WASHINGTON (AP) — Members of the Senate have voted 62-37 to pass S. 1789, a bill that calls for Congress to stabilize the ailing U.S. Postal Service by giving it a short-term cash infusion and changing some of the agency’s retirement and health benefits program funding rules.
The Postal Service, an independent government agency, says it wants to deal with declining volume and $12 billion in debt by closing up to 252 mail-processing centers, shutting down 3,700 post offices and eliminating about 100,000 jobs. Otherwise, the agency says, it will lose about $14 billion by the end of the year and could run out of the cash it needs to handle day-to-day operations as early as this fall. The agency says the cuts it is seeking would save $6.5 billion a year.
“The Postal Service is at a crossroads,” Postmaster General Patrick Donahoe said recently at a House hearing. “Our business model is broken. We have insufficient revenue to cover our costs… If the Postal Service were a private company, we would be engaged in Chapter 11 bankruptcy proceedings.”
Late last year, Donahoe agreed to delay the facility closings until May 15, to give Congress time to pass legislation to shore up the agency’s finances.
Now, postal employees are holding rallies to oppose the cuts, and campaign season is under way. Lawmakers appear to be leaning toward putting off making big decisions about facility closings and proposals for ending Saturday mail delivery by requiring further review of those proposals.
The bill being debated on the Senate floor this week was recently modified to take into account the concerns of mostly rural states. The bill would, for example, cut the number of mail processing centers the Postal Service would close to 125, from 252, and allow more U.S. areas to maintain overnight first-class mail delivery for at least 3 more years. Today there are about 500 mail processing centers.
The bill also would require the Postal Service to wait at least 2 years before it could reduce mail delivery to 5 days a week. The Obama administration has estimated cutting Saturday mail delivery could save between $2 billion and $3 billion a year.
In the meantime, the Postal Service would get a cash infusion of roughly $11 billion.
The cash infusion would come in the form of a refund of payments the agency has made to the federal retirement fund. The Postal Service says the retirement fund payments were bigger than they should have been.