unclear how such cases would have turned out.

While the nation’s postal unions have opposed the elimination of Saturday delivery, one of those labor groups conceded Wednesday it will accept other cost-cutting measures, such as personnel reductions, provided the USPS looks to grow its business and compete in the marketplace.

“We’ve done our part to preserve the viability of the Postal Service through the bargaining process. But more must be done and we need the Congress to do its part as well,” said Fredric V. Rolando, president of the National Association of Letter Carriers.

“We’re very supportive of whatever size workforce it takes for the Post Office to have a plan for growth,” he added.

Some prominent Democrats, traditionally allied with labor groups such as the letter carriers, want to see Mr. Rolando and other union representatives follow those words with actions, rather than oppose any job cuts and put the USPS’ very survival at risk.

“You can lose what you have by trying to hang on to what you used to be,” said Rep. Elijah E. Cummings, Maryland Democrat and his party’s ranking member on the committee.

Mr. Cummings added that Congress “can do this,” and that the American people are counting on successful reform of the Postal Service.

In addition to adjusting the six-days-a-week language, the USPS is also looking for Congress to roll back the requirement that it pre-fund its retiree health benefit accounts for a half-century into the future.

The USPS, however, still would be in the red even with those adjustments. To further close the gap, workforce reductions and more branch closings, along with the consolidation of mail sorting and processing centers, are also on the table.